Digital communications group Next Fifteen's (NFC) shares fell 14 per cent on the day these half-year figures appeared. That's because the transition to digital is to cost an extra £2m over the next two years, while last year's employee fraud in the US will now cost a further £600,000 - on top of the existing £1.8m hit. However, strip-out restructuring, acquisition and fraud-related costs and adjusted pre-tax profit grew 6 per cent year-on-year to £4.5m, while organic revenues nudged up 1 per cent.
Chairman Richard Eyre reckons that restructuring costs and some trading challenges are likely to hit the second-half's profits. That restructuring will see two reporting segments - Technology PR and Consumer PR - redefined as a single integrated communications unit. This business saw revenue fall 2 per cent during the period, although the specialist services operation - called specialist agencies - grew revenues 20 per cent. Growth through acquisition has continued, too, and Next Fifteen purchased Connections Media for $1.85m (£1.21m) in April. The group also won new business from Virgin, Viacom and Samsung - although it did lose Nokia and Yahoo as clients.
Housebroker Canaccord Genuity expects adjusted full-year pre-tax profit of £9.9m, giving adjusted EPS of 9.38p (2012: £9.6m/10.1p).
NEXT FIFTEEN COMMUNICATIONS (NFC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 98p | MARKET VALUE: | £59m | |
| TOUCH: | 96-99p | 12-MONTH HIGH: | 115p | LOW: 90p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 62p* | NET DEBT: | 13% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 45.3 | 2.67 | 2.82 | 0.57 |
| 2013 | 46.6 | 2.04 | 1.95 | 0.63 |
| % change | +3 | -24 | -31 | +11 |
Ex-div: 1 May Payment: 31 May *Includes intangible assets of £40.6m, or 68p per share | ||||
