Next Fifteen hails M&C Saatchi deal a ‘compelling opportunity’ 

Communications group Next Fifteen has unveiled revenue growth of 65 per cent for the first half of the year, with adjusted pre-tax profits up 73 per cent. 

In May, London-listed Next Fifteen tabled a cash and share offer for advertising agency group M&C Saatchi, valuing the company at 247.2p a share in a deal that it wants to seal through a scheme of arrangement. The offer comprises 0.1637 of a new Next Fifteen share and 40p in cash.

M&C Saatchi subsequently withdrew its support for the £310million takeover bid from Next Fifteen, claiming it no longer regarded the terms as ‘fair and reasonable.’

In June, M&C Saatchi said the reason behind the withdrawal of its support was the decline in the value of Next Fifteen’s shares. 

Next Fifteen’s share price fell 6.91 per cent or 60.00p to 808.00p this afternoon, and the group’s shares have fallen over 28 per cent in the last year.  

Today, Next Fifteen said: ‘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.’       

Tim Dyson, chief executive of Next Fifteen, said: ‘This has been a fantastic first half performance with all four pillars of our business having shown double digit organic revenue growth.’

He added: ‘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.’

Group net revenue grew by 65 per cent to £274million, against £165.9million in 2021, while the adjusted profit before tax came in 73 per cent higher, at £60.7million.

Next Fifteen completed the acquisition of Engine in March 2022, funded by a £50million placing. 

Next Fifteen said today: ‘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.’

The group’s board of directors today recommended an interim dividend of 4.5p, which will be paid to shareholders on 25 November 2022. This represents an increase of 25 per cent over the prior period.