Next Fifteen spends $6.6m on content advertising agency Story Worldwide

PR and marketing group Next Fifteen is accelerating its push into content marketing with its second acquisition, amid further revenue and profit growth.

Next Fifteen chief executive Tim Dyson: Leading push into content production
Next Fifteen chief executive Tim Dyson: Leading push into content production

Having agreed a deal in January worth up to £5m over time for UK and US-based Republic Publishing, Next Fifteen is spending another $6.6m (£4.1m) in cash on US-based Story Worldwide.

Seven-year-old Story Worldwide employs 100 staff in offices in Seattle and New York, serves clients including Unilever and Lexus, and is on course for revenues of $15m (£9.3m) this year.

The UK arm of Story was acquired by integrated agency Aesop last year, without any competing interest from Next Fifteen, according to Next Fifteen chief Tim Dyson. 

"Story is the first advertising agency we have bought," Dyson told PRWeek. "They describe themselves as a content advertising agency and their heritage is in advertising, whereas the team at Republic is home to a lot of journalists and writers."

"Story is built around the notion that every brand has an authentic story to tell and one of their most impressive case studies is their work for Beech-Nut, the number two baby food brand in the US."

The deal was announced alongside Next Fifteen's financial results up to 31 July 2014, as part of it changing its accounting year end date to 31 January.

Adjusted pre-tax profits for the six months to 31 July were up 69 per cent to £5.4m, though on a statutory pre-tax basis the group made a loss of £4.2m. This was partly due to £1.1m costs related to restructuring in the UK and EMEA and partly due to a £7m writedown in the goodwill value of its UK operations in order "to reflect a period of historic under-performance".

However, the group expressed confidence in its future performance, raising its dividend payout and stating that current trading is encouraging with a strong business pipeline. New business wins included GoPro, DropBox and BT.

Revenues grew in the UK and the US but fell in Asia-Pacific and the EMEA region.

In the US the group achieved revenue growth of nine per cent to £57.3m, although it anticipates an exceptional cost of $900,000 next year relating to moving its San Francisco businesses into a single office.

In Asia-Pacific, where Next Fifteen is merging its Text and Bite agencies and has closed its Japan office, revenues dropped by 10 per cent to £12.6m. Text and Bite are also being merged in continental Europe, where EMEA revenues dropped by nine per cent to £9.6m.

UK revenues rose by 15 per cent to £21.9m and delivered an operating profit of £1.5m.

Next Fifteen chairman Richard Eyre said: "The acquisition of Story Worldwide adds an exciting new business in line with the group's strategy of investment in content, insight and technology."

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