-Profits beat expectations
-Group announces two bolt-on acquisitions
-Saatchi bid remains the key prize
Shares in specialist marketing firm Next Fifteen Communications (NFC:AIM) moved 0.3% higher to 1103p on Monday following the announcement of two encouraging updates.
First, the group has made two bolt-on acquisitions that are expected to enhance earnings in the current year. Second, management have provided a trading update which is ahead of current expectations.
ACQUISITION SPREE CONTINUES
The two bolt-on acquisitions are a continuation of the group’s strategy to build out a leading growth consultancy.
This follows on from (2 March 2022) the purchase of Engine UK, a broad based digital transformation and communication business.
The deal added significant scale to Next15’s growth consultancy, and increased capabilities to Next15’s UK communications to match its existing US offering and a strong portfolio of clients in the UK, including those in countercyclical sectors such as pharma and the public sector.
Today’s news relates to the Green Leads Holdings and IT Telemarketing Services acquisitions.
The former is an American based demand generation business and expands Next 15’s product suite of lead generation products.
The latter provides both digital marketing and telemarketing products to generate high quality first party data for customer sales activities.
The business generated £1.2 million of revenues for the year ended 28 February 2022.
TRADING REMAINS ROBUST.
For the three-month period to 30 April 2022, Next 15 Group’s total revenues rose by 68% year-on-year to £130 million. Organic revenues grew roughly 37%.
Adjusted profit before tax for the same three-month period to 30 April 2022 is also ahead of management expectations.
Performance has been strong across all four areas of the Next 15 Group, with each segment showing encouraging organic revenue growth of at least 15% to the end of April.
M&C SAATCHI THE KEY PRIZE
Next Fifteen recently outbid AdvancedAdvt the acquisition vehicle headed by serial software entrepreneur Vin Murria, for M&C Saatchi (SAA).
The rationale for the merger is to create a business with a broader scale and geographic scope.
M&C Saatchi has an established presence in in Asia and Australia, whereas Next15 is more focused on the UK and US markets.
The Next 15 bid values M&C Saatchi on a forward price-to- earnings ratio of 17.5 times.
