5th Nov 2013 11:55
LONDON (Alliance News) -Shares in Next Fifteen Communications Group PLC jumped 9.2% Tuesday after it raised its final dividend on increased revenues, despite pretax profits taking a hit from charges related to fraud in 2012.
The company's results were delayed after it announced last October that it had been the victim of fraud involving a senior member of the finance team at its Bite North American subsidiary.
Next Fifteen is a holding company that owns five subsidiaries that focus on public relations. Next Fifteen raised its final dividend to 1.925 pence from 1.735 pence in the previous year, raising the total dividend 11% to 2.55 pence from 2.30 pence.
In the full-year ended July 31 the company posted revenues in Next Fifteen increased to GBP96.1 million from GBP91.6 million. The company said that its subsidiaries Text 100, OutCast, M Booth and the Blueshirt Group had seen strong revenues, producing GBP96.1 million for the group between them. However, its Bite subsidiary had struggled throughout the year due to accounting issues in two of its offices resulting from fraud which had subsequently hampered the company's profits.
Pretax profit declined to GBP2.1 million from GBP6.0 million. The company saw a GBP1.8 million charge for the misappropriation of assets following the fraud last year, when a employee of the company embezzled funds which he then hid through fictitious assets and understated liabilities across two of the company's North American Bite subsidiaries. The overstated assets have since been written off and the liabilities re-instead, Next Fifteen said.
In the US revenues grew by 10%, offsetting 3% declines in the UK due to client losses at the end of the previous year.
"The challenges at Bite and the accounting issues that were unearthed in this year's audit have certainly impacted reported profits but they are not evidence of a flawed business model," the company said in a statement. "Mistakes were certainly made, especially where systems did not keep up with change but management has moved quickly to adapt and the business will emerge stronger as a result."
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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