Next Fifteen Communications (NFC) has become known for its acquisitive growth strategy, and this first-half period was no different. Group revenue rose 16 per cent, although excluding contributions from companies it acquired during the period, such as business-to-business agencies Velocity and Circle, and sales only improved 2 per cent. Management said organic growth was held back by geopolitical uncertainty, while several large projects in the previous year made it difficult to draw fair comparisons.
Since the period-end, Next Fifteen has bought digital agency Elvis and financial market researcher Charterhouse Research. The latter – announced on results day – was purchased as part of the company’s strategy to improve its offering to financial services clients.
US revenues rose by 13 per cent to £57m, although the costs of taking some UK brands across the pond caused margins in this division to slip. Management hopes operating margins there will recover by the year-end, while on home soil three high-margin acquisitions, combined with operational improvements, helped push sales up by nearly a third to £25.5m.
Analysts at Investec expect pre-tax profits of £29.6m in the year to January 2018, giving EPS of 27.2p, up from £24.2m and 23.4p in FY2017.
| NEXT FIFTEEN COMMUNICATIONS (NFC) | ||||
| ORD PRICE: | 420p | MARKET VALUE: | £311m | |
| TOUCH: | 420-431p | 12-MONTH HIGH: | 458p | LOW: 300p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 131 | |
| NET ASSET VALUE: | 97p* | NET DEBT: | 29% | |
| Half-year to 31 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 80.5 | 4.2 | 3.7 | 1.5 |
| 2017 | 93.5 | 5.2 | 5.3 | 1.8 |
| % change | +16 | +26 | +43 | +20 |
| Ex-div: | 26 Oct | |||
| Payment: | 24 Nov | |||
| *Includes £92m of intangible assets, or 124p a share | ||||
