Albeit against weak comparatives, Next Fifteen has released a strongly positive Q2 trading update with headline revenue growth +40% in Q2, of which organic growth was +29%. We saw in Q1 that organic growth momentum had started to equalise across both the B2B and B2C components of the portfolio and this trend has been maintained through Q2 and is likely to continue through H2. Margins continue to be strong; benefiting both from prior period cost actions / property rationalisation and also positive revenue and mix momentum. The trend of earnings upgrades has been maintained and we are ticking up our estimates accordingly (+5% revenue / PBT). The company has flagged both the increasing strength of prior year comparatives and higher levels of investment back into the business. This re-affirms our view that although margins will continue to improve the majority of immediate gains have been secured. Next Fifteen shares have continued their strong run through the year with company now breaking through the £1bn market cap barrier. Unsurprisingly given the tone of trading commentary and the pace of earning upgrades, the forward PE multiple has expanded to 22.3x. Despite this upward re-rating (delivering +117% share price return YTD), Next Fifteens remains at a material discount to others in the peer group.
13 Sep 2021
Q2 trading update – 5% revenue / PBT upgrade
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Q2 trading update – 5% revenue / PBT upgrade
Next 15 Group plc (NFG:LON) | 918 -18.4 (-0.2%) | Mkt Cap: 912.0m
- Published:
13 Sep 2021 -
Author:
Iain Daly -
Pages:
7
Albeit against weak comparatives, Next Fifteen has released a strongly positive Q2 trading update with headline revenue growth +40% in Q2, of which organic growth was +29%. We saw in Q1 that organic growth momentum had started to equalise across both the B2B and B2C components of the portfolio and this trend has been maintained through Q2 and is likely to continue through H2. Margins continue to be strong; benefiting both from prior period cost actions / property rationalisation and also positive revenue and mix momentum. The trend of earnings upgrades has been maintained and we are ticking up our estimates accordingly (+5% revenue / PBT). The company has flagged both the increasing strength of prior year comparatives and higher levels of investment back into the business. This re-affirms our view that although margins will continue to improve the majority of immediate gains have been secured. Next Fifteen shares have continued their strong run through the year with company now breaking through the £1bn market cap barrier. Unsurprisingly given the tone of trading commentary and the pace of earning upgrades, the forward PE multiple has expanded to 22.3x. Despite this upward re-rating (delivering +117% share price return YTD), Next Fifteens remains at a material discount to others in the peer group.