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

Communications group Next Fifteen has announced sales growth of 65 percent for the first half of the year, with adjusted profit before tax of 73 percent.

In May, London-listed Next Fifteen made a cash and stock offer for advertising agency group M&C Saatchi, valuing the company at 247.2pa share in a deal it wants to negotiate. The offer includes 0.1637 of a new share of Next Fifteen and 40 pence in cash.

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

In June, M&C Saatchi said the reason for withdrawing its support was the fall in the value of Next Fifteen’s shares.

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

Next Fifteen said today: “We announced our offer to acquire M&C Saatchi in May 2022.

“We believe it is a great opportunity to bring two highly complementary organizations together to increase the value of both companies.

“We remain convinced that the transaction will be immediate and materially profitable with the potential to unlock 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: “This 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 part 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 companies and creating significant value for both groups of shareholders.

“This opportunity is just as attractive today as it was in May, where our positive engagement with M&C Saatchi’s broader management team has only increased our confidence in the prospects for the combined group.

“Looking ahead, our strong performance continued in the third quarter with a high level of activity across all areas of the business. We expect our full year results to be at least in line with management’s expectations, as revised in response to our AGM statement.’

The group’s net sales grew 65 percent to £274 million, from £165.9 million in 2021, while adjusted profit before tax was 73 percent higher, to £60.7 million.

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

Next Fifteen said today: “The integration is progressing according to plan and we are in the process of closing our Bermondsey offices and moving all staff from Next 15 in London to Engine’s offices at 60 Great Portland Street.”

The group’s board of directors today recommended an interim dividend of 4.5 pence, which will be paid to shareholders on November 25, 2022. This is an increase of 25 percent compared to the previous period.