Next15: M&C Saatchi deal remains ‘compelling’

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  • The numbers show that Next Fifteen’s first-half earnings and revenue rose.
  • But the group’s share price is down more than 6% today and down 28% for the year.

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Communications group Next Fifteen reported a 65% increase in revenue for the first half of the year, while adjusted profit before tax increased by 73%.

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In May, London-listed Next Fifteen offered the M&C Saatchi ad agency group a cash and stock offer valuing the company’s stake at 247.2 per annum in a deal it wants to negotiate. The offer includes 0.1637 new Next Fifteen shares and 40p cash.

M&C Saatchi subsequently withdrew its support for Next Fifteen’s £310m takeover bid, saying it no longer considered the terms “fair and reasonable”.

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Offer: In May, London-listed Next Fifteen submitted a cash and share offer to advertising agency group M&C Saatchi.

In June, M&C Saatchi said the reason for withdrawing support was the decline in Next Fifteen’s share price.

Next Fifteen share price fell 6.91%, or 60.00 pence, to 808.00 pence this afternoon, and the group’s shares are down more than 28 percent over the past year.

Next Fifteen said today: “In May 2022, we announced our offer to acquire M&C Saatchi.

“We believe this is a great opportunity to bring two complementary organizations together to add value to both businesses.

“We remain confident that the transaction will result in an immediate and substantial increase in earnings with the potential for significant synergies. We expect a final decision on this process in the fourth quarter of the calendar year.”

Tim Dyson, chief executive of Next Fifteen, said: “It was a fantastic first half performance with all four pillars of our business delivering double-digit organic revenue growth.”

He added: “Acquisitions have always been a core component of our growth strategy. In May, we announced our offer to acquire M&C Saatchi, which we saw as a very strong case to combine two complementary businesses and create significant value for both groups of shareholders.

“This opportunity is as compelling today as it was in May, as our positive engagement with M&C Saatchi’s broader leadership team only strengthens our confidence in the combined group’s prospects.

“Looking ahead, we can say that in the third quarter we maintained a strong performance in all areas of business. We expect our results for the full year to at least be in line with management’s expectations as revised following our AGM.”

Group net revenue rose 65% to £274m from £165.9m in 2021, while adjusted profit before tax increased 73% to £60.7m.

Next Fifteen completed the acquisition of Engine in March 2022 with a £50 million offering.

Next Fifteen reported today: “Integration continues as planned and we are in the process of closing our Bermondsey offices and moving all Next 15 London staff to the Engine offices at 60 Great Portland Street.”

The group’s board of directors today recommended an interim dividend of 4.5p to be paid to shareholders on November 25, 2022. This is 25% more than in the previous period.

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