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Next Fifteen Communications Group PLC: DEEP DIVE
Next Fifteen tipped for more progress and acquisitions in 2019
Speaking in April, Next's chief executive Tim Dyson said the company had "lots of scope" for acquisitions in the coming year
OVERVIEW: NFC The Big Picture
The company reported an adjusted pre-tax profit of £36mln for the year ended 31 January, 23% higher than the year before
23 digital marketing and communications brands under one roof
First listed in 2000 as Text 100 Group, before changing its name to OneMonday and then to Next Fifteen in 2002
M&S, Samsung and Nike and other big names are among its customers
Market value of £515mln
Next Fifteen Communications Group Plc (LON:NFC) is a digital marketing and communications group, and its brands – there are currently 23 of them – span everything from digital content to PR to market research.
The latest addition to the stable was Planning-Inc, which was bought at the turn of the year for an initial £6.3mln sum, which could rise to £15mln if the business hits its performance targets.
Planning-Inc is a predictive analytics and data marketing business and it has been hired by the likes of Marks & Spencer Group PLC (LON:MKS) to boost customer engagement.
To take M&S as an example, Planning-Inc used its tech to analyse thousands of data points to figure out what each customer who had signed up to its newsletter was likely to want to see.
It then took that information and used it to tailor its customers' email experience based on what is most likely to be right for them.
How is it faring?
Good, by all accounts. In its full year results for 2018 the company reported an adjusted pre-tax profit of £36mln for the year ended 31 January 2019, 23% higher than the year before, while net revenues were up 16% at £272.4mln.
Adjusted profit margins had also risen to 16.5% from 15.3% last year, while net debt was cut by over 50% to £5.2mln from £11.6mln.
As a result of the improved performance, Next Fifteen upped its final dividend to 5.4p per share from 4.5p, taking the total dividend 20% higher to 7.56p.
Looking to its current year, Next Fifteen said in an update in June that trading at the start of the year had been in line with its expectations, with the results from "significant" changes at its Archetype marketing agency expected to be felt in the second half.
The company added that its recent acquisitions were making a "strong contribution" to growth and it continued to have a good pipeline of purchases in both the US and the UK.
As a result, the group was confident in its prospects for the full year.
What the boss says
Speaking to Proactive in April, Next's chief executive Tim Dyson said the company had "lots of scope" for acquisitions in the coming year.
Dyson said the number of targets would be similar to the four recent 'reasonably sized' acquisitions, which included predictive analytics firm Planning-Inc in January.
He added that the company also had its eye on emerging digital trends and planned to move into Innovation Consulting having ended 2018 with a strong balance sheet.
What the broker says
Peel Hunt currently has Next Fifteen pegged with a 'buy' rating and a target price of 640p, a 5.8% premium to its close price on 25 June 2019.
For its 2020 financial year, Peel Hunt is forecasting that Next Fifteen will deliver an adjusted pre-tax profit of £43.5mln on sales of £251.1mln.
With shares trading around 628p as of 26 June 2019, Next Fifteen has a market cap of £515.4mln.
Calum Muirhead
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Next Fifteen Communications Group PLC Timeline
Next Fifteen higher as it forecasts "positive change" from Archetype agency in second half
Next Fifteen CEO sees "lots of scope" for acquisitions in new year as profits jump in 2018
Profits jump for innovative marketing group Next Fifteen
Next Fifteen trading in line
Next Fifteen Communications picks up predictive analytics firm Planning-Inc
Next Fifteen raises £20mln to fund latest acquisition
Next Fifteen hikes dividend as half year profits rise by a quarter
Next Fifteen bucks industry trend with "good growth stories across the board"
Next Fifteen snaps up digital marketing business TAG for up to £3.6mln
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Next Fifteen Communications Group PLC
Next 15 is a communications business which employs over 1,350 people across 32 offices in 14 countries. The Group incorporates 17 subsidiary agencies, spanning digital content, marketing, PR, consumer, technology, marketing software, market research, public...
Next 15 is a communications business which employs over 1,350 people across 32 offices in 14 countries. The Group incorporates 17 subsidiary agencies, spanning digital content, marketing, PR, consumer, technology, marketing software, market research, public affairs and policy communications.
Of the Group's businesses, five are independent communications brands, with three specialising in the technology sector (Bite, Text 100 and The OutCast Agency), and two in the consumer space (Lexis and M Booth). The Group also owns three agencies with a focus on digital (Beyond, bDA and Connections Media), a B2B marketing agency (Twogether), a programmatic advertising technology business (Encore), a market research company (Morar), a digital content marketing agency (Story), a policy communications firm (Vrge), a creative agency (ODD London), a B2B technical marketing communications agency (Publitek) and an investor relations consultancy (The Blueshirt Group). Lastly the Group has established its first marketing software business in agent3. All brands operate as autonomous businesses, allowing the Group to service competing clients.
Market: LSE
EPIC: NFC
Market Cap: £522.06 M
Latest Price: 612.880p (-0.182 % )
52-week H/L: 668.00p / 453.00p
Sector: Media & Publishing