LONDON: Next Fifteen Communications Group CEO Tim Dyson said the holding company plans to make several acquisitions this year in the social, digital, and analytics spaces.
According to a trading update released Tuesday, revenue from traditional PR services has continued to decline at Next Fifteen, which owns and operates Text 100, M Booth, The OutCast Agency, and Bite, among others. As a result, the London-based holding company will look to make new acquisitions this year that steer clear of traditional PR and media relations firms, while continuing to bolster social, digital, and analytics capabilities at its existing agencies, Dyson told PRWeek.
“We need to start to describe ourselves differently,” he said. “Clients are thinking less and less of PR as an isolated discipline…For us, it means we're going to add more online talent and capability. This will fundamentally change the products we sell, our pricing, and the contracts we sign with clients.”
This spring, Next Fifteen will launch a data and analytics agency led by Clive Armitage, who left his position as Bite CEO at the end of last year.
Next Fifteen also said in the trading update that it has concluded its investigation into the fraud case at Bite's San Francisco office. The probe will cost the holding company approximately $472,000 this year.
Bite CFO Hamish Macphail has left his role after more than 12 years at the agency, confirmed SVP of global marketing Steven Brewster. Macphail's departure was not connected to the fraud case, Brewster said.
As a result of the investigation, Next Fifteen has added procedures and resources to its finance team, which will cost about $393,000 annually starting in the second half of this fiscal year. Dyson said the changes include additional checks and balances in its payment process and internal auditing system.
“The worst thing that could happen to us has happened,” Dyson said, adding that the fraudster was a woman who worked at the company for more than a decade. “We now have to look at every way of protecting ourselves.”
Last October, Next Fifteen delayed its earnings report after it uncovered a “complex fraud” in its Bite North America subsidiary “by a long-standing member of the finance team in a trusted position.” Next Fifteen wrote off nearly $3 million in stolen assets due to the fraud.
Next Fifteen has filed a civil action against the woman, and the legal case is ongoing, Dyson said.
“We're incredibly confident of our legal standing on this topic. There are no doubts of this individual's guilt, and we have an amazing amount of evidence,” he said.
Next Fifteen reported 6% overall revenue growth to about $146.7 million, compared with the previous year, in the fiscal year ending July 31. Its overall operating profit dropped 17.4% to $10.6 million, while its overall profit fell 18.2% to $6.9 million during the period.
Next Fifteen will release interim financial results in April.
Note: Figures were converted from British pounds to American dollars using the XE currency exchange calculator.
This story was updated on January 29 with information about CFO Hamish Macphail leaving the agency.