Next 15 predicts 16 per cent pre-tax profit growth in H1 amid 'resilient' trading

Next 15 expects pre-tax profit to grow 16 per cent to "at least £20m" for the first half of its 2020 financial year, amid "resilient" trading in H1 despite a six per cent dip in organic revenue.

Next 15 chief executive officer Tim Dyson
Next 15 chief executive officer Tim Dyson

Its performance is "well ahead of management expectations" set in March this year, the company said. Overall revenue for the six months to 31 July is expected to be up 6.5 per cent to £126m.

In a trading update today ahead of its interim results announcement at the end of September, the listed marcomms group – which owns PR agencies Archetype, The Outcast Agency, The Brandwidth Group, M Booth, and Publitek – said its operating margin is expected to grow from 14.7 per cent last year to "above 16 per cent".

Next 15 said: "The strong performance was driven by our b2b technology focused agencies, such as Activate and Agent3, and more resilient trading than previously anticipated in our brand marketing and creative technology divisions.

"The overall organic decline in revenues for the period was approximately six per cent, though the decline was less severe in the US where organic revenues declined by just 2.5 per cent. Client budget declines were typically related to those industry sectors most affected by COVID-19, whereas sectors such as technology and the digital services we provide have seen increases over previously budgeted spend."

The company said it "remains cautiously optimistic about trading" as it enters H2, "in what is still a highly uncertain general economic environment".

"We currently expect results for the year to be materially ahead of current market expectations," it stated.

Next 15 said its net debt at 20 August is less than £1m after recent acquisition-related payments. It expects to update shareholders on resuming dividend payments at its interim results announcement.

In June, Next 15 said it anticipates "modest growth" in revenue and profit in H1 despite the impact of COVID-19, with "real recovery" likely in the "latter part of the fiscal year".

Next 15 had earlier reported a 1.4 per cent rise in revenue to £135m in its Brand Marketing division, which includes Archetype, OutCast, M Booth, Blueshirt and Publitek, in the year to 31 January 2020.

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