Interim results

17/04/2007
Next Fifteen Communications Group plc ("Next Fifteen" or "the Group"), the international public relations consultancy group, today reports record profitability and revenues for its financial results for the six months to 31 January 2007.

Financial highlights:

• Revenues up 11% to £29.4 million (2006: £26.5 million)
• Adjusted profit before tax increased by 53% to £2.6 million (2006: £1.7 million)
• EBITDA up 41% to £3.6 million (2006: £2.5 million)
• Adjusted earnings per share rose by 47% to 3.36p (2006: 2.28p)
• Interim dividend increased 9.6% to 0.4p (2006: 0.365p)
• Adjusted operating profit margin before net central costs increased to 12.2% (2006: 10.9%) following a reduction in staff costs to 68.8% of revenue (2006: 70.2%)

Corporate progress:

• Strong overall performance by the Group's technology and non-technology businesses; growth of existing client revenue and significant new client wins including Boots, Cisco, Raytheon and Polycom
• Growing revenue contribution from the Group's new "Clean Technologies" practices which focus on "green" technology clients including those in the bio fuels sector
• Organic revenue growth in Asia up 11%; helped by launch of Vox PR and a new Text 100 office in Kuala Lumpur
• Stake in Lexis Public Relations increased to 76%, further strengthening the Group's presence beyond the technology sector. Remaining equity to be purchased over the next three years
• UK business has performed well with Lexis revenue consolidated, and 12% growth in Bite London following the successful integration of Credo
• OutCast, acquired in June 2005, continues to perform strongly with revenue growth of 22% in $ terms
• Post-period end, successful merger of August One and Text 100 businesses to strengthen Text 100's consumer and technology offering.

Commenting on the results, Will Whitehorn, Chairman of Next Fifteen, said: "Overall, the Group has generated strong results for the period and continues to make good progress. The Group is well placed to expand its business further due to its operations in high growth markets such as China and India and its operations in North America.

"Significant new client wins were achieved in both technology and non-technology sectors; these include Boots, Cisco, Raytheon and Polycom. Outcast, acquired in June 2005, performed exceptionally well, growing revenue by 22% in dollar terms. In addition, the Group has created practices in all three pf its US businesses (Outcast, Bite and Text 100) to service the rapidly expanding Clean Technology market in areas such as bio fuels.

"We remain optimistic about the growth potential of the PR market and, in particular, high growth markets such as India and China as well as more established markets such as the UK and US. Beyond the current financial year, the Board remains confident that the Group will continue to generate good organic growth given its sector focus and geographic reach. In addition, the Group is actively seeking selected acquisitions to expand its service offerings."

Chairman and Chief Executive's Statement

Next Fifteen is pleased to report once again record results for the six months to 31 January 2007. Revenues increased by 11% to £29.4m (2006: £26.5m) and earnings before interest, tax, depreciation and amortisation rose by 41% to £3.6m (2006: £2.5m). Adjusted profit before tax increased by 53% to £2.6m (2006: £1.7m). At the same time, adjusted earnings per share rose by 47% to 3.36p (2006: 2.28p). As a result of this strong performance, the Board has decided to increase the interim dividend by 9.6% to 0.4p (2006: 0.365p).

The Group's strategy remains focused on generating organic growth from its existing PR brands and supplementing this with targeted acquisitions that offer growth potential and complement the existing PR businesses.

Overall, the Group has generated strong results for the period and continues to make good progress. The Group is well placed to expand its business further due to its operations in high-growth markets such as China and India and its operations in North America. In India, we launched a new PR brand, Vox PR, as an alternative technology-focused business, with offices in Delhi, Mumbai and Bangalore. The growth from Vox PR and a new office for Text 100 in Malaysia helped grow APAC region revenues by 11%. Significant new client wins were achieved in both technology and non-technology sectors; these include Boots, Cisco, Raytheon and Polycom. OutCast, acquired in June 2005, performed exceptionally well, growing revenue by 22% in dollar terms.

In addition the Group has created practices in all three of its US businesses (Outcast, Bite and Text 100) to service the rapidly expanding Clean Technology market in areas such as bio fuels. Clients in this area include Novazone, Khosla Ventures, and PARC.

In November 2006, the Group acquired a further 25% of Lexis Public Relations, thereby increasing its holding to 76%. This adds to the UK revenue and profits and further strengthens the Group's presence beyond the technology sector. The remaining equity will be purchased over the next three years. The acquisitions of OutCast and Lexis have helped the Group reduce its reliance on key clients, with the top 10 clients now representing less than 40% of total revenue. The successful integration of Credo Communications into Bite London (acquired in December 2005) has helped the business grow by 12% in the first half of the year. Prospects

Shortly after the period-end, the Board decided to merge its August One business into Text 100 to strengthen Text 100's consumer technology and corporate PR services. This merger has gone smoothly and the expanded operations have already seen significant new business opportunities emerge as a result. The merger will result in some costs related to duplicated resources and office space in the second half. However, the Group remains fully confident of meeting its targets for the current financial year. Turnover growth has been held back again by an 8.2% weakening of the dollar over the first half of the year, and with 40% of the Group's revenue coming from the US this will also affect the second half. The impact on profit growth is significantly mitigated by matching dollar costs and some currency protection.

We remain optimistic about the growth potential of the PR market and, in particular, high-growth markets such as India and China as well as more established markets such as the UK and US. Beyond the current financial year, the Board remains confident that the Group will continue to generate good organic growth given its sector focus and geographic reach. In addition, the Group is actively seeking selected acquisitions to expand its service offerings.

Will Whitehorn
Chairman

Tim Dyson
Chief Executive Officer

Please click here to view entire release with Financial tables (Opens in a new browser window)

For further information:

Next Fifteen
Tim Dyson, Chief Executive
001 415 350 2801
David Dewhurst, Finance Director
07974 161 183

Merlin
020 7653 6620
Vanessa Maydon
07802 961 902
Anja Kharlamova
07887 788 4788