Few marketing and media relations agencies count Google, Amazon and Facebook among their clients; Next Fifteen Communications (NFC) added Intel and Airbnb to its impressive roster in the six months to end-July, as brisk demand for its data analytics, software and digital communications services fuelled a 31 per cent rise in operating profit to £7.2m.
Next Fifteen has been quick to embrace new ways of getting clients' messages across, including analysing data to hone campaigns and using new channels such as social media. These efforts underpinned organic sales growth of a tenth in the US as Outcast, Beyond and other agencies won work. The group also shelled out £2.4m to acquire three UK agencies and continued to streamline its non-US overseas operations. This process, which has involved pruning the client base, cut constant-currency revenue by 9 per cent in Europe, the Middle East and Africa, but helped more than double the operating margin in Asia Pacific to 13.2 per cent.
Management remains dedicated to digital innovation. Its Agent3 unit recently built a software platform that provides insights into customers for the sales and marketing departments of large companies. Next Fifteen plans to boost investment in product development and sales support here.
Broker Investec Securities expects pre-tax profit of £15.6m for the year to January 2016, giving EPS of 15.3p (FY 2015: £12.5m and 13.2p).
| NEXT FIFTEEN COMMUNICATIONS (NFC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 202p | MARKET VALUE: | £133m | |
| TOUCH: | 200-204p | 12-MONTH HIGH: | 204p | LOW: 118p |
| DIVIDEND YIELD: | 1.8%** | PE RATIO: | 7** | |
| NET ASSET VALUE: | 67p* | NET DEBT: | 21% | |
| Half-year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 52.2 | 5.4 | -9.1 | 1.0 |
| 2015 | 61.8 | 7.2 | 4.3 | 1.2 |
| % change | +18 | +33 | - | +20 |
Ex-div: 12 Nov Payment: 11 Dec *Includes intangible assets of £47.5m, or 72p a share **Pro forma for the year to 31 January | ||||
