Next 15 achieves best ever result on back of takeovers and new contract wins

Next 15 has posted record annual performance following a series of acquisitions and significant organic sales growth.

The technology-focused marketing consultancy revealed net turnover increased by slightly over £200million to £563.8million for the year ending January, its fastest pace of expansion in more than a decade.

Growth was primarily driven by the seven firms it acquired during the period, including its largest-ever takeover, Engine Group, whose clients range from AstraZeneca to Santander, Sky and the Department of Education.

Other major takeovers included market research agencies Motif, which has helped boost the firm’s presence in the UK financial services and healthcare markets, and US-based Infosurv. Both group were acquired under Next 15’s customer insights business Savanta.

It also tried to buy M&C Saatchi, putting forward a mixed cash and share offer valuing the advertising agency at £310million, £56million higher than a rival bid by AdvancedAdvT.

But while the Saatchi board initially supported the proposal, they changed their mind after Next 15’s share price fell heavily over the summer. Saatchi shareholders subsequently voted down the bid in October.

Revenue growth was further lifted by two large contract wins, one with Morrisons and the other a five-year ‘strategic alliance’ between its Mach49 subsidiary and an unnamed technology company.

Next 15 expects to earn more than $400million in fees during the life of the latter deal, which was agreed in February 2022.

The combination of acquisitions and contract gains helped the firm rebound to a £10.1million annual pre-tax profit, having made an £80.1million loss the prior year.

Following this result, the group has declared a 20 per cent hike in its dividend payments to 10.1p per share.

Next 15 said trading since February had been commensurate with forecasts, with solid performances observed across all four business segments despite the recent downturn in the technology sector.

Its chairman, Penny Ladkin-Brand, said: ‘The board will continue its disciplined approach when evaluating the group’s portfolio and remains confident in Next 15’s ability to continue its trajectory this year.

‘Against the backdrop of macroeconomic uncertainty, we believe our agile structure and entrepreneurial mindset will serve to deliver growth opportunities for our people, customers and shareholders alike.’

Next 15 Group shares were 3 per cent lower at £7.99 on Tuesday afternoon, although they have risen by about 92 per cent in the past three years.