23rd Apr 2020 17:28
(Alliance News) - Next Fifteen Communications Group PLC on Thursday reported higher earnings for financial 2020 on "solid performances" across most of its businesses, as it announced a halt to its final dividend payout.
Shares in the digital communications company closed 2.6% lower at 366.38 pence each on Thursday in London.
For the year ended January 31, Next Fifteen posted revenue of GBP300.7 million, up 10% from GBP272.4 million reported for financial 2019. Net revenue was GBP248.5 million, up from GBP224.1 million.
Pretax profit was 12% up at GBP40.2 million from GBP36.0 million.
The improved results was attributed to "solid performance" across its portfolio, particularly driven by its Twogether, ODD, M Booth and Activate agencies.
The company's brand marketing segment - which includes the Archetype, OutCast, M Booth, Blueshirt and Publitek agencies - contributed GBP135.0 million to net revenue. The data & analytics segment contributed GBP45.1 million to net revenue, while the creative technology segment - which includes the ODD, Elvis, Brandwidth, Beyond, Twogether agencies - contributed GBP68.4 million.
Reporting by region, US net revenues grew by 8.2% to GBP127.6 million and UK net revenue grew by 17% to GBP97.4 million. The EMEA region - aided by Spain and France - recorded net revenue growth of 1% to GBP8.8 million.
Operating profit margin dropped marginally to 16.4% from 16.5%.
Post period end, Next Fifteen noted that while the Covid-19 outbreak as not yet materially hurt its business, it expects a slowdown in activity from May as clients begin to reduce spend. It said it expects that two-thirds of its portfolio will be negatively affected, with revenue expected to reduce by between 5% to 25% dependent on sector and specialism.
It added that it has already implemented cash conservation measures such as reducing capital expenditure and short-term discretionary spend, taking advantage of government employee furlough and tax deferral schemes and cutting pay for its board and senior executives. It said it has also suspended its final dividend, adding that it intends to resume dividend payments once conditions improve.
Total dividend for the year was 2.5p, down sharply from 7.56p in 2019.
Positively, it noted that its Beyond digital design studio returned to profitability in February and March.
"The board is confident that Next 15 is well-positioned to withstand this unprecedented period and can continue to progress with its growth strategy. Whilst the group is actively working on how to best manage the current situation, it is also looking to the ‘post Covid’ era to ensure it can capitalise on the shifts an event of this nature is likely to create in the market, including appropriate acquisition opportunities, product development and operational improvements," said Chair Richard Eyre.
As at the end of January, Next Fifteen had cash of GBP28.6 million, a GBP40 million revolving credit facility with HSBC Holdings PLC, and a US facility of USD7 million.
By Ife Taiwo; [email protected]
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