Next 15 Group Regulatory News (NFG)

30 Jan 2025 07:00

30 January 2025

Next 15 Group plc (“Next 15” or the “Group”)

Trading update

Next 15 delivers reshaped business, increases AI product focus to drive growth

Next 15 Group plc, the tech and data-driven growth consultancy, today provides an update on trading for the year ending 31 January 2025.

Profits are expected to be at the bottom of analyst expectations1. The Group has seen an encouraging uptick in new business wins in the latter half of the current financial year, the impact of which will come through in the new financial year. The balance sheet is healthy, and the Group anticipates its year-end net debt will be less than half of the Group’s adjusted EBITDA.

Tim Dyson, CEO of Next 15 said: “The Group is excited about the year ahead. We have undergone a lot of change in the last 12 months. We have made, and will continue to make, some important investments, most notably in AI. These will set us up well to deliver growth in the medium term. Our Group is evolving, with a series of steps underway to simplify and strengthen the business, while retaining the specialist model that sets us apart.”

Reshaped business

Over the last six months the Group has continued to review operations to focus on meeting customer needs while driving efficiency that can fund further investment. Restructuring across the Group will deliver net annualised savings of approximately £40m, of which £14m relates to employees previously engaged within Mach49. Of the residual £26m saving, approximately £9m will have been realised in the current financial year. As a result of this work, the Group expects to post exceptional redundancy costs of approximately £15m in its results for the year to 31 January 2025.

Investment in AI-driven product enhancements/customer experience

In the coming year, the Group will increase AI investment by £5m and will make investments in other areas that it believes will support its medium to long-term growth. In 2024 we launched the Marker Collective which brings together our tech-focused communications brands Archetype, Outcast and Nectar as a simplified platform business that shares common product and back-office capabilities. Marker recently launched its first AI-powered product, Delve, to the market and will introduce more new products in 2025. This year we also expect to launch our new B2B tech marketing business. This will be built on a set of next generation AI-powered tools and data. In addition, we continue to invest in a number of new initiatives in the Group’s retail media specialist, SMG, including the expansion of its US business and a range of products for mid and top tier retailers.

Outlook

The Group has maintained, what it believes is, an appropriately cautious outlook for the new financial year. The impact of macroeconomic factors on the Group, including a new administration in the United States, the prospects for UK and US interest rates and the potential impact of tariffs, remains uncertain. Therefore, while a number of our businesses such as M Booth, MHP, Brandwidth and SMG continue to deliver strong growth and margins, we expect the headwinds that impacted a number of our businesses to remain in the short term. The Group expects to make selective bolt-on acquisitions in the new fiscal year which would, if completed, be additive to current market expectations.

Spending by our consumer and retail clients remains strong and we also anticipate a recovery in Government-related work in our new financial year, driven by a new large contract win with the UK Department of Education, to be delivered over the next two and a half years. In retail media, SMG has renewed and extended its contracts with both Morrisons and Boots. SMG has also added its first significant US customer in WHSmith North America. Technology customer spend continues to be muted although there are signs of improvement within certain subsectors.

The Group also announced its CFO, Peter Harris has informed the Board of his intention to step down from the Board and that it has appointed Mark Astaire as a Non-Executive Director (see separate announcement).

For further information contact:

Next 15 Group plcTim Dyson, Chief Executive Officer+1 415 350 2801Peter Harris, Chief Financial Officer+44 (0) 20 7908 6444

Deutsche Numis (Nomad & Joint Broker)Mark Lander, Hugo Rubinstein+44 (0)20 7260 1000

Berenberg (Joint Broker)Ben Wright, Mark Whitmore+44 (0)20 3207 7800

MHP (Investor Relations)Simon Evans, Eleni Menikou, Veronica FarahNext15@mhpgroup.com +44 (0)7812 590 682

1 Analyst expectations are currently £107m to £112m for adjusted operating profit

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