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Next 15 Communications Group plc (LSE:NFG) has announced that a major contract with Mach49’s largest customer will not be renewed after its initial three-year term, set to expire on 31 December 2024. The contract had been expected to contribute over £80 million in revenue for FY26. Although Next 15 anticipates that the client may continue to use Mach49’s services in some capacity, the company has decided to significantly reduce its financial forecasts for the fiscal year ending 31 January 2026. This adjustment will also lower the earnout obligations owed to Mach49's shareholders over the next three years.
The loss of this contract presents a notable setback for the Group, particularly given its expected contribution to future revenues. However, the company remains cautiously optimistic about maintaining a relationship with the client, though on a smaller scale.
Challenges Across Key Sectors
In addition to the contract loss, Next 15 has reported continued challenges in several key areas. While some of the Group's consumer-facing businesses have performed well, the company has experienced persistent weakness in spending from its technology clients. Revenues from public sector clients have also declined, adding further pressure to the Group’s financial performance.
These factors, combined with the termination of the Mach49 contract in the last month of the fiscal year, have led the Board to lower its revenue and profit expectations for FY25. Profits are now expected to fall materially below management’s earlier forecasts.
Looking Ahead: Interim Results in September
Next 15 will provide further details on its performance and outlook in its upcoming interim results, scheduled for release on 17 September 2024.
