Shares in marking consultancy Next Fifteen Communications Group (NFC:AIM) jumped 5.6% to £11.83 after announcing that third quarter trading was ahead of expectations.
Revenues for the three months through October grew around 38% year-on-year, with organic revenues up 26%.
This resulted in revenues for the nine months through October growing 34%, with organic revenue growth of 24%.
Management have highlighted that the strong performance has continued into the fourth quarter. Results for the year to January 2022 are expected to be ahead of management expectations.
EARNINGS UPGRADE CYCLE CONTINUES
The strong third quarter trading update follows on from a robust set of results for the six months to the end of July, announced in September.
These were reflected in headline revenue growth of 32% (organic +23%) driving a 69% growth in profit before tax, and a 59% jump in earnings per share.
As with today’s trading update the half year results prompted a series of earnings upgrades.
M&A GROWTH DRIVER
M&A (mergers and acquisitions) remains a key growth driver for Next Fifteen, with the company sticking to its tried and tested M&A model which is based around backing entrepreneurial management teams who are looking to de-risk their next stage of growth.
Key recent acquisitions have included:
Shopper Media Group - a data driven retail sales agency that sits within the Delivery segment, acquired in April 2021 for an initial consideration of £15.7m and a five-year earn out structure.
BCA - focused primarily on advising on initial public offerings in technology and SPACs (special purpose acquisition companies) and has been performing strongly (2020 revenues of $4.1m and earnings before interest and tax margins in excess of 60%).
Next Fifteen acquired a 31% controlling interest in the business that was formed in 2016 by the Blueshirt investor relations agency.
