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Half-year Report

LONDON, September 26, 2022--(BUSINESS WIRE)--

Next Fifteen Communications Group plc

("Next 15" or the "Group")

Interim results for the six months ended 31 July 2022

Record performance driven by double-digit organic revenue growth across all four business segments

Confident outlook and strong current trading; full year performance to be at least in line with management expectations

Next Fifteen Communications Group plc (AIM:NFC), the tech and data-driven growth consultancy, today announces its interim results for the six months ended 31 July 2022.

Financial results for the six months to 31 July 2022 (unaudited)

Six months ended
31 July 2022

£m

Six months ended
31 July 2021

£m

Year on year change
%

Adjusted results1

Net revenue

274.0

165.9

65%

Operating profit after interest on financial lease liabilities

61.3

35.0

75%

Operating profit margin

22.4%

21.1%

Adjusted profit before tax

60.7

35.0

73%

Adjusted diluted earnings per share (p)

44.1p

26.3p

68%

Interim dividend per share (p)

4.5p

3.6p

25%

Statutory results

Revenue

341.2

208.8

63%

Operating profit

33.6

14.9

126%

(Loss)/profit before tax2

(8.5)

3.1

(374%)

Diluted loss per share (p)

(10.6)p

(3.1)p

(242)%

1Adjusted results have been presented to provide additional information that may be useful to shareholders to understand the performance of the Group by facilitating comparability both year on year and with industry peers. Adjusted results are reconciled to statutory results within notes 2 and 3.

2The statutory loss before tax is principally due to acquisition related accounting, the majority of which relates to the increased earnout payable over the next five years to Mach49 equity holders.

Financial and Operational Highlights

  • Group net revenue growth of 65% to £274.0m (2021: £165.9m)

  • Organic net revenue growth of 31%

  • Adjusted profit before tax up 73% to £60.7m (2021: £35.0m)

  • Adjusted diluted earnings per share increased by 68% to 44.1p (2021: 26.3p)

  • Interim dividend up 25% to 4.5p per share (H1 2021: 3.6p)

  • Significant new client assignments including Morrisons, VMware and Verizon

  • Acquisition of Engine Acquisition Limited ("Engine") in March 2022, which has been successfully integrated into the Group

  • In May 2022 we launched a recommended offer for M&C Saatchi plc ("M&C Saatchi"), which valued the business at approximately £306m

Current trading and outlook

The Group’s strong trading in our first half has continued into the third quarter of our financial year. Whilst we are mindful of the current macro-economic and political backdrop, we remain confident about our outlook.

53% of the Group’s revenues are from the US market, with a further 7% of revenues coming from clients that bill in US dollars. The relative strength of our US businesses provides the Board with a high level of confidence in the trading performance for the rest of the year and beyond and we are confident of delivering adjusted profit before tax for the year at least in line with management expectations as revised upwards following our AGM statement in June.

The significant Mach49 contract win in early 2022 and recently announced new client wins, such as Morrisons for Shopper Media Group ("SMG"), gives us confidence for further growth in the next financial year.

The Group’s strong balance sheet provides scope for further investments both in the businesses and in M&A to accelerate our longer-term growth.

Offer for M&C Saatchi

We announced in May 2022 our offer to acquire M&C Saatchi. We believe it is a compelling opportunity to bring together two highly complementary organisations to enhance the value of both businesses. We remain confident the transaction will be immediately and materially earnings enhancing with the potential to unlock significant synergies. We expect a final a resolution to this process in the fourth quarter of the calendar year.

Commenting on the results, Chairman of Next 15, Penny Ladkin-Brand said:

"Our first half results have seen exceptionally strong trading with adjusted operating profit up 75% year on year and organic revenue growth of 31%. The acquisition of Engine and the significant contract win at Mach49 have been key to delivering this outstanding performance. We look with confidence to the rest of the financial year as the increasing mix of digital services continues to provide operating leverage and opportunities to reinvest in talent and product development to continue to drive longer term growth."

Tim Dyson, CEO of Next 15, said:

"This has been a fantastic first half performance with all four pillars of our business having shown double digit organic revenue growth. Our US operations have shown exceptional growth with the region now representing 53% of our total net revenues. We have also benefitted from the positive contribution from recent acquisitions including Engine which has been successfully integrated into our Group.

Acquisitions have always been a core component of our growth strategy. In May we announced our offer for M&C Saatchi where we saw a very strong rationale for combining two highly complementary businesses and creating significant value for both sets of shareholders. This opportunity is just as compelling today as it was in May, with our positive engagement across the wider M&C Saatchi leadership team only increasing our confidence in the prospects for the combined group.

Looking ahead, our strong performance has continued into the third quarter with high levels of activity across all parts of the business. We expect our results for the full year to be at least in line with management expectations as revised following our AGM statement."

Webcast for analysts and investors

Next15 will host an analyst and investor webcast at 8:30 today, Monday 26 September 2022.
To access the webinar, please contact next15@mhpc.com

For further information contact:

Next Fifteen Communications Group plc
Tim Dyson, Chief Executive Officer
+1 415 350 2801
Peter Harris, Chief Financial Officer
+44 (0) 20 7908 6444

Numis (Nomad & Joint Broker)
Mark Lander, Hugo Rubinstein
+44 (0)20 7260 1000

Berenberg (Joint Broker)
Ben Wright, Mark Whitmore, Dan Gee-Summons
+44 (0)20 3207 7800

MHP
Peter Hewer, Eleni Menikou, Pete Lambie, Rob Collett-Creedy
Next15@mhpc.com

Notes:

Net revenue
Net revenue is calculated as revenue less direct costs as shown on the Consolidated Income Statement.

Organic net revenue growth
Organic net revenue growth is defined as the net revenue growth at constant currency excluding the impact of acquisitions and disposals in the last 12 months.

Adjusted operating profit margin
Adjusted operating profit margin is calculated based on the operating profit after interest on finance lease liabilities as a percentage of net revenue.

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation.

About Next Fifteen

Next Fifteen (AIM:NFC) is an AIM-listed tech and data-driven growth consultancy with operations in Europe, North America and across Asia Pacific. The Group has a strong track record of creating and acquiring high-performance businesses. For acquired businesses it offers an opportunity to take advantage of the Group’s global operational infrastructure and centralized resources to accelerate their growth. The Group has long-term customer relationships with many of the world’s leading companies including Google, Amazon, Facebook, Microsoft, IBM, American Express and Procter & Gamble.

The business operates across four segments, each of which describes how we help customers grow in different ways: Customer Insight helps them understand their opportunities and challenges; Customer Engagement optimises their reputation and digital assets; Customer Delivery helps them connect with customers to drive sales; and Business Transformation helps maximize long-term value through corporate positioning, business design and the development of new ventures.

At Next Fifteen, success is underpinned by a people-led approach. Our purpose is to make our customers and our people the best versions of themselves, and our culture is empowering and respectful. We are seeking B Corp status as externally audited recognition of our commitment to our people and the planet alongside performance.

Our goal is to deliver above-market growth. Our revenues have grown by 193% over the last five years and we are aiming to double the size of the business in the next five years. This will be driven by the quality of the businesses, the strength of our customer relationships, the support our model gives them, and strong tech, data and digital tailwinds.

Chairman and Chief Executive’s Statement

Next 15, the growth consultancy, is pleased to report its interim results for the six months ended 31 July 2022.

During the period the Group’s net revenues increased by 65% to £274.0m (2021: £165.9m), benefiting from the acquisition of Engine in the period, while adjusted profit before tax increased by 73% to £60.7m (2021: £35.0m). On an organic basis net revenues grew by 31% year on year. The performance has been strong across all four areas of the Group with all delivering double digit organic net revenue growth. Business Transformation was our fastest growing segment following the recently announced very significant contract win from Mach49. Delivery also showed exceptional organic growth as our clients continued to increase spend on more measurable products and services. Our Customer Insight and Customer Engagement segments also produced encouraging performances. A fuller financial analysis by segment is provided on the following page.

Net revenue bridge (£m)

Net Revenue

£’m

Movement

6 months to 31 July 2021

165.9

Organic growth

51.4

31.0%

Acquisitions

44.2

26.6%

Impact of FX

12.5

7.5%

6 months to 31 July 2022

274.0

The excellent revenue performance aided by the favourable revenue mix towards more higher margin services such as Business Transformation, and improved operational gearing resulted in the Group’s adjusted operating margin increasing to 22.4% (2021: 21.1%). Our minority interest decreased to £0.6m (2021: £2.0m) mainly due to BCA, driven by the small number of tech IPOs in the period versus the high level of activity last year.

The Group margin in the first half benefitted from the onboarding of the major contract win for Mach49, which has had lower levels of costs associated with it. The Group margin is expected to reduce in the second half as Mach49 invests up to $10m of additional costs in preparation for the $30m increase in committed income from the contract in the year to January 2024.

Our tax rate on adjusted profit increased to 23.3% (2021: 22.1%) due to the increased proportion of our profit coming from our US operations. Despite this, our adjusted diluted EPS increased by 68% to 44.1p (2021: 26.3p) driven by the strong performance at an adjusted operating profit level. Our net debt excluding lease liabilities as at 31 July 2022 was £18.1m. This is after the recent acquisition of Engine, in addition to other earn out and tax related payments, leaving the Group well placed to make further investments and acquisitions. We continue to be highly cash generative, and our net debt has reduced to £3m as at 22 September 2022.

An interim dividend of 4.5p will be paid to shareholders on 25 November 2022. This represents a 25% increase on the interim dividend paid last year.

The Group reported a statutory operating profit of £33.6m compared with a profit of £14.9m in the prior period, while reported diluted loss per share was 10.6p compared with a loss per share of 3.1p in the prior period, primarily reflecting an increase in earn out related liabilities.

We completed the acquisition of Engine in March 2022, funded by a £50m placing. The integration continues to progress as planned and we are in the process of closing our Bermondsey based offices and moving all of Next 15’s London based staff to Engine’s offices at 60 Great Portland Street.

In May 2022 we launched a recommended offer for M&C Saatchi, which valued the business at approximately £306m. Due to the subsequent fall in Next 15’s share price, the Board of M&C Saatchi has withdrawn its recommendation of our offer, whilst still recognising the strong strategic and operational logic behind our proposal. We expect a final resolution to this process in the fourth quarter of the calendar year.

Segment adjusted performance

Customer
Engage
£’000

Customer
Delivery
£’000

Customer
Insight
£’000

Business
Transformation
£’000

Head
Office
£’000

Total
£’000

6 months ended 31 July 2022

Net revenue

133,255

48,806

24,706

67,226

-

273,993

Adjusted operating profit / (loss) after interest on finance lease liabilities

26,726

15,756

5,270

26,494

(12,978)

61,268

Adjusted operating profit margin 2

20.1%

32.3%

21.3%

39.4%

-

22.4%

Organic net revenue growth 1

12.6%

16.9%

15.6%

157.0%

-

31.0%

6 months ended 31 July 2021

Net revenue

91,170

36,295

18,760

19,724

-

165,949

Adjusted operating profit / (loss) after interest on finance lease liabilities

20,363

13,168

3,329

4,621

(6,476)

35,005

Adjusted operating profit margin 2

22.3%

36.3%

17.7%

23.4%

-

21.1%

Organic net revenue growth 1

14.6%

48.8%

22.3%

47.4%

-

23.1%

1Organic net revenue growth is defined as the net revenue growth at constant currency excluding the impact of acquisitions and disposals in the last 12 months.

2Adjusted operating profit margin is calculated based on the adjusted operating profit after interest on finance lease liabilities as a percentage of net revenue.

Our customer engagement businesses are designed to help our customers optimize their brand reputation and build mission-critical digital assets such as apps and websites that are the window through which much of the world’s commerce is now transacted. The segment benefited from the additions of MHP and Engine Creative in the period. Revenue grew in total by 46.2% to £133.3m, with operating profit of £26.7m, an increase of 31.2%, delivered at an operating margin of 20.1%. We have had very positive performances from most of our businesses with Mbooth, Mbooth Health and Brandwidth performing strongly on the back of good organic growth from their customer bases. Archetype, ODD, Elvis and Beyond’s profitability have each risen in the period due to resilient revenue performances and efficiency savings.

Customer delivery businesses are deeply specialised using creativity, data, and analytics to create connections with customers that drive sales and other forms of interaction. A link in the chain that is increasingly digital. Businesses wish to anticipate what their customers want and when they will want it. It is perhaps not surprising that this is a high growth area for our Group. Revenue grew by 34.5% to £48.8m, with operating profit up by 19.7% to £15.8m at an impressive operating margin of 32.3%. Activate has continued to excel as its technology led client base has continued to see the benefit of using Activate’s ROI driven lead generation services. Shopper Media Group, the commerce marketing activation business, traded well in the period and announced a major contract win with Morrisons, which will take effect from November 2022.

Our customer insight businesses are set up to help customers understand the opportunities and challenges they face and arm them with the data and insights they need to make the best decisions. Revenue grew by 31.7% to £24.7m, with operating profit of £5.3m delivered at an improved operating margin of 21.3%. Savanta showed a strong improvement over the prior period with organic growth of almost 20%, with a particularly strong performance from its US business. After the period, Savanta acquired Motive, a UK based financial services specialist agency, which will strengthen the performance in our second half.

Business transformation supports customers with either redesigning their business model or creating entirely new ventures. Through this segment we help our clients to understand how to maximise the value of the organisation. Revenue grew by 240.8% to £67.2m, with operating profit of £26.5m at an operating margin of 39.4%. Mach49, which announced a very significant contract win in March 2022, has performed exceptionally well as its clients have embraced its corporate venture building expertise and the business has evolved into a more retainer-based business.

Acquisitions

Engine – integration progressing in line with expectations

We completed the acquisition of Engine in March 2022, funded by a £50m placing. The integration has gone well and we are in the process of closing our Bermondsey based offices and moving all of Next 15’s London based staff to Engine’s offices at 60 Great Portland Street.

Proposed acquisition of M&C Saatchi - a compelling opportunity to further accelerate our growth

In May 2022 we launched a recommended offer for M&C Saatchi, which valued the business at approximately £306m. Due to the subsequent fall in Next 15’s share price, the Board of M&C Saatchi has withdrawn its recommendation of our offer, whilst still publicly recognising its strong strategic and operational logic. We expect a final resolution to this process in the fourth quarter of the calendar year.

The Board remains firmly of the belief that the proposed acquisition of M&C Saatchi is an exciting opportunity to bring together two highly complementary businesses, creating a truly global and diversified group with exceptional capabilities, clients and talent. We are confident that by combining these two businesses we can accelerate the ambitions of both, creating significant value for our clients, our people and all shareholders in the Enlarged Group.

The proposed transaction is expected to be immediately and materially earnings enhancing, creating an enlarged group characterised by attractive margins and a highly cash generative financial profile, whilst maintaining a strong balance sheet.

Reconciliation between statutory and adjusted profit

Six months ended
31 July 2022
(Unaudited)

Six months ended
31 July 2021
(Unaudited)

£’000

£’000

(Loss) / profit before income tax

(8,515)

3,135

Unwinding of discount on deferred and contingent consideration
and share purchase obligation payable

11,713

3,343

Change in estimate of future contingent consideration
and share purchase obligation payable

29,046

7,885

One-off charge for employee incentive schemes

396

5,803

Employment linked acquisition payments

6,745

5,794

Restructuring costs

3,086

-

Deal costs

2,737

242

Property impairment/(write back)

3,880

(990)

Amortisation of acquired intangibles

11,566

8,440

UK furlough grant

-

1,396

Adjusted profit before income tax

60,654

35,048

Adjusted financial measures are presented to provide additional information that may be useful to shareholders through facilitating comparability with industry peers and to best represent the underlying performance of the business. Adjusted results are explained and reconciled to statutory results within note 2 and 3.

We had a net charge of £29.0m in relation to our estimate of future contingent consideration. This is partly due to the strength of the US $ and a revaluation of US denominated liabilities but is also principally due to a reassessment of management’s estimate of future amounts payable due to the strong performance in H1 and momentum of certain brands; particularly Mach49.

As a Group, we have moved towards the inclusion of employment conditions for certain acquisition-related payments. As a result, we are required to build up a provision relating to these payments over time and therefore this has led to an accounting charge of £6.7m (2021: £5.8). We also incurred a one-off £0.4m charge related to new incentive scheme for Elvis. We acquired Engine in March 2022 and have integrated their previous head office function with Next 15’s at an annualised saving of £3.3m. We have also merged ODD and Engine Creative rebranding the combined business as House 337 as well as relaunching the Transformation Engine pillar as Transform. In total, this has resulted in a one-off exceptional investment and restructuring cost of £3.1m.

Due to the acquisition of Engine we also decided to consolidate all of our London based employees in their offices in Great Portland St and to vacate our old offices in Bermondsey. We have also continued to consolidate our property portfolio in our key markets of London, New York and San Francisco, resulting in us taking a property impairment charge of £3.9m against our Group properties. We incurred £2.8m of deal costs principally in relation to our acquisition of Engine and our offer for M&C Saatchi. The amortisation of acquired intangibles was £11.6m in the period compared with £8.4m in the prior period.

Balance Sheet

The Group’s balance sheet remains in a strong position with net assets of £103.6m (2021: £121.7m). Since the previous year end, intangible assets have significantly increased primarily due to £49.2m of goodwill and £50.4m of acquired intangible assets recognised as a result of the acquisition of Engine. Contingent consideration also saw a significant increase due to the reassessment of management’s estimation of future amounts payable to certain brands, in particular for Mach49, which has now been estimated to hit the $300m cap on total payments. The estimates around the contingent consideration are considered by management to be an area of significant judgement, which could result in a material adjustment to the value of these liabilities in the future years.

Cashflow

The very strong revenue performance during the period, together with our normal seasonal working capital outflow has negatively impacted our working capital in the first half of our financial year. We had a good new business performance in the first half of FY23 and the time required to complete new clients’ procurement processes has delayed their payments in the short term. These factors and the acquisition of Engine resulted in our net debt excluding lease liabilities increasing to £18.1m as at 31 July 2022 (2021: net cash £6.6m). We are now seeing more normal levels of cash generation and our net debt has reduced to approximately £3m as at 22nd September 2022 after paying our final dividend of £8.3m in August.

Bank refinancing

On 20 September 2021, the Group was made available a £60m revolving credit facility ("RCF") by HSBC and Bank of Ireland. The facility had a maturity date of September 2024 with an option to extend for a further two years. As part of the arrangement, the Group had a £40m accordion option to facilitate future acquisitions. At the start of this year, £20m of this accordion was committed and available within the RCF.

Subsequent to this and in relation to the Group’s recommended offer for M&C Saatchi, the Group entered into an amendment and restatement agreement, amending and restating the existing facility agreement on 20 May 2022. The total amount available under the amended and restated facilities agreement is £150m, comprising of a £50m term facility and increasing the RCF to £100m. Under the amended and restated facilities agreement, £57.5m is available on a certain funds basis to be used for the acquisition of M&C Saatchi. The remaining £92.5m of the RCF facility is available for permitted acquisitions and working capital requirements and is due to be repaid from the trading cash flows of the Group. The facility is available in a combination of sterling, US dollar and Euro. The margin payable on each facility is dependent upon the level of gearing in the business. The Group also has a US facility of $7m (2021: $7m) which is available for property rental guarantees and US-based working capital needs.

Dividend

We are pleased to announce that the Directors recommend an interim dividend of 4.5p which will be paid to shareholders on 25 November 2022 who hold shares on 28 October 2022. This represents an increase of 25% over the prior period.

Current Trading and Outlook

The Group’s strong trading in our first half has continued into the third quarter of our financial year. Whilst we are mindful of the current macro-economic and political backdrop, we remain confident about our outlook.

53% of the Group’s revenues are from the US market, with a further 7% of revenues coming from clients that bill in US dollars. The relative strength of our US businesses provides the Board with a high level of confidence in the trading performance for the rest of the year and beyond and we are confident of delivering adjusted profit before tax for the year at least in line with management expectations as revised upwards following our AGM statement in June.

The significant Mach49 contract win in early 2022 and recently announced new client wins, such as Morrisons for SMG, gives us confidence for further growth in the next financial year.

The Group’s strong balance sheet provides scope for further investments both in the businesses and in M&A to accelerate our longer-term growth.

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED INCOME STATEMENT

FOR THE SIX-MONTH PERIOD ENDED 31 July 2022

Six months
ended
31 July 2022
(Unaudited)

Six months
ended
31 July 2021
(Unaudited)

12 months
ended
31 January 2022
(Audited)

Note

£’000

£’000

£’000

Revenue

341,228

208,756

470,055

Direct costs

(67,235)

(42,807)

(107,952)

Net revenue

2

273,993

165,949

362,103

Staff costs

(188,580)

(122,419)

(258,945)

Depreciation

(6,072)

(4,681)

(9,442)

Amortisation

(12,446)

(9,269)

(19,317)

Other operating charges

(33,331)

(14,705)

(34,414)

Total operating charges

(240,429)

(151,074)

(322,118)

Operating profit

2

33,564

14,875

39,985

Finance expense

6

(43,055)

(12,776)

(121,384)

Finance income

7

976

827

1,049

Share of profit from associate

-

209

211

(Loss)/profit before income tax

3

(8,515)

3,135

(80,139)

Income tax (expense)/credit

4

(1,148)

(3,998)

14,475

Loss for the period

(9,663)

(863)

(65,664)

Attributable to:

Owners of the parent

(10,312)

(2,844)

(69,219)

Non-controlling interests

649

1,981

3,555

(9,663)

(863)

(65,664)

Loss per share

Basic (pence)

8

(10.6)

(3.1)

(74.9)

Diluted (pence)

8

(10.6)

(3.1)

(74.9)

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 July 2022

Six months
ended
31 July 2022
(Unaudited)

Six months
ended
31 July 2021
(Unaudited)

12 months
ended
31 January 2022
(Audited)

£’000

£’000

£’000

Loss for the period

(9,663)

(863)

(65,664)

Other comprehensive (expense)/income:

Items that may be reclassified into profit or loss

Exchange differences on translating foreign operations

(70)

(711)

(963)

(70)

(711)

(963)

Items that will not be reclassified subsequently to profit or loss

Revaluation of investments

(334)

329

7,466

Total other comprehensive (expense)/income for the period

(404)

(382)

6,503

Total comprehensive expense for the period

(10,067)

(1,245)

(59,161)

Attributable to:

Owners of the parent

(10,716)

(3,226)

(62,716)

Non-controlling interests

649

1,981

3,555

(10,067)

(1,245)

(59,161)

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

ADJUSTED RESULTS: KEY PERFORMANCE INDICATORS

Six months ended
31 July 2022
(Unaudited)
£’000

Six months ended
31 July 2021
(Unaudited)
£’000

Net revenue

273,993

165,949

Total operating charges

(205,067)

(124,879)

Depreciation and amortisation

(6,952)

(5,510)

Operating profit

61,974

35,560

Interest on finance lease liabilities

(706)

(555)

Operating profit after interest on finance lease liabilities

61,268

35,005

Operating profit margin

22.4%

21.1%

Net finance expense excluding interest on finance lease liabilities

(614)

(166)

Share of profits of associate

-

209

Profit before income tax

60,654

35,048

Tax

(14,147)

(7,739)

Retained profit

46,507

27,309

Weighted average number of ordinary shares

96,845,504

91,992,850

Diluted weighted average number of ordinary shares

103,977,271

96,443,000

Adjusted earnings per share

47.4p

27.5p

Adjusted diluted earnings per share

44.1p

26.3p

Cash inflow from operating activities

9,974

27,300

Cash outflow on acquisition related payments

102,799

(24,733)

Net (debt)/cash

(18,073)

6,622

Dividend (per share)

4.5p

3.6p

Adjusted results have been presented to provide additional information that may be useful to shareholders to understand the performance of the business by facilitating comparability both year on year and with industry peers. Adjusted results are reconciled to statutory results within notes 2, 3 and 8.

Per note 3, charges for one-off employee incentive schemes, employment linked acquisition payments, restructuring costs, deal costs, property impairment and UK furlough grant are adjusted for in calculating the adjusted operating charges and amortisation of acquired intangibles is adjusted for in calculating the adjusted depreciation and amortisation. Interest on lease liabilities and unwinding of discount and change in estimate of future contingent consideration and share purchase obligation payables are adjusted for in calculating net finance expense.

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED BALANCE SHEET AS AT 31 July 2022

31 July 2022
(Unaudited)

31 July 2021
(Unaudited)

31 January 2022
(Audited)

Note

£’000

£’000

£’000

Assets

Property, plant and equipment

11,226

8,753

7,506

Right-of-use assets

33,159

22,967

19,948

Intangible assets

285,749

183,763

183,050

Investment in equity-accounted associate

-

-

-

Investments in financial assets

705

1,343

8,483

Deferred tax asset

65,720

15,875

46,350

Other receivables

780

823

821

Total non-current assets

397,339

233,524

266,158

Trade and other receivables

184,509

115,612

119,676

Cash and cash equivalents

9

29,005

27,342

58,216

Corporation tax asset

990

776

708

Total current assets

214,504

143,730

178,600

Total assets

611,843

377,254

444,758

Liabilities

Loans and borrowings

9

47,078

-

22,478

Deferred tax liabilities

15,346

2,729

3,187

Lease liabilities

35,122

26,456

22,285

Other payables

-

1,482

401

Provisions

13,627

7,455

14,733

Contingent consideration

Other contingent liability

10

10

140,051

3,406

20,694

3,927

125,045

5,202

Share purchase obligation

10

5,208

8,183

9,717

Total non-current liabilities

259,838

70,926

203,048

Loans and borrowings

9

-

20,720

-

Trade and other payables

163,716

115,455

120,333

Lease liabilities

14,370

10,851

10,698

Provisions

11,548

5,721

7,778

Corporation tax liability

6,078

1,612

3,278

Deferred consideration

10

-

125

133

Contingent consideration

10

42,949

28,683

36,496

Other contingent liability

10

2,487

-

-

Share purchase obligation

10

7,211

1,480

1,535

Total current liabilities

248,359

184,647

180,251

Total liabilities

508,197

255,573

383,299

TOTAL NET ASSETS

103,646

121,681

61,459

Equity

Share capital

2,455

2,317

2,320

Share premium reserve

163,706

103,952

104,800

Foreign currency translation reserve

5,133

5,455

5,203

Other reserves

(2,065)

(2,065)

(2,065)

Retained earnings

(65,961)

10,793

(50,429)

Total equity attributable to owners of the parent

103,268

120,452

59,829

Non-controlling interests

378

1,229

1,630

TOTAL EQUITY

103,646

121,681

61,459

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 July 2022

Share
capital

Share
premium
reserve

Foreign
currency
translation
reserve

Other
reserves1

Retained
earnings

Equity
attributable to

owners of the
Company

Non-
controlling
interests

Total
equity

£’000

£’000

£’000

£’000

£’000

£’000

£’000

£’000

At 31 January 2021 (audited)

2,274

92,408

6,166

(2,065)

18,174

116,957

(76)

116,881

(Loss) / profit for the period

-

-

-

-

(2,844)

(2,844)

1,981

(863)

Other comprehensive (expense) / income for the period

-

-

(711)

-

329

(382)

-

(382)

Total comprehensive (expense) / income for the period

-

-

(711)

-

(2,515)

(3,226)

1,981

(1,245)

Shares issued on satisfaction of vested share options

20

4,763

-

-

(4,783)

-

-

-

Shares issued on acquisitions

23

6,781

-

-

-

6,804

-

6,804

Movement in relation to share-based payments

-

-

-

-

6,346

6,346

-

6,346

Dividends to owners of the parent

-

-

-

-

(6,491)

(6,491)

-

(6,491)

Movement on reserves for non-controlling interests

-

-

-

-

62

62

(62)

-

Non-controlling interest purchased in the period

-

-

-

-

-

-

564

564

Non-controlling interest dividend

-

-

-

-

-

-

(1,178)

(1,178)

At 31 July 2021 (unaudited)

2,317

103,952

5,455

(2,065)

10,793

120,452

1,229

121,681

(Loss) / profit for the period

-

-

-

-

(66,375)

(66,375)

1,574

(64,801)

Other comprehensive expense for the period

-

-

(252)

-

7,137

6,885

-

6,885

Total comprehensive (expense) / income for the period

-

-

(252)

-

(59,238)

(59,490)

1,574

(57,916)

Shares issued on satisfaction of vested share options

2

622

-

-

(624)

-

-

-

Shares issued on acquisitions

1

226

-

-

-

227

-

227

Movement in relation to share-based payments

-

-

-

-

1,976

1,976

-

1,976

Dividends to owners of the Parent

-

-

-

-

(3,341)

(3,341)

-

(3,341)

Movement due to ESOP share purchases

-

-

-

(3)

-

(3)

-

(3)

Movement due to ESOP share option exercises

-

-

-

3

-

3

-

3

Movement on reserves for non-controlling interests

-

-

-

-

5

5

(5)

-

Non-controlling interest purchased in the period

-

-

-

-

-

-

21

21

Non-controlling interest reversed in the period

-

-

-

-

-

-

171

171

Non-controlling interest dividend

-

-

-

-

-

-

(1,360)

(1,360)

At 31 January 2022 (audited)

2,320

104,800

5,203

(2,065)

(50,429)

59,829

1,630

61,459

(Loss) / profit for the period

-

-

-

-

(10,312)

(10,312)

649

(9,663)

Other comprehensive expense for the period

-

-

(70)

-

(334)

(404)

-

(404)

Total comprehensive (expense) / income for the period

-

-

(70)

-

(10,646)

(10,716)

649

(10,067)

Shares issued on satisfaction of vested share options

3

524

-

-

(1,505)

(978)

-

(978)

Shares issued on acquisitions

19

9,855

-

-

-

9,874

-

9,874

Shares issued on placing

113

48,527

-

-

-

48,640

-

48,640

Movement in relation to share-based payments

-

-

-

-

5,083

5,083

-

5,083

Dividends to owners of the parent

-

-

-

-

(8,251)

(8,251)

-

(8,251)

Movement on reserves for non-controlling interests

-

-

-

-

(213)

(213)

213

-

Non-controlling interest dividend

-

-

-

-

-

-

(2,114)

(2,114)

At 31 July 2022 (unaudited)

2,455

163,706

5,133

(2,065)

(65,961)

103,268

378

103,646

1Other reserves include ESOP reserve, hedging reserve, share purchase reserve and merger reserve.

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE SIX MONTH PERIOD ENDED 31 July 2022

Six months ended
31 July 2022
(Unaudited)

Six months ended
31 July 2021
(Unaudited)

Twelve months
ended
31 January 2022
(Audited)

£’000

£’000

£’000

Cash flows from operating activities

Loss for the period

(9,663)

(863)

(65,664)

Adjustments for:

...