Next 15 earnings grow 21 per cent in 'year of change'

Next 15 has reported a 21 per cent rise in underlying earnings (EBITDA) to £41.7m ($54.35m) in the year to 31 January, in what it called a "period of significant progress and change".

Chairman Richard Eyre: 'There is more change to come'
Chairman Richard Eyre: 'There is more change to come'

Revenue rose 14 per cent to £224.1m ($292.1m) for the company, which last September announced the merger of PR agencies Text 100 and Bite into a new entity, since renamed Archetype.

Operating profit grew 23 per cent to £37m ($48.2m) and margin was 16.5 per cent, up from 15.3 per cent in the previous year. Figures are adjusted to take into account factors such as acquisition costs.

"The last 12 months have been a period of significant progress and change across the group," Next 15 said. Twogether, Savanta, M Booth and Publitek were "stand out performers", the firm added, "whilst we have achieved solid performances across most of our portfolio".

The Brand Marketing arm produced "resilient earnings" despite the restructuring in the division, which also saw the merger of the former Connections Media agency into OutCast and of newly-acquired B2B content marketing agency Technical into Publitek.

Revenue in the division was £158.3m ($206.3m), up 0.1 per cent on an organic basis. Adjusted operating profit increased by 7.7 per cent to £29.6m ($38.6m) at an improved operating margin of 22.2 per cent. Growth was led by M Booth and Publitek, Next 15 stated.

In the UK, net revenue increased 43.2 per cent to £83.5m ($108.8m). Next 15 said it was "partly due to the acquisitions made in the year, but also from the strong organic net revenue growth" – organic growth was 15.5 per cent in the UK, with "exceptionally strong performances" from Twogether and Savanta.

In the US, net revenues grew 1.7 per cent to £117.9m ($153.7m), with organic growth of 2.8 per cent including movements in exchange rates. Organic growth was impacted in the short-term by the merger of Text and Bite, the firm said. "Our US businesses have continued to perform steadily led by our M Booth and former Bite brands, with Activate our most recent acquisition performing very well."

Net revenue in EMEA increased 11.3 per cent to £8.7m ($11.3m), and in APAC it fell 5.2 per cent to £13.9m ($18.1m).

Next 15 chairman Richard Eyre said: "We are making great progress as the results demonstrate. Next 15 has evolved from a pure PR group into a data and technology-driven marketing group.

"There is more change to come as the industry continues to evolve and as our customers wrestle with the impact technology is having on their own business models. We are excited about our future as we believe we have the right foundational platform of businesses, products, talent and customers to tackle the next stage in our evolution; evolution that we see delivering further strong growth in the years ahead."

The company said it "continues to focus on building its data, analytics and technology capabilities and ensuring these are embedded throughout the group".

"The investments we are making to restructure our brand marketing segment, in particular the launch of Archetype, are progressing well and we expect to start to see the benefit of this action in the latter part of the financial year. Current trading is in line with management’s expectations and the group is confident of another significant increase in profitability."

Click here to read more about the launch of Archetype.

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