AUS
NZ
UK
CA
USA
IND
Shares in public relations firm Next 15 (LSE:NFG) experienced a sharp decline early on Friday following the announcement that one of its largest clients would not be renewing their contract. The client's decision to end their agreement after its initial three-year term is expected to lead to a significant reduction of £80 million in revenue for Next 15’s venture building division, Mach49, in fiscal year 2026. Consequently, the company has revised its forward guidance downward.
Despite reporting a 2.5% increase in revenues to £577.8 million, largely driven by acquisition-related growth, and a 6.1% rise in adjusted operating profits to £121.1 million, the company faces ongoing challenges. The improvement in operating profit margins by 80 basis points to 21% reflects operational efficiencies achieved. However, Next 15 noted persistent weaknesses in spending from technology clients and reduced revenues from public sector customers.
While the firm acknowledged strong performances from several of its consumer-facing businesses, the termination of the major client contract has raised concerns. The contract's end will impact the final month of the fiscal year, prompting the board to adjust its revenue forecasts for fiscal year 2025 downward. The company anticipates that revenue will fall short of earlier expectations and that profits will be significantly below previous projections.
As of 0950 BST, Next 15’s shares had plunged by 50.72% to 408.0p. This substantial decline reflects the market's reaction to the unexpected loss of a major client and the subsequent revisions to revenue forecasts and profitability expectations.
