LONDON: Holding company Next Fifteen delivered a 13% improvement in adjusted pre-tax profits to about $8.5 million for the six months ending January 31, despite a fall in revenue in the UK, Europe, and Asia.
Reported pre-tax profits climbed from about $3.4 million to $5.5 million for the group, which owns and operates Bite, Text100, Beyond, OutCast, M Booth, and 463 Communications.
During the period, it acquired 51% of a content marketing agency based in the UK and the US, Republic Publishing, which works for clients including Vodafone and Red Bull, for about $1.3 million. It can buy the remaining 49% over the next two to six years.
The holding company reported revenue of approximately $82.4 million after overall growth of 6% and organic growth of 4%.
North America was the brightest spot, with Bite’s return to profit in the US helping to push revenues up 17% to $47.5 million and adjusted operating profit up 37% to $11.5 million.
However, it struggled in the UK, where revenue dropped 4.5% to $16.2 million, although adjusted operating profit rose from $1.3 million to $2 million.
The holding company noted that this took place after material client losses at Lexis and Bite in the previous period. Last June, Bite lost its Microsoft b-to-b account to Edelman, and Lexis lost its William Hill consumer account to GolinHarris in August.
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% to $8 million, as well as Asia, where revenue was down 6% to $10.7 million. Next Fifteen is 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," he said in an earnings statement.
In a change to the financial reporting schedule recommended by new CFO Peter Harris, Next Fifteen’s year-end will move from July 31 to the end of January in the current financial year to better align with client budgets.
This story originally appeared on the website of PRWeek UK.
Note: All changes in currency from British pounds to American dollars were made using the XE Currency Converter.