LONDON (Alliance News) - Next Fifteen Communications Group PLC on Tuesday said pretax profit surged in its 2015 financial year on the back of better revenue, prompting it to hike its dividend more than 30%.
The digital communications company also said it has struck a deal to buy a majority stake in programmatic advertising technology company Encore Digital Media Ltd.
Next Fifteen said its pretax profit in the year to January 31 was GBP12.5 million, up from GBP8.3 million a year earlier, as revenue increased to GBP109.2 million from GBP98.7 million and the group's operating margin improved to 11.7% from 8.9%.
As a result of the profit growth, the group proposed a final dividend of 2.5 pence per share, bringing its total dividend for the year to 3.5p, up from 2.6p a year earlier.
Organic revenue growth for the year was 6.1%, driven by 11% growth in the US and a series of significant client wins over the year, including social networking site Twitter Inc and video-sharing network Vimeo. The US business was boosted by Next Fifteen's Outcast, M Booth, Text and Blueshirt agencies and by the acquisition of content advertising agency Story Worldwide.
Topline revenue growth in the UK was 27%, with better performances in its Bite and Lexis agencies and a boost from investments and acquisitions made in the year, including Agent3, Morar and Republic Publishing.
The group also has seen an improvement in its Asian and European, Middle East and African operations, it said, following the restructuring of both businesses.
In a separate statement on Tuesday, Next Fifteen said it has acquired a 75% stake in Encore Digital Media Ltd, a programmatic advertising technology company, for GBP687,000 in cash. Further payments will be due to Encore based on it meeting profit targets in 2017 and 2018. Next Fifteen will buy the remaining 25% of the company in 2020, with the consideration to be based on Encore's 2019 and 2020 profit.
"Next Fifteen continues to make good progress with strong revenue growth in the US and an improving margin performance from its operations in the rest of the world, notably the UK. The acquisition of Encore and investment in Animl, which we've announced today, are in line with the group?s strategy of investing in businesses that deliver great content, insight and the technology that enables these," said Chairman Richard Eyre.
"The group has got off to an encouraging start to its new financial year, with trading patterns of the last twelve months continuing," Eyre added.
Shares in Next Fifteen were up 2.5% to 177.38 pence on Tuesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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