Next Fifteen’s FY20 final results did not contain any material surprises, following the detailed trading update in March. Headline revenue growth was 11% and adjusted PBT grew 10%. Beneath the surface; we saw a small decline in organic revenue growth (well flagged) more than offset by positive contributions from recent acquisitions. Critically, Next Fifteen exited FY20 with a strong balance sheet (net debt less than 0.2x EBITDA) and significant financial headroom (we estimate c.£35m). Next Fifteen did not shy away from the severity of the current crisis, even as far as to give an indication of the potential organic revenue impacts (-5%.to -25%) for the two thirds of the group most likely to be exposed. The key point here being that at least one third of the group will be largely unaffected and the effects elsewhere will vary considerably by agency specialisation and client industry exposure. After factoring acquisition contributions and cost reduction measures, we believe this will translate into a flat revenue performance in FY21 and a 5% decline in YoY adj. PBT. All things considered, this feels like a solid outcome from a business differentiated by the quality and positioning of its client base.
04 May 2020
FY20 final results – The calm before the storm
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FY20 final results – The calm before the storm
Next 15 Group plc (NFG:LON) | 925 0 0.0% | Mkt Cap: 918.5m
- Published:
04 May 2020 -
Author:
Iain Daly -
Pages:
9
Next Fifteen’s FY20 final results did not contain any material surprises, following the detailed trading update in March. Headline revenue growth was 11% and adjusted PBT grew 10%. Beneath the surface; we saw a small decline in organic revenue growth (well flagged) more than offset by positive contributions from recent acquisitions. Critically, Next Fifteen exited FY20 with a strong balance sheet (net debt less than 0.2x EBITDA) and significant financial headroom (we estimate c.£35m). Next Fifteen did not shy away from the severity of the current crisis, even as far as to give an indication of the potential organic revenue impacts (-5%.to -25%) for the two thirds of the group most likely to be exposed. The key point here being that at least one third of the group will be largely unaffected and the effects elsewhere will vary considerably by agency specialisation and client industry exposure. After factoring acquisition contributions and cost reduction measures, we believe this will translate into a flat revenue performance in FY21 and a 5% decline in YoY adj. PBT. All things considered, this feels like a solid outcome from a business differentiated by the quality and positioning of its client base.