Strip out a welter of restructuring and other one-off costs and Next Fifteen's 12-month performance looks encouraging. A significant shake-up since Peter Harris took the financial reins in March 2014 - including a change of year-end that confuses the figures in our table - yielded a 44 per cent year-on-year increase in adjusted operating profit to £12.7m, as the digital communications group improved margins and bagged big clients such as Twitter and Vimeo.
Progress in the US was boosted by the acquisition of Story Worldwide, while business elsewhere showed a marked improvement. In the UK, better contributions from Bite and Lexis and a string of acquisitions pushed sales up 27 per cent year on year, and the operating margin more than doubled to 10.6 per cent. Problems in Asia, Europe, the Middle East and Africa also eased during the year.
Given Next Fifteen's goal of building a portfolio of businesses catering to various market sectors and geographies, acquisitions remain a core focus. In fact, these results were accompanied by news that the group has acquired a 75 per cent stake in Encore, an advertising technology specialist, and management hint that further deals are likely.
Broker Canaccord Genuity upgraded its adjusted pre-tax profit forecast by 4 per cent to £15.3m for the current year, giving EPS of 14.7p (from 13.2p for the year to 31 Jan 2015).
| NEXT FIFTEEN COMMUNICATIONS (NFC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 176p | MARKET VALUE: | £115m | |
| TOUCH: | 175-177p | 12-MONTH HIGH: | 179p | LOW: 108p |
| DIVIDEND YIELD: | 2%** | PE RATIO: | na | |
| NET ASSET VALUE: | 58p* | NET DEBT: | 23% | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 72.3 | 5.30 | 6.80 | 1.85 |
| 2011 | 86.0 | 7.53 | 9.10 | 2.05 |
| 2012 | 91.6 | 5.96 | 6.85 | 2.30 |
| 2013 | 96.1 | 2.09 | 0.56 | 2.55 |
| 18 months to 31 Jan | (£m) | (£m) | (p) | (p) |
| 2015 | 158.5 | 0.41 | -0.18 | 5.50 |
| % change | - | - | - | - |
Ex-div: 9 Jul Payment: 7 Aug *Includes intangible assets of £45m, or 69p a share **Based on 3.5p of dividends for year to 31 Jan | ||||
