Next Fifteen's first half profits climb 13 per cent despite UK revenue slide

Bite owner Next Fifteen delivered a 13 per cent improvement in adjusted pre-tax profits to £5.1m for the six months to 31 January despite a fall in revenues in the UK, Europe and Asia.

Tim Dyson: Next Fifteen chief executive
Tim Dyson: Next Fifteen chief executive

Reported pre-tax profits climbed from £2.04m to £3.27m at the group, which also owns Lexis, Text 100, Beyond, Connections Media, OutCast, M Booth and the Blueshirt Group.

During the period it acquired 51 per cent of a content marketing agency based in the UK and the US, Republic Publishing, which works for clients including Vodafone and Red Bull, for £735,000. It has the possibility to acquire the remaining 49 per cent over the next two to six years.

The group notched up revenues of £49.3m, after overall growth of 6 per cent and organic growth of 4 per cent.

North America was the brightest spot, with Bite’s return to profit in the US helping to push revenues up 17 per cent to £28.4m and adjusted operating profits up 37 per cent to £6.9m.

However, it struggled in the UK, where revenues dropped 4.5 per cent from £10.2m to £9.7m, although adjusted operating profit rose from £775,000 to £1.2m.

The company said this came after material client losses at Lexis and Bite in the previous period. In June last year Bite lost its Microsoft b2b account to Edelman and in August Lexis lost its William Hill consumer account to GolinHarris.

Next Fifteen said it was expecting a "much greater contribution for the UK businesses in the second half" thanks to improved trading prospects and the acquisition of Republic Publishing.

There were also revenue declines in Europe, down 10 per cent to £4.8m, and Asia, down 6 per cent to £6.4m. Next Fifteen is now actively reviewing how to improve its trading performance in Europe.

Next Fifteen chairman Richard Eyre said the results demonstrated significant progress on a number of fronts in the past six months.

"The strong trading pattern experienced in the second half of our last fiscal year has continued, putting the group in position to deliver another year of progress in revenue and profitability."

In a change to the financial reporting schedule recommended by new CFO Peter Harris, Next Fifteen’s year-end will move from 31 July to 31 January in the current financial year, to better align with client budgets.

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