Over the six months to July, Next Fifteen Communications’ (NFC) organic revenues dipped by 1.3 per cent – dampened by the previously announced restructuring of the ‘Archetype’ brand within its largest brand marketing business. Here, overall revenues edged up by 0.6 per cent to £63.9m, but organic sales contracted by 4.9 per cent. Adjusted operating profits for the division rose by around 5 per cent to £13.1m.
Elsewhere, the data and analytics wing saw a better performance, with net revenues up by 114 per cent to £20.9m, and organic revenue growth of over a fifth. But it was rather a different story within the creative technology business, where the ‘Beyond’ brand suffered a material reduction in sales and profits due to lower spend from customers Samsung and Just Eat.
Next Fifteen’s statutory figures reflected the impact of restructuring and acquisition costs. With a 15 per cent rise in operating expenses, and higher finance charges, pre-tax profits took a considerable whack. Still, the group said that recently purchased businesses have performed well. And the acquisition of New York-based agency Health Unlimited – announced to coincide with these half-year numbers – should be earnings-enhancing this year. As a result, management expects full-year guidance – and to return to high single-digit organic growth in FY2020.
House broker Numis expects adjusted EPS of 37.7p for July 2020, up from 33.1p in FY2019.
| NEXT FIFTEEN COMMUNICATIONS (NFC) | ||||
| ORD PRICE: | 433p | MARKET VALUE: | £369m | |
| TOUCH: | 440-459p | 12-MONTH HIGH: | 668p | LOW: 433p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 46 | |
| NET ASSET VALUE: | 131p* | NET DEBT**: | 3.2% | |
| Half-year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 107 | 10.3 | 10.0 | 2.16 |
| 2019 | 119 | 2.8 | 1.9 | 2.50 |
| % change | +11 | -72 | -81 | +16 |
| Ex-div: | 24 Oct | |||
| Payment: | 22 Nov | |||
*Includes intangible assets of £132m, or 155p a share **Net debt excludes lease liabilities of £55.2m | ||||
