Following on from the well-received interim results (29th September), Next Fifteen has provided a further Q3 trading update. The key headlines are that positive recent trading trends continue and, allied to strong cost control measures taken throughout the year, have resulted in profit expectations being raised for the current year. We have upgraded our estimates accordingly; marking the second material upgrade we have made since September. Initial concerns that the pandemic would materially disrupt client demand and spending patterns have proven largely overstated. The speed at which revenue has been recovered has been matched by impressive cost actions; not least around the fixed property overhead within the group, which has resulted in higher drop through rates than the group has experienced in the past. The key question looking forward is whether the legacy of the pandemic will be a lower fixed cost base for the group. Revenue mix effects are likely to continue to cloud the answer but our sense is that Next Fifteen has been successful in laying the foundations for structurally higher margins looking forward. Despite a strong recent run (+37% since late August), Next Fifteen still trades a material PE discount to its immediate peer group. Given the positive trading and margin momentum evidenced today, this looks harder to justify.