Next Fifteen grows in US, gets profitable in UK and Asia as loss turns to profit

Next Fifteen reported profit before tax of £4.2m ($6.4m) in the six months to 31 July, the same figure that it had lost in the same period in 2014, as the PR and marketing group added major clients including Airbnb, Autodesk and Intel.

Growth: Tim Dyson, CEO of Next Fifteen which has turned loss into profit
Growth: Tim Dyson, CEO of Next Fifteen which has turned loss into profit

London-listed Next 15, the majority of whose business is PR including Bite, Lexis and The Blueshirt Group, registered revenue of £61.8m ($94.2m) in the period, up from £52.2m.

This growth was drive by the US, where revenues grew to £39.9m from £28.9m. While much of this is accounted for by the purchase of content marketing firm Story Worldwide in late 2014, the firm also claimed growth of 10.3 per cent in the US once that is factored out.

US operating profit was £8.4m compared with £6.7m in the comparable six months period. The results say: "Operating margins have remained consistently strong at above 20 per cent but were diluted by the acquisition of Story Worldwide which broke even during the six-month period."

In the UK, total revenues grew five per cent and operating profit nearly doubled, to reach £1.5m, while operating margins improved from 6.2 per cent to 11.5 per cent. "This was the result of improved performances from both Bite and Lexis and the success of recent investments and acquisitions, including Agent3, Morar, Incredibull and Encore," the results say.

Margins also grew in Asia, from six per cent to 13.2 per cent, leading to operating profit more than doubling to £800,000, which is put down to a "simplification of the business" that had "delivered ahead of expectations".

Major contract wins in the period included consumer PR firm M Booth picking up Intel and software firm Autodes, tech PR firm Bite picking up cyber security firm Canary and train tickets website Trainline, while global comms firm Text 100 won Airbnb and US-based comms agency OutCast won homewear retailer West Elm.

The firm reiterated the message from its full-year financials announced in July that it has "made a good start to the financial year ending 31 January 2016", going on to say: "Current trading is encouraging with good activity levels across the group and the benefit of recent acquisitions coming through. Despite increased investment, the group is on track to meet expectations for the full year."

The firm continues to hold net debt of just less than £9m following a share sale at the start of the year.

Richard Eyre, chairman of Next 15, said: "These results have been driven by continued, strong, organic revenue growth in our North American business of 10.3 per cent. However, we have also seen doubled profitability in Asia Pacific and the UK.

"In Asia Pacific this has been achieved by the moves to simplify the business. In the UK it follows a series of strategic acquisitions as well as margin gains within our existing agencies. Looking forward the group is well placed to meet its expectations and as such the board has increased the interim dividend by 20 per cent to 1.2p per share."

In July, the firm acquired London-based IncrediBull, which will be merged into Text100 next year.

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