Next Fifteen posts 1% revenue growth

LONDON: Next Fifteen posted 1% organic revenue growth to $71 million in the six-month period that ended January 31, fueled by 5% growth in the US.

LONDON: Next Fifteen posted 1% organic revenue growth to $71 million in the six-month period that ended January 31, fueled by 5% growth in the US.

Next Fifteen won new business from clients including Virgin, Viacom, and Samsung in the period. It ended relationships with Yahoo and Nokia.

The holding company, which owns PR firms Bite, M Booth, Text100, and The OutCast Agency, said adjusted profit before tax increased 6% to $6.8 million, compared with $6.4 million in the same period of last year. Operating profit in the period was $3.8 million.

The holding company reported net debt of $7.9 million in the period, which it attributed to investment in a new insight and data business that will launch in the coming months, as well as acquisition-related payments of $3.8 million.

Earlier this month, Next Fifteen acquired an 80% stake in digital agency Connections Media for $1.85 million.

The pace of Next Fifteen's revenue growth has slowed since the same period of last year. It posted 4% organic revenue growth to $73.1 million during the six-month period ending January 31, 2012.

Next Fifteen also said it concluded its investigation into the financial fraud case at Bite's San Francisco office, which resulted in more than $916,000 in charges in the six months ending January 31, in addition to the charges the company reported in the previous financial year. Last November, the company said it wrote off $2.8 million in cash stolen from the business, and would write off $200,000 in its current fiscal year.

Bite “experienced a challenging last quarter causing the new management to make changes including a small number of redundancies,” the company said in a statement.

The company has also said it will launch a data and analytics agency led by Clive Armitage, who left his position as Bite CEO at the end of last year. Last November, Bite merged with UK-based digital marketing firm Bourne.

“The transition from traditional PR to digital communications continues at Next Fifteen,” chairman Richard Eyre said in a statement. “This has been achieved without affecting performance for the half-year, which is in line with management expectations.”

The company anticipates charges of more than $3 million over the next two years “to enhance the group's capacity to compete effectively for marketing and communications budgets in fundamentally changed media conditions,” he added.

This story was updated on April 23 with additional financial data and background information. 

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