REG-Next 15 Group plc Half-year Report
30/09/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250930:nBw9Q9lPha&default-theme=true
Half-year Report
30 September 2025
Next 15 Group plc
(“Next 15” or the “Group”)
Interim results for the six months ended 31 July 2025
Robust Performance despite difficult market conditions
Current Trading in line with Full-Year Expectations supported by disciplined
cost management and portfolio simplification
Next 15 Group plc (AIM:NFG), the tech and data-driven growth consultancy,
today announces its interim results for the six months ended 31 July 2025.
Financial results for the six months to 31 July 2025 (unaudited)
Six months ended Six months ended % change year on year
31 July 2025
31 July 2024
£m
£m
Adjusted results(1)
Net revenue 230.8 239.4 (3.6)%
Adjusted operating profit 32.7 33.7 (3.1)%
Adjusted operating profit margin 14.2% 14.1%
Adjusted profit before tax 30.9 31.4 (1.4)%
Adjusted diluted earnings per share (p) 21.4p 20.8p 2.9%
Statutory results
Net cash inflow from operating activities 5.6 4.6 22.7%
Revenue 324.2 364.1 (11.0)%
Profit before tax 2.8 33.4 (91.6)%
Diluted (loss)/earnings per share (p) (1.4)p 21.1p (106.6)%
(1)Adjusted results have been presented to provide additional information that
may be useful to shareholders to understand the performance of the Group by
facilitating comparability both year on year and with industry peers. Adjusted
results are reconciled to statutory results within the appendix. The adjusted
results exclude Mach49 on the basis that it will be treated as a discontinued
operation and reported separately for the full year.
Financial highlights
* Net revenue marginally down at £230.8m, a reduction of 3.6% (5.3% on a
constant currency basis), reflecting an uncertain macroeconomic backdrop, US
tariffs, particularly affecting discretionary marketing spend.
* Strong performance within Retail Media and public sector Digital
Transformation (which increased by more than 50%) partially offsetting a
continued decline in technology client spend.
* Adjusted operating profit of £32.7m, down 3.1%, with margin maintained at
14.2% due to focus on costs and simplification.
* Statutory profit before tax reduced to £2.8m, principally due to the
write-downs in Mach49 (£10.0m) and related advisory costs (£4.4m).
* Adjusted diluted earnings per share of 21.4p, up 2.9% on last year, driven by
a reduction in minority interests and settling earn-outs with cash.
* Interim dividend maintained at 4.75p per share, underpinned by strong cashflow
and solid balance sheet.
* Net cash inflow from operating activities increased against last year to
£5.6m, with net debt of £45.3m as at 31 July 2025. The Group is now seeing
the benefit of improved working capital management processes with a positive
inflow of cash from working capital of £4.3m compared to an outflow of
£31.9m last year.
Operational highlights
* Simplification strategy underway with the portfolio of businesses reduced from
22 to 12.
* Completed disposals of two smaller entities, Palladium and BYND
(‘Beyond’). Total consideration estimated to be £6.3m
* Savanta & Plinc and House 337 & Elvis integrations underway.
* Four B2B tech marketing agencies combined into a single new data and AI led
business yielding immediate substantial cost efficiencies.
* Commenced the winding-down of the operations of Mach49, expected to be
completed by year-end.
Current trading and outlook
* Trading in the first couple of months of H2 FY26 is progressing as expected.
* Full year performance anticipated to be in line with market expectations,
supported by robust growth in high-potential markets such as Digital
Transformation, Retail Media, and data-driven services.
* Focus remains on portfolio simplification, margin discipline, and capital
allocation discipline with cost efficiencies and ongoing efforts to streamline
the business reinforcing profitability in the second half.
Commenting on the results, Sam Knights said:
“In my first 100 days as CEO, we have acted decisively to resolve legacy
issues, simplify the Group, and position the business for sustainable growth.
We have reduced our portfolio from 22 to 12 businesses, completed the
disposals of Palladium and Beyond, and initiated the integrations of Savanta
with Plinc and House 337 with Elvis. At the same time, we have commenced the
wind-down of Mach49, which will complete by year-end.
While technology markets remain under pressure, we have seen strong
performances in our FMCG and government businesses, as well as continued
momentum in Digital Transformation. These strengths, combined with disciplined
cost management, have enabled us to maintain margins and improve cash
generation despite softer revenues.
With a stronger balance sheet, lower leverage, and clear strategic priorities,
we are well placed to meet expectations for the full year.”
Trading
The Group has delivered a solid first-half performance, with trading in line
with expectations despite ongoing macroeconomic uncertainties. This trading
performance demonstrates the Group’s resilience, underpinned by its
strategic focus on portfolio simplification, disciplined cost management, and
strong growth in the parts of the group most focused on data and digital
transformation, which remain central to its long-term development strategy.
Performance across key client sectors has been varied, but particularly
encouraging in strategic growth areas. Although revenue declined slightly due
to a weaker USD, global economic challenges, US tariff uncertainty, and
reduced spend from tech clients (prioritising AI investments over other
activities), the Consumer & Retail client base delivered robust growth.
Revenues within this wide ranging client sector increased by £6m (9%) making
this our largest client group, now accounting for 31% of total revenues. The
Public Sector client base was the fastest growing, with revenues increasing by
45%, driven by a rise in government projects. However, Technology client
revenues declined by £12.1m (~15%), reflecting broader sectoral headwinds.
Continued focus on cost management, resource optimisation, and the benefits of
consolidation delivered by the initial phases of the simplification strategy
all contributed to a slight improvement in adjusted operating margins to 14.2%
(H1 FY25: 14.1%). As part of the Group's drive for efficiency, average
headcount has been reduced to 3,747 in H1 FY26 (H1 FY25: 4,070), further
supporting the Group's focus on sustainable growth and profitability.
The balance sheet remains healthy and leverage remains low with Net
Debt/Adjusted EBITDA at 0.5x (against a covenant limit of 2.5x). Operating
cash flow improved in H1 driven in large part by the disciplined management of
working capital, which generated a £4.3m working capital inflow, a
substantial improvement on the £31.9m outflow in H1 FY25.
We are in the process of winding down the Mach49 business, with completion
expected by year-end. For full-year reporting, Mach49 will be classified as a
discontinued operation, with its results presented separately in the financial
statements. Mach49 reported an operating loss of £2.9m in the first half of
the year, with further losses anticipated in the second half. Additionally, we
incurred £4.4m in legal and related advisory costs during the first half,
primarily relating to the potential serious misconduct identified in Mach49
and the arbitration proceedings with the former members of Mach49, and to
facilitate the wind-down process. As these proceedings remain ongoing, we have
excluded these costs from our financial guidance.
The Board has maintained the interim dividend at 4.75p per share, reflecting
confidence in the Group’s strong balance sheet and near term outlook. This
represents a cash cost of £4.75m, payable to shareholders on 21 November 2025
who hold shares on 17 October 2025.
Strategy
The first half of FY26 marks a transformative period for Next 15 as we
navigated complex macroeconomic conditions while taking strategic actions to
shape a more robust and focused business. Performance during H1 illustrates
both the resiliency embedded in the Group's portfolio of businesses and the
importance of our decisive moves to streamline operations.
The Group is focused on strengthening those businesses with the greatest
long-term opportunity and to focus on leveraging its key capabilities to
accelerate growth and retention, even in challenging market conditions. The
first half of FY26 has seen significant steps taken to position the Group for
long-term success.
The Group's core strengths lie in its leadership within high-growth markets
such as retail media, data and insights, and digital transformation, which
continue to show robust client demand and structural growth drivers. Supported
by extensive internal resources, including proprietary data and tools, we
deliver enriched data-driven decision-making for our clients, ensuring we
remain at the forefront of innovation and client impact. The strength of the
Group's talent and culture is another defining factor, with employee retention
and engagement levels exceeding industry norms, fostering operational
excellence and adaptability. Additionally, our early adoption of AI solutions,
such as synthetic personas, and agentic AI highlights our ability to align
powerful emerging technologies with evolving client needs. Looking ahead, the
Group is committed to maintaining its focus on data, technology, and
activation as key pillars of its future growth.
We recognise the importance of sustaining robust financial performance while
preparing for the future. With solid margins and investments targeted toward
high-growth areas, the Group is well-positioned to capitalise on evolving
market opportunities and deliver lasting value for all stakeholders.
A key focus in the first half of the year has been the simplification of our
group structure. By streamlining our organisational framework, we aim to
create a more agile and efficient business that is easier to understand for
all stakeholders. This will enable clearer decision-making processes, improved
resource allocation, and a sharper focus on delivering sustainable growth.
The Group has made significant progress in its portfolio simplification
strategy, reducing the number of businesses from 22 to 12. This includes the
successful disposals of Beyond and Palladium, the currently ongoing
consolidation of Savanta and Plinc into a unified Research & Insights
business, and the currently ongoing integration of House 337 and Elvis into a
single Creative Marketing agency. Additionally, we are integrating four B2B
marketing businesses into a single, streamlined entity, which will be launched
to the market later this year, which is delivering operational efficiencies.
Outlook
Trading in the first couple of months of H2 FY26 is progressing as expected
with phasing of revenue and adjusted operating profit consistent with previous
years. The Group expects performance for the full year to be in line with
market expectations, supported by robust growth in high-potential markets such
as Digital Transformation, Retail Media, and data-driven services. Our focus
remains on portfolio simplification, margin discipline, and capital allocation
discipline. Cost efficiencies and ongoing efforts to streamline the business
will reinforce profitability in the second half.
Webcast for analysts and investors
Next 15 will host an analyst and investor webcast at 9:30am today (UK time),
Tuesday 30 September 2025.
To access the webinar, please contact next15@mhpgroup.com
(mailto:next15@mhpgroup.com)
For further information contact:
Next 15 Group plc (via MHP)
Sam Knights, Chief Executive Officer
Mickey Kalifa, Chief Financial Officer
Deutsche Numis (Nomad & Joint Broker)
Mark Lander, Hugo Rubinstein
+44 (0)20 7260 1000
Berenberg (Joint Broker)
Ben Wright, Mark Whitmore, Richard Andrews
+44 (0)20 3207 7800
MHP (Investor Relations)
Oliver Hughes, Eleni Menikou, Veronica Farah
Next15@mhpgroup.com
(mailto:Next15@mhpgroup.com)
+44 (0)7701 308 818
Notes:
Net revenue
Net revenue is calculated as revenue less direct costs as shown on the
Consolidated Income Statement, excluding revenue and direct costs associated
with Mach49.
Organic net revenue growth
Organic net revenue growth is defined as the net revenue growth at constant
currency excluding the impact of acquisitions and disposals in the last 12
months. For acquisitions made in the prior year, only the corresponding months
of ownership are included in the calculation of growth. Net revenue is
reconciled to statutory revenue within the appendix and a reconciliation of
the movement in the year is included in the net revenue bridge on page 8.
Adjusted operating profit margin
Adjusted operating profit margin is calculated based on the adjusted operating
profit as a percentage of net revenue. Adjusted operating profit is reconciled
to statutory results within the appendix.
This announcement contains inside information as defined in Article 7 of the
Market Abuse Regulation.
About Next 15
Next 15 (AIM:NFG) is an AIM-listed tech and data-driven growth consultancy
with operations in Europe, North America and across Asia Pacific. The Group
has long-term customer relationships with many of the world’s leading
companies including Google, Amazon, Boots, Dow, Microsoft, Dell, American
Express and Procter & Gamble.
The business operates across four segments, each of which describes how we
help customers grow in different ways: Customer Insight helps them understand
their opportunities and challenges; Customer Engagement optimises their
reputation and digital assets; Customer Delivery helps them connect with
customers to drive sales; and Business Transformation helps maximise long-term
value through corporate positioning, business design and the development of
new ventures.
At Next 15, success is underpinned by a people-led approach. Our purpose is to
make our customers and our people the best versions of themselves, and our
culture is empowering and respectful.
Chief Executive’s Statement
Review of six months ended 31 July 2025
The Group delivered a robust performance despite difficult market conditions.
Stronger performance in Retail Media and Digital Transformation markets partly
offset the decline in Technology client revenue. The Group’s net revenue was
marginally down to £230.8m, partly impacted by the weaker USD, and adjusted
operating profits were down by 3.1% to £32.7m at a stable margin of 14.2%,
reflecting the continued focus on our cost management. Adjusted diluted
earnings per share increased by 2.9% to 21.4p from 20.8p in the prior year,
reflecting the reduction in minorities and settling of earn-outs with cash.
The statutory profit before tax was £2.8m (31 July 2024: £33.4m) and diluted
loss per share was 1.4p, compared with diluted earnings per share of 21.1p in
the previous year.
Simplification Strategy
The Group made significant progress with its simplification programme during
the period, reducing its portfolio from 22 to 12 businesses in the first half
of the year. The Beyond and Palladium businesses were both sold for estimated
total consideration of £6.3m, leading to an overall gain on disposal of
£4.1m. Integration is underway to combine Savanta and Plinc into a single
business, with the same process in motion for House & Elvis. We have made
excellent progress in consolidating our B2B marketing businesses into a single
brand, which is expected to launch to the market later this year. The
beneficial impact on margin has been immediate. We are in the process of
winding down the Mach49 business, which is expected to be completed by
year-end.
Returns to shareholders
Our priority is to maintain a healthy, low leveraged balance sheet, followed
by investment into the business in a selective manner to support long-term
growth of the Group. The Board will continue to prioritise organic investment
in the business, alongside selective M&A with a focus on bolt-on
acquisitions to enhance key business areas. Beyond this, we will seek to
return excess cash to shareholders, firstly through a regular dividend and,
when possible, further capital returns.
We are pleased to announce that the Board is recommending the payment of an
interim dividend of 4.75p, which will be paid to shareholders on 21 November
2025 who hold shares on 17 October 2025. This is in line with the interim
dividend payment for the prior period.
Review of adjusted results to 31 July 2025
In order to assist shareholders’ understanding of the performance of the
business, the following commentary is focused on the adjusted performance for
the six months to 31 July 2025, compared with the six months to 31 July 2024.
The Directors consider these adjusted measures to be highly relevant as they
reflect the trading performance of the business. They also give shareholders
more information to allow for understandable like-for-like year on year
comparisons and more closely correlate with the cash and working capital
position of the Group.
Net revenue bridge
Movement
Net Revenue (£m)
(% of prior year net revenue)
6 months to 31 July 2024 (adjusted) 239.4
Impact of disposals (0.8) (0.3)%
Organic decline (12.5) (5.3)%
Contribution from acquisitions 8.6 3.6%
Impact of FX (3.9) (1.7)%
6 months to 31 July 2025 230.8
The Group has delivered a robust performance over the last six months despite
the difficult market conditions. We delivered strong growth in government
revenues (via Transform) which were up over 45% and our Consumer & Retail
revenue also grew by £6m, with strong performances from both SMG and M Booth.
This was offset by revenue declines from our tech clients, which reduced by
15% compared with the first six months of last year. Despite the lower
revenue, adjusted operating profit margin remained flat at 14.2%, reflecting
the disciplined cost management and benefits from the previous restructuring.
Consistent with performance in prior years, we expect revenues and profit to
be modestly second half weighted.
Our effective tax rate on adjusted profit marginally increased to 26.2% (31
July 2024: 25.5%) due to the increased proportion of our profits coming from
our higher taxed overseas operations. The decrease in profits attributable to
non-controlling interests and the reduction in interest charge contributed to
our adjusted diluted EPS improving marginally by 2.9% to 21.4p (31 July 2024:
20.8p). The Group reported a statutory profit before tax of £2.8m compared
with £33.4m in the prior period, while reported diluted loss per share was
1.4p compared with diluted earnings per share of 21.1p in the prior period.
The Mach49 related losses and impairments resulted in significant charges in
the period, compared with the credits last year as a result of the change in
earnout value estimate. This contributed to the reduction in statutory profit
before tax.
The Group’s balance sheet remains healthy. Leverage also remains low with
net debt excluding lease liabilities of £45.3m as at 31 July 2025, which is
after cash payments of £26.2m for acquisition related liabilities in the
first half. Trading inflows were also strengthened by £4.3m of working
capital inflows, driven by a disciplined focus on the management of working
capital across the Group.
Reconciliation between statutory and adjusted profit
Six months ended Six months ended
31 July 2025
31 July 2024
(Unaudited)
(Unaudited)
£’000 £’000
Profit before income tax 2,826 33,392
Acquisition accounting related costs(1) 11,926 7,987
Costs associated with operational restructuring 1,910 4,195
Deal costs 1,008 170
Goodwill impairment and intangibles write off 10,044 -
Legal and advisor costs associated with Mach49 4,391 -
Gain on disposal of subsidiaries (4,108) -
Previously reported adjusted profit before income tax 27,997 45,744
Mach49 trading loss/(profit) 2,946 (14,368)
Adjusted profit before income tax(2) 30,943 31,376
(1) Acquisition accounting related costs includes unwinding of discount and
change in estimate on deferred and contingent consideration and share purchase
obligation payable, employment linked acquisition payments and amortisation of
acquired intangibles.
(2) A full reconciliation and further detail is set out in the appendix.
Adjusted financial measures are presented to provide additional information
that may be useful to shareholders through facilitating comparability with
industry peers and to best represent the underlying performance of the
business. Adjusted results are explained and reconciled to statutory results
within the Appendix.
Acquisition related costs include an overall net charge of £1.2m in relation
to our estimate of future earnout liabilities. This is due to the unwinding of
the discount on contingent consideration of £5.1m, which was offset by a
£3.9m credit in relation to the change in estimate, reflecting the reduction
of management’s estimate of future amounts payable. As a Group, we have also
moved towards the inclusion of employment conditions for certain
acquisition-related payments. As a result, we are required to build up a
provision relating to these payments over time and therefore this has led to
an accounting charge of £3.4m (31 July 2024: £2.4m). The amortisation of
acquired intangibles was £7.4m compared with £10.2m in the prior period.
We incurred £1.9m of restructuring costs in the period, primarily relating to
staff redundancies as we proactively reduced our cost base to take account of
the weakness in demand from tech clients and anticipated efficiencies arising
out of the increased adoption of AI. We also incurred £1.0m of advisory fees
related to structural reorganisations of the Group.
As a result of the Group’s decision to initiate the process to permanently
cease operations of Mach49 LLC and its associated entities, we recognised an
impairment charge of £9.1m to fully impair the carrying value of goodwill
relating to Mach49 and £0.9m charge to write off the value attributed to the
brand name.
We incurred £4.4m of costs for legal and advisor fees, as a result of the
work done earlier in the year relating to the previously announced potential
serious misconduct identified in Mach49, the arbitration proceedings with the
former members of Mach49 and the wind down of Mach49. The Group expects Mach49
to be fully wound down by the end of the financial year and therefore as a
result it to be reported as a discontinued operation for the full year and on
this basis, the £2.9m trading loss in FY26 H1 has been adjusted for.
Progress has been made in simplifying the Group which has included the
disposals of Palladium and Beyond for £6.3m consideration. This has led to an
overall gain on disposals of £4.1m.
Segment adjusted performance
Customer Customer Customer Business Head Total
Engage
Delivery
Insight
Transformation
Office
(excl
£’000
£’000
£’000
£’000
£’000
M49)
£’000
Six months ended 31 July 2025
Net revenue 115,974 53,625 25,769 35,479 - 230,847
Adjusted operating profit/(loss) 23,362 9,423 3,120 4,241 (7,461) 32,685
Adjusted operating profit margin(1) 20.1% 17.6% 12.1% 12.0% - 14.2%
Organic net revenue (decline)/growth (9.6)% (8.3)% (6.4)% 31.2% - (5.3)%
Six months ended 31 July 2024
Net revenue 134,368 54,966 27,892 22,182 - 239,408
Adjusted operating profit/(loss) 26,636 11,998 3,081 2,139 (10,132) 33,722
Adjusted operating profit margin(1) 19.8% 21.8% 11.0% 9.6% - 14.1%
Organic net revenue (decline)/growth (1.0)% 6.9% (6.8)% (29.1)% - (3.4)%
(1) Adjusted operating profit margin is calculated based on the adjusted
operating profit as a percentage of net revenue.
The Group continues to report the same four operational segments as previously
reported. However, the Group is likely to move to a new segmental reporting
for the full year in line with the changes in business structure.
The Customer Engage segment includes M Booth, M Booth Health, Marker,
Brandwidth, MHP and House 337. The segment produced a resilient performance
given the market conditions, with organic revenue declining 10% due to weaker
performances in Marker, Brandwidth and House 337, which was partially offset
by a strong performance from M Booth which grew 15%. The segment delivered a
strong adjusted operating profit of £23.4m at an improved margin of 20.1%,
reflecting the cost savings measures taken.
The Customer Delivery segment includes SMG, Activate, and the four B2B
marketing businesses. Overall, the organic revenue declined 8% due to weak
trading at Activate as a result of the reduced spend by technology clients. On
the other hand, SMG had a very positive first half, as revenues grew 14%, with
new clients wins and focus in the US. Adjusted operating profit reduced to
£9.4m as a result of the continued investment spend in SMG and high operating
leverage in Activate, leading to the adjusted operating profit margin reducing
to 17.6%.
The Customer Insights segment includes Savanta and Plinc. Overall, organic net
revenue declined 6% as a result of weakness and delays in client spend.
However, adjusted operating profit marginally increased to £3.1m, at an
improved operating profit margin of 12.1%, reflecting the impact of the cost
reductions made.
The Business Transformation segment now includes Blueshirt and Transform
following the sale of Palladium and closure of Mach49. Overall, the segment
had an impressive organic net revenue growth of over 31%, driven by the growth
in Transform resulting from increased government spending. Adjusted operating
profit nearly doubled to £4.2m at an improved adjusted operating profit
margin of 12.0% through positive operational leverage.
Balance Sheet
The Group’s balance sheet remains strong, with net assets of £164.0m
(£169.9m at 31 July 2024 and £181.2m at 31 January 2025). Since the previous
year end, non-current assets have reduced primarily due to the amortisation of
acquired intangible assets during the period and goodwill impairment. Net debt
increased to £45.3m as at 31 July 2025 compared with £38.4m at the previous
year end, primarily due to cash payments of £26.2m for acquisition related
liabilities, as well as staff bonuses paid during the period.
The Group has a £175m revolving credit facility (“RCF”) with a consortium
of 5 banks, and as part of the arrangement, the Group has an additional £25m
accordion option. The facility is available until December 2027 with an option
to extend for a further year. The RCF facility is available for permitted
acquisitions and working capital requirements.
Contingent consideration outstanding as at 31 July 2025 also saw a decrease
compared to the previous year end because of the settlement of acquisition
related liabilities which was offset by the unwinding of discount. The
estimates around the contingent consideration are considered by management to
be an area of significant judgement, which could result in a material
adjustment to the value of these liabilities in future years (refer to note
9).
Cashflow
Cash inflows from operating activities increased to £5.6m for the 6 months to
31 July 2025 when compared to £4.6m for the 6 months to 31 July 2024, despite
a decrease in revenue performance in the period and settlements for
employment-linked acquisition payments of £21.2m (31 July 2024: £1.5m).
There was a significant improvement in working capital performance in the
period, with an inflow of £4.3m compared to an outflow of £31.9m in the
prior period. As well as a reduction in the tax related payments to £7.3m
which led to the overall increase in the cash inflows from operating
activities.
Current trading and outlook
Trading in the first couple of months of H2 FY26 is progressing as expected
with phasing of revenue and adjusted operating profit consistent with previous
years. The Group expects performance for the full year to be in line with
market expectations, supported by robust growth in high-potential markets such
as Digital Transformation, Retail Media, and data-driven services. Our focus
remains on portfolio simplification, margin discipline, and capital allocation
discipline. Cost efficiencies and ongoing efforts to streamline the business
will reinforce profitability in the second half.
NEXT 15 GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE SIX-MONTH PERIOD ENDED 31 July 2025
Six months Six months Twelve months
ended
ended
ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
Note £’000 £’000 £’000
Revenue 324,219 364,080 729,810
Direct costs (85,256) (77,297) (160,114)
Net revenue 2 238,963 286,783 569,696
Staff costs (180,719) (206,886) (411,854)
Depreciation (5,118) (6,191) (12,153)
Amortisation (8,945) (11,491) (21,948)
Other operating charges (38,107) (30,655) (67,113)
Total operating charges (232,889) (255,223) (513,068)
Operating profit 6,074 31,560 56,628
Movement in fair value of other financial liabilities 9 (1,183) 4,655 12,704
Finance expense 5 (2,481) (3,076) (7,569)
Finance income 6 416 253 689
Profit before income tax 2,826 33,392 62,452
Income tax expense 3 (3,844) (9,779) (21,482)
(Loss)/profit for the period (1,018) 23,613 40,970
Attributable to:
Owners of the parent (1,447) 22,136 39,465
Non-controlling interests 429 1,477 1,505
(1,018) 23,613 40,970
(Loss)/earnings per share
Basic (pence) 7 (1.4) 22.2 39.3
Diluted (pence) 7 (1.4) 21.1 37.9
NEXT 15 GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 July 2025
Six months Six months Twelve months
ended
ended
ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
£’000 £’000 £’000
(Loss)/profit for the period (1,018) 23,613 40,970
Other comprehensive (expense)/income:
Items that may be reclassified into profit or loss
Exchange differences on translating foreign operations (3,489) (720) 858
(3,489) (720) 858
Items that will not be reclassified subsequently to profit or loss
Revaluation of investments 240 125 134
Total other comprehensive (expense)/income for the period (3,249) (595) 992
Total comprehensive (expense)/income for the period (4,267) 23,018 41,962
Attributable to:
Owners of the parent (4,696) 21,541 40,457
Non-controlling interests 429 1,477 1,505
(4,267) 23,018 41,962
ADJUSTED RESULTS: KEY PERFORMANCE INDICATORS
Six months ended Six months ended
31 July 2025
31 July 2024
(Unaudited)
(Unaudited)
£’000
£’000
Net revenue 230,847 239,408
Total operating charges (191,131) (197,770)
Depreciation and amortisation (6,708) (7,439)
Operating profit 33,008 34,199
Interest on finance lease liabilities (323) (477)
Operating profit after interest on finance lease liabilities 32,685 33,722
Operating profit margin 14.2% 14.1%
Net finance expense (1,742) (2,346)
Profit before income tax 30,943 31,376
Tax (8,117) (8,016)
Profit after tax 22,826 23,360
Non-controlling interests (429) (1,477)
Earnings attributable to ordinary shareholders 22,397 21,883
Weighted average number of ordinary shares 100,924,813 99,847,610
Diluted weighted average number of ordinary shares 104,618,199 105,039,882
Adjusted earnings per share 22.2p 21.9p
Adjusted diluted earnings per share 21.4p 20.8p
Net cash inflow from operating activities 5,591 4,556
Cash outflow on acquisition related payments (26,161) (61,896)
Net debt (45,259) (74,769)
Dividend (per share) 4.75p 4.75p
Adjusted results have been presented to provide additional information that
may be useful to shareholders to understand the performance of the business by
facilitating comparability both year on year and with industry peers. Adjusted
results are reconciled to statutory results within the Appendix.
Per the detail in the Appendix (A2), charges for one-off employee incentive
schemes, employment linked acquisition payments, goodwill impairment,
intangibles write off, gain on disposal of subsidiaries, restructuring costs
and deal costs are adjusted for in calculating the adjusted operating charges
and amortisation of acquired intangibles is adjusted for in calculating the
adjusted depreciation and amortisation. Mach49 loss/profit along with the
legal and advisor costs are also adjusted for in calculating the adjusted
operating charges. Interest on lease liabilities, unwinding of discount and
change in estimate of future deferred and contingent consideration and share
purchase obligation payables are adjusted for in calculating net finance
expense. These measures are not considered to be adjusted performance measures
for the Group.
NEXT 15 GROUP PLC
CONSOLIDATED BALANCE SHEET AS AT 31 July 2025
31 July 2025 31 July 2024 31 January 2025
(Unaudited)
(Unaudited)
(Audited)
Note £’000 £’000 £’000
Assets
Property, plant and equipment 6,268 9,108 7,599
Right-of-use assets 12,746 21,030 16,150
Intangible assets 245,517 275,880 270,504
Investments in financial assets 1,445 706 861
Deferred tax asset 49,242 57,628 52,749
Other receivables 267 1,012 544
Total non-current assets 315,485 365,364 348,407
Trade and other receivables 166,477 193,001 163,008
Cash and cash equivalents 8 76,912 79,219 89,433
Corporation tax asset 5,837 1,176 4,114
Total current assets 249,226 273,396 256,555
Total assets 564,711 638,760 604,962
Liabilities
Loans and borrowings 8 72,804 104,789 65,939
Deferred tax liabilities 13,252 13,145 15,431
Lease liabilities 9,501 18,516 13,962
Other payables 106 208 113
Provisions 5,484 15,896 6,501
Contingent consideration 9 16,041 38,641 42,669
Additional contingent incentive 9 - 127 288
Deferred consideration 9 - - 474
Share purchase obligation 9 - 8,138 -
Total non-current liabilities 117,188 199,460 145,377
Overdraft 8 49,367 49,199 61,859
Trade and other payables 158,524 155,549 139,282
Lease liabilities 8,480 9,953 9,197
Provisions 5,414 6,254 25,933
Corporation tax liability 4,338 4,096 4,189
Contingent consideration 9 51,357 40,496 30,047
Additional contingent incentive 9 392 1,983 2,015
Deferred consideration 9 4,698 - 3,942
Share purchase obligation 9 912 1,856 1,929
Total current liabilities 283,482 269,386 278,393
Total liabilities 400,670 468,846 423,770
TOTAL NET ASSETS 164,041 169,914 181,192
Equity
Share capital 2,523 2,520 2,523
Share premium reserve 192,654 191,867 192,654
Foreign currency translation reserve 673 2,584 4,162
Other reserves (2,035) (2,035) (2,035)
Retained loss (29,248) (26,275) (15,633)
Total equity attributable to owners of the parent 164,567 168,661 181,671
Non-controlling interests (526) 1,253 (479)
TOTAL EQUITY 164,041 169,914 181,192
NEXT 15 GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 31 July 2025
Share premium reserve Foreign currency translation reserve Other reserves(1) Retained earnings Equity attributable to owners of the Company Non-controlling interests Total equity
Share capital
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 31 January 2024 (audited) 2,486 175,144 3,304 (2,050) (22,904) 155,980 241 156,221
Profit for the period - - - - 22,136 22,136 1,477 23,613
Other comprehensive (expense)/income for the period - - (720) - 125 (595) - (595)
Total comprehensive (expense)/income for the period - - (720) - 22,261 21,541 1,477 23,018
Shares issued on satisfaction of vested performance shares 25 7,215 - - (9,818) (2,578) - (2,578)
Shares issued on acquisitions 24 9,508 - - - 9,532 - 9,532
Acquisition of own shares (15) - - 15 (5,344) (5,344) - (5,344)
Movement in relation to share-based payments net of tax - - - - 425 425 - 425
Dividends to owners of the parent - - - - (10,664) (10,664) - (10,664)
Movement on reserves for non-controlling interests - - - - (231) (231) 231 -
Non-controlling interest dividend - - - - - - (696) (696)
At 31 July 2024 (unaudited) 2,520 191,867 2,584 (2,035) (26,275) 168,661 1,253 169,914
Profit for the period - - - - 17,329 17,329 28 17,357
Other comprehensive income for the period - - 1,578 - 9 1,587 - 1,587
Total comprehensive income for the period - - 1,578 - 17,338 18,916 28 18,944
Shares issued on satisfaction of vested performance shares 1 - - - (60) (59) - (59)
Shares issued on acquisitions 2 787 - - - 789 - 789
Movement in relation to share-based payments net of tax - - - - (3,378) (3,378) - (3,378)
Dividends to owners of the parent - - - - (4,793) (4,793) - (4,793)
Movement due to ESOP share purchases - - - (5) - (5) - (5)
Movement due to ESOP share option exercises - - - 5 - 5 - 5
Movement on reserves for non-controlling interests - - - - 138 138 (138) -
Non-controlling interest reversed in the period - - - - 1,397 1,397 (1,397) -
Non-controlling interest dividend - - - - - - (225) (225)
At 31 January 2025 (audited) 2,523 192,654 4,162 (2,035) (15,633) 181,671 (479) 181,192
(Loss)/profit for the period - - - - (1,447) (1,447) 429 (1,018)
Other comprehensive (expense)/income for the period - - (3,489) - 240 (3,249) - (3,249)
Total comprehensive (expense)/income for the period - - (3,489) - (1,207) (4,696) 429 (4,267)
Shares issued on satisfaction of vested performance shares - - - - (1,979) (1,979) - (1,979)
Movement in relation to share-based payments net of tax - - - - 430 430 - 430
Dividends to owners of the parent - - - - (10,698) (10,698) - (10,698)
Movement on reserves for non-controlling interests - - - - (245) (245) 245 -
Non-controlling interest reversed in the period - - - - 84 84 (84) -
Non-controlling interest dividend - - - - - - (637) (637)
At 31 July 2025 (unaudited) 2,523 192,654 673 (2,035) (29,248) 164,567 (526) 164,041
(1 )Other reserves include ESOP reserve, hedging reserve, share purchase
reserve and merger reserve.
NEXT 15 GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE SIX MONTH PERIOD ENDED 31 July 2025
Six months ended Six months ended Twelve months ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
£’000 £’000 £’000
Cash flows from operating activities
(Loss)/profit for the period (1,018) 23,613 40,970
Adjustments for:
Depreciation 5,118 6,191 12,153
Amortisation 8,945 11,491 21,948
Movement in fair value of other financial liabilities 1,183 (4,655) (12,704)
Finance expense 2,481 3,076 7,569
Finance income (416) (253) (689)
Impairment of intangibles 10,044 - 4,409
Loss on sale of property, plant and equipment 5 45 409
Gain on disposal of subsidiaries (4,108) - -
Gain on exit of finance lease - - 628
Income tax expense 3,844 9,779 21,482
Employment linked acquisition provision charge 3,388 2,399 9,498
Settlement of employment linked acquisition payments (21,219) (1,475) (1,655)
Share-based payment charges 302 1,291 759
Settlement of share-based payment in cash - (1,683) (1,683)
Net cash inflow from operating activities before changes in working capital 8,549 49,819 103,094
Change in trade and other receivables (10,294) (22,493) 10,060
Change in trade and other payables 14,666 (9,273) (16,555)
Change in other liabilities (72) (161) (464)
4,300 (31,927) (6,959)
Net cash generated from operations before tax and interest outflows 12,849 17,892 96,135
Income taxes paid (7,258) (13,336) (20,668)
Net cash inflow from operating activities 5,591 4,556 75,467
Cash flows from investing activities
Acquisition of subsidiaries and trade and assets, net of cash acquired - (5,031) (6,884)
Acquisition of investments in financial assets (378) - (479)
Acquisition of property, plant and equipment (848) (1,350) (2,197)
Proceeds on disposal of investments in financial assets - - 335
Disposal of subsidiaries, net of cash disposed 1,696 - -
Proceeds on disposal of property, plant and equipment 5 5 29
Acquisition of intangible assets (3,076) (2,078) (5,021)
Net movement in long-term cash deposits 131 114 304
Income from finance lease receivables 529 519 1,019
Interest received 378 208 602
Net cash outflow from investing activities (1,563) (7,613) (12,292)
NEXT 15 GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOW (Continued)
FOR THE SIX MONTH PERIOD ENDED 31 July 2025
Six months ended Six months ended Twelve months ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
£’000 £’000 £’000
Cash flows from financing activities
Payment of contingent consideration (4,942) (55,390) (59,969)
Acquisition of own shares - (5,344) (5,344)
Capital element of finance lease rental payment (4,866) (5,622) (11,260)
Increase in bank borrowings and overdrafts 91,885 116,293 184,025
Repayment of bank borrowings and overdrafts (82,682) (55,793) (162,834)
Interest paid (2,159) (2,599) (6,690)
Dividend and profit share paid to non-controlling interest partners (638) (696) (921)
Dividends paid to shareholders of the parent - - (15,457)
Net cash outflow from financing activities (3,402) (9,151) (78,450)
Net decrease in cash and cash equivalents 626 (12,208) (15,275)
Cash and cash equivalents including overdraft at beginning of the period 27,574 42,871 42,871
Exchange loss on cash held (655) (643) (22)
Cash and cash equivalents including overdraft at end of the period 27,545 30,020 27,574
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 July 2025
1) BASIS OF PREPARATION
The unaudited consolidated interim financial statements represent a condensed
set of financial information and have been prepared using the recognition and
measurement principles of International Accounting Standards, and in
accordance with IAS 34, Interim Financial Reporting. The principal accounting
policies used in preparing the results are those the Group has applied in its
financial statements for the year ended 31 January 2025.
The comparative financial information for the year ended 31 January 2025 has
been derived from the audited statutory financial statements for that period.
A copy of those statutory financial statements has been delivered to the
Registrar of Companies. The auditor’s report on those accounts was
unqualified, did not include references to any matters to which the auditors
drew attention by way of emphasis without qualifying their report and did not
contain a statement under section 498(2)-(3) of the Companies Act 2006.
2) SEGMENT INFORMATION
Measurement of operating segment profit
The Board of Directors assesses the performance of the operating segments
based on a measure of adjusted operating profit before intercompany recharges,
which reflects the internal reporting measure used by the Board of Directors.
This measurement basis excludes the effects of certain acquisition-related
costs and goodwill impairment charges. Other information provided to them is
measured in a manner consistent with that in the financial statements. Head
office costs relate to Group costs before allocation of intercompany charges
to the operating segments. Intersegment transactions have not been separately
disclosed as they are not material. The Board of Directors does not review the
assets and liabilities of the Group on a segmental basis and therefore this is
not separately disclosed.
Customer Engage Customer Delivery Customer Insight Business Transformation £’000 Head Office Total (excl M49) Mach49 Total (incl M49)
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Six months ended 31 July 2025 (Unaudited)
Net revenue 115,974 53,625 25,769 35,479 - 230,847 8,116 238,963
Adjusted operating profit/(loss) 23,362 9,423 3,120 4,241 (7,461) 32,685 (2,946) 29,739
Adjusted operating profit margin(1) 20.1% 17.6% 12.1% 12.0% - 14.2% (36.3)% 12.4%
Organic net revenue (decline)/growth (9.6)% (8.3)% (6.4)% 31.2% - (5.3)% (82.5)% (18.0)%
Six months ended 31 July 2024 (Unaudited)
Net revenue 134,368 54,966 27,892 22,182 - 239,408 47,375 286,783
Adjusted operating profit/(loss) 26,636 11,998 3,081 2,139 (10,132) 33,722 14,368 48,090
Adjusted operating profit margin(1) 19.8% 21.8% 11.0% 9.6% - 14.1% 30.3% 16.8%
Organic net revenue (decline)/growth (1.0)% 6.9% (6.8)% (29.1)% - (3.4)% 4.1% (2.2)%
Twelve months ended 31 January 2025 (Audited)
Net revenue 262,001 109,599 55,404 52,147 - 479,151 90,545 569,696
Adjusted operating profit/(loss) 53,854 23,857 7,009 6,601 (17,319) 74,002 33,444 107,446
Adjusted operating profit margin(1) 20.6% 21.8% 12.7% 12.7% - 15.4% 36.9% 18.9%
Organic net revenue (decline)/growth (2.4)% 2.7% (9.5)% (19.1)% - (4.0)% (3.8)% (4.0)%
(1) Adjusted operating profit margin is calculated based on the operating
profit as a percentage of net revenue.
NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2025
2) SEGMENT INFORMATION (continued)
UK EMEA US Asia Pacific Head Office Total (excl M49) Mach49 Total (incl M49)
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Six months ended 31 July 2025 (Unaudited)
Net revenue 129,589 5,920 87,924 7,414 - 230,847 8,116 238,963
Adjusted operating profit/(loss) 19,840 955 18,637 714 (7,461) 32,685 (2,946) 29,739
Adjusted operating profit margin(1) 15.3% 16.1% 21.2% 9.6% - 14.2% (36.3)% 12.4%
Organic revenue (decline)/growth (2.3)% 1.6% (9.3)% (5.2)% - (5.3)% (82.5)% (18.0)%
Six months ended 31 July 2024 (Unaudited)
Net revenue 124,519 5,835 100,888 8,166 - 239,408 47,375 286,783
Adjusted operating profit/(loss) 19,943 1,231 21,724 956 (10,132) 33,722 14,368 48,090
Adjusted operating profit margin(1) 16.0% 21.1% 21.5% 11.7% - 14.1% 30.3% 16.8%
Organic revenue growth/(decline) (4.9)% (3.4)% (1.8)% (0.1)% - (3.4)% 4.1% (2.2)%
Twelve months ended 31 January 2025 (Audited)
Net revenue 254,406 12,037 196,731 15,977 - 479,151 90,545 569,696
Adjusted operating profit/(loss) 42,126 2,549 44,628 2,018 (17,319) 74,002 33,444 107,446
Adjusted operating profit margin¹ 16.6% 21.2% 22.7% 12.6% - 15.4% 36.9% 18.9%
Organic revenue decline (4.2)% (0.3)% (3.7)% (6.6)% - (4.0)% (3.8)% (4.0)%
(1) Adjusted operating profit margin is calculated based on the operating
profit as a percentage of net revenue.
3) TAXATION
The tax charge on adjusted profit for the six months ended 31 July 2025 is
£8,117,000 (six months ended 31 July 2024 of £8,016,000), equating to an
adjusted effective tax rate of 26.2%, compared to 25.5% in the prior period.
The statutory tax charge for the six months ended 31 July 2025 is £3,844,000
(six months ended 31 July 2024 of £9,779,000), equating to an effective tax
rate of 136.0%, compared to 29.3% in the prior period.
The Group’s adjusted corporation tax rate is expected to remain higher than
the standard UK rate (25% effective 1 April 2023) due to differing rates of
tax suffered on overseas profits. The Group does not currently anticipate any
material changes to its adjusted effective tax rate for the year ending 31
January 2026. The Group’s future adjusted tax rate is inherently subject to
a degree of uncertainty. This is due to the Group’s geographical split of
profit across the globe paired with ever changing international tax policy.
4) DIVIDENDS
An interim dividend of 4.75p (six months ended 31 July 2024: 4.75p) per
ordinary share will be paid on 21 November 2025 to shareholders listed on the
register of members on 17 October 2025. Shares will go ex-dividend on 16
October 2025. The last date for DRIP elections to be returned to the registrar
is 31 October 2025.
NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2025
5) FINANCE EXPENSE
Six months ended Six months ended Twelve months ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
£’000 £’000 £’000
Financial liabilities at amortised cost
Bank interest payable 2,152 2,336 6,495
Interest on lease liabilities(1) 323 477 879
Other
Other interest payable 6 263 195
Finance expense 2,481 3,076 7,569
(1)These items are adjusted for in calculating the adjusted net finance
expense.
6) FINANCE INCOME
Six months ended Six months ended Twelve months ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
£’000 £’000 £’000
Financial assets at amortised cost
Bank interest receivable 295 199 585
Finance lease interest receivable 39 45 87
Other
Other interest receivable 82 9 17
Finance income 416 253 689
7) EARNINGS PER SHARE
Six months ended Six months ended Twelve months ended
31 July 2025 (Unaudited)
31 July 2024 (Unaudited)
31 January 2025
(Audited)
£’000 £’000 £’000
(Loss)/profit attributable to ordinary shareholders (1,447) 22,136 39,465
Number Number Number
Weighted average number of ordinary shares 100,924,813 99,847,610 100,379,867
Dilutive LTIP & Options shares 890,522 1,728,473 1,036,086
Dilutive Growth Deal shares 2,135,482 2,404,317 2,198,485
Other potentially issuable shares 667,382 1,059,482 537,069
Diluted weighted average number of ordinary shares 104,618,199 105,039,882 104,151,507
Basic (loss)/earnings per share (1.4)p 22.2p 39.3p
Diluted (loss)/earnings per share (1.4)p 21.1p 37.9p
NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2025
8) NET DEBT
At 31 July 2025, the Group had a £175m revolving credit facility (“RCF”)
with a consortium of 5 banks, and as part of the arrangement, the Group has an
additional £25m accordion option. The facility is available until December
2027 with an option to extend for a further year.
The RCF facility is available for permitted acquisitions and working capital
requirements. It is due to be repaid from the trading cash flows of the Group.
The facility is available in a combination of sterling, US dollar and Euro.
The margin payable on each facility is dependent upon the level of gearing in
the business. The Group also has a US facility of $7m (2024: $7m) which is
available for property rental guarantees and US-based working capital needs.
31 July 2025 31 July 2024 (Unaudited) 31 January 2025
(Unaudited)
(Audited)
£’000 £’000 £’000
Total loans and borrowings and overdraft 122,171 153,988 127,798
Less: cash and cash equivalents (76,912) (79,219) (89,433)
Net debt excluding lease liabilities 45,259 74,769 38,365
Share purchase obligation 912 9,994 1,929
Deferred consideration 4,698 - 4,416
Contingent consideration 67,398 79,137 72,716
Additional contingent incentive 392 2,110 2,303
Net debt and acquisition related liabilities 118,659 166,010 119,729
9) OTHER FINANCIAL LIABILITIES
Deferred consideration Contingent consideration Additional contingent incentive Share purchase obligation
£’000 £’000 £’000 £’000
At 31 January 2024 (Audited) - 146,752 4,330 9,603
Change in estimate - (14,524) (24) (240)
Exchange differences - (1,307) (41) (14)
Utilised - (61,053) (2,374) -
Unwinding of discount - 9,269 219 645
At 31 July 2024 (Unaudited) - 79,137 2,110 9,994
Reclassification 4,279 1,453 - (5,732)
Change in estimate - (15,167) (14) 814
Exchange differences - 2,603 156 60
Utilised - (961) (80) (3,606)
Unwinding of discount 137 5,651 131 399
At 31 January 2025 (Audited) 4,416 72,716 2,303 1,929
Change in estimate (13) (2,896) (9) (1,017)
Exchange differences - (3,952) (140) (113)
Utilised - (3,094) (1,848) -
Unwinding of discount 295 4,624 86 113
At 31 July 2025 (Unaudited) 4,698 67,398 392 912
Current 4,698 51,357 392 912
Non-current - 16,041 - -
NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2025
9) OTHER FINANCIAL LIABILITIES (Continued)
The estimates around contingent consideration and share purchase obligations
are considered by management to be an area of significant judgement, with any
changes in assumptions and forecasts creating volatility in the income
statement. Management estimates the fair value of these liabilities taking
into account expectations of future payments. During the first half of the
year, earn-out liabilities decreased by a net £8.0m, primarily driven by the
amounts settled within the period, the change in estimate and exchange
differences offset against the unwinding of the discount rate used.
Changes in the estimates of contingent consideration payable are recognised in
the movement in fair value of other financial liabilities. If the judgements
around future revenue growth, profit margins and discount rates change, this
could result in a material adjustment to the value of these liabilities within
the next financial year. Estimations are also included for other uncertainties
deriving from the purchase agreements, which are subject to final negotiations
which ultimately determine the future payments. An increase in the liability
would result in an increase in net finance income/expense, while a decrease
would result in a further gain.
Litigation and contingent liabilities
As announced on 25 June 2025, the Group became aware of potential serious
misconduct concerning the Mach49 business which has been reported to the
relevant law enforcement agencies. As a result, no further payments has been
made to Mach49’s selling shareholder under the earnout agreement in
connection with Next15’s acquisition of Mach49.
Arbitration proceedings with the former members of Mach49 in relation to
claims primarily regarding the remaining earnout payments are in the early
stages. Until such time as these proceedings are finally concluded, the Group
considers that the earnout liability, disclosed elsewhere in this note, has
not yet met the criteria for de-recognition under IFRS 9 Financial
Instruments. An outcome is expected within the next 12 months.
Based on the evidence to date, the Group maintains its position regarding the
non-payment of the remaining earnout and has determined that no outflow in
excess of the earnout liability currently recognised is probable for the
related claims and therefore no provision has been recognised in relation to
these additional claims. The Group has also counterclaimed for previously paid
earnout payments.
The Group continues to fully cooperate with law enforcement agencies, and at
this early stage, there is significant uncertainty in relation to the outcome
of any potential steps taken by law enforcement agencies.
APPENDIX – ALTERNATIVE PERFORMANCE MEASURES
FOR THE SIX MONTHS ENDED 31 JULY 2025
Introduction
In the reporting of financial information, the Directors have adopted various
alternative performance measures (‘APMs’). The Group includes these
non-GAAP measures as they consider these measures to be both useful and
necessary to the readers of the financial statements to help understand the
performance of the Group. The Group’s measures may not be calculated in the
same way as similarly titled measures reported by other companies and
therefore should be considered in addition to IFRS measures.
Purpose
The Director’s believe that these APMs are highly relevant as they reflect
how the Board measures the performance of the business and align with how
shareholders value the business. They also allow understandable like-for-like,
year on year comparisons and more closely correlate with the cash inflows from
operations and working capital position of the Group.
They are used by the Group for internal performance analyses and the
presentation of these measures facilitates better comparability with other
industry peers as they adjust for non-recurring or uncontrollable factors
which materially affect IFRS measures.
A1: RECONCILIATION OF STATUTORY OPERATING PROFIT TO ADJUSTED OPERATING PROFIT
A reconciliation of statutory operating profit to adjusted operating profit is
provided as follows:
Six months ended Six months ended Twelve months ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
£’000 £’000 £’000
Statutory operating profit 6,074 31,560 56,628
Interest on finance lease liabilities (323) (477) (879)
Statutory operating profit after interest on finance lease liabilities 5,751 31,083 55,749
Charge for one-off employee incentive schemes (A2) - - 175
Employment linked acquisition payments (A2) 3,388 2,399 9,498
Property impairment (A2) - - 612
Goodwill impairment (A2) 9,144 - 3,000
Costs associated with operational restructuring (A2) 1,910 4,195 16,966
Deal costs (A2) 1,008 170 600
Intangibles write off (A2) 900 - 1,409
Amortisation of acquired intangibles (A2) 7,355 10,243 19,437
Gain on disposal of subsidiaries (A2) (4,108) - -
Legal and advisor costs associated with Mach49 (A2) 4,391 - -
Previously reported adjusted operating profit 29,739 48,090 107,446
Mach49 trading loss/(profit) (A2) 2,946 (14,368) (33,444)
Adjusted operating profit 32,685 33,722 74,002
APPENDIX – ALTERNATIVE PERFORMANCE MEASURES (Continued)
FOR THE SIX MONTHS ENDED 31 JULY 2025
A2: RECONCILIATION OF STATUTORY PROFIT BEFORE TAX TO ADJUSTED PROFIT BEFORE
TAX
Six months ended Six months Twelve months ended
31 July 2025
ended
31 January 2025
(Unaudited)
31 July 2024
(Audited)
(Unaudited)
£’000 £’000 £’000
Statutory profit before income tax 2,826 33,392 62,452
Unwinding of discount on deferred and contingent consideration and share 5,118 10,133 16,451
purchase obligation payable(1)
Change in estimate of future deferred and contingent consideration and share (3,935) (14,788) (29,155)
purchase obligation payable(1)
Charge for one-off employee incentive scheme( 2) - - 175
Employment linked acquisition payments( 3) 3,388 2,399 9,498
Costs associated with operational restructuring( 4) 1,910 4,195 16,966
Deal costs(5) 1,008 170 600
Property impairment(6) - - 612
Amortisation of acquired intangibles(7) 7,355 10,243 19,437
Intangibles write off(8) 900 - 1,409
Goodwill impairment(9) 9,144 - 3,000
Gain on disposal of subsidiaries(10) (4,108) - -
Legal and advisor costs associated with Mach49(11) 4,391 - -
Previously reported adjusted profit before income tax 27,997 45,744 101,445
Mach49 trading loss/(profit)(12) 2,946 (14,368) (33,444)
Adjusted profit before income tax 30,943 31,376 68,001
(1 )The Group adjusts for the remeasurement of the acquisition-related
liabilities within the adjusted performance measures in order to aid
comparability of the Group’s results year on year as the charge/credit from
remeasurement can vary significantly depending on the underlying brand’s
performance. It is non-cash and its directional impact to the income statement
is opposite to the brand’s performance driving the valuations. The unwinding
of discount on these liabilities is also excluded from underlying performance
on the basis that it is non-cash and the balance is driven by the Group’s
assessment of the time value of money and this exclusion ensures
comparability.
(2 )The charge in the prior year relates to transactions whereby a restricted
grant of brand equity was given to key management in MHP Group Limited at nil
cost which holds value in the form of access to future profit distributions as
well as any future sale value under the performance-related mechanism set out
in the share sale agreement. This value is recognised as a one-off charge in
the income statement in the year of grant as the agreements do not include
service requirements, thus the cost accounting is not aligned with the timing
of the anticipated benefit of the incentive, namely the growth of the relevant
brands.
(3 )This charge relates to payments linked to the continuing employment of the
sellers which is being recognised over the required period of employment.
Although these costs are not exceptional or non-recurring, the Group
determined they should be excluded from the underlying performance as the
costs solely relate to acquiring the business. The sellers of the business are
typically paid market salaries and bonuses in addition to these
acquisition-related payments and therefore the Group determines these costs
solely relate to acquiring the business. Adjusting for these within the
Group’s adjusted performance measures gives a better reflection of the
Group’s profitability and enhances comparability year on year.
(4 )In the current year the Group has incurred restructuring costs, of which
£1.7m related to staff redundancies as the Group is pro-actively reducing its
cost base to take account of the weakness in demand from tech clients and
anticipated efficiencies. Only costs that relate to roles permanently being
eliminated from the business with no intention to replace are adjusted for.
APPENDIX – ALTERNATIVE PERFORMANCE MEASURES (Continued)
FOR THE SIX MONTHS ENDED 31 JULY 2025
A2: RECONCILIATION OF ADJUSTED RESULTS (Continued)
The remaining £0.2m costs relate to the reorganization and integration of a
number of businesses across the Group. In both years, the costs do not relate
to underlying trading of the relevant brands and have been added back to aid
comparability of performance year on year.
(5 )These costs are directly attributable to business combinations and
divestments made during the year, as well as aborted divestments, acquisitions
and other structural reorganisations of the Group. The charges are excluded
from performance as they would not have been incurred had the business not
explored these structural changes and a higher or lower spend has no relation
on the organic business. They do not relate to the trading of the Group and
are added back each year to aid comparability of the Group’s profitability
year on year.
(6 )In the prior year the Group recognised charges relating to the
reorganization of the property space across the Group. The majority of the
charge is impairment of right-of-use assets which were linked to office spaces
associated with the significant contract that was lost during the prior year.
The Group adjusted for this cost, as the additional one-off impairment charge
did not relate to the underlying trading of the business and therefore added
back to aid comparability.
(7 )In line with its peer group, the Group adds back amortisation of acquired
intangibles. Judgement is applied in the allocation of the purchase price
between intangibles and goodwill, and in determining the useful economic lives
of the acquired intangibles. The judgements made by the Group are inevitably
different to those made by our peers and as such amortisation of acquired
intangibles been added back to aid comparability.
(8 )In the current year the Group has recognised a charge to write off the
brand name associated with the Mach49 business. The Group has initiated the
process to permanently cease operations of Mach49 LLC and its associated
entities and anticipates that Mach49 will cease operations prior to the end of
the FY26 financial year. The brand name associated with Mach49 is no longer
generating any future economic benefit and has been written off. The Group
adjusted for this cost, as the charge was one-off and doesn’t relate to the
underlying trading of the business and therefore added back to aid
comparability Group’s profitability year on year.
(9 )In the current year, the Group has initiated the process to permanently
cease operations of Mach49 LLC and its associated entities and has recognised
an impairment charge of £9.1m to fully impair the carrying value of goodwill
relating to Mach49. The Group adjusted for this cost, as the charge was
one-off not relating to the underlying trading of the business and therefore
added back to aid comparability Group’s profitability year on year.
(10 )In the current year progress has been made in simplifying the Group which
has included the disposals of Palladium and Beyond. The Group has recognised
an overall gain on disposals of £4.1m on consideration of £6.3m. These do
not relate to underlying trading, and the respective gain/loss would not have
been recognised had the disposal not occurred. For that reason, the Group add
these costs back in calculating our adjusted profit numbers to give a better
indication of underlying trading profitability and to enable comparability
year on year.
(11 )The Group has incurred legal and advisor fees totalling £4.4m in the
first half of FY26, as a result of the work done earlier in the year relating
to the potential serious misconduct, the arbitration proceedings and the wind
down of Mach49. Due to the one-off nature of these costs, the Group add these
costs back in calculating our adjusted profit numbers to give a better
indication of underlying trading profitability and to enable comparability
year on year.
(12) The Group expects Mach49 to be reported as a discontinued operation for
full year reporting for year ending 31 January 2026. As a discontinued
operation, Mach49’s results will be presented as a single line item and
separate from the Group’s continuing operations in the income statement. On
this basis, the £2.9m trading loss in FY26 H1 has been adjusted for at the
half year.
Adjusted profit before income tax has been presented to provide additional
information which may be useful to the reader. Adjusted earnings to ordinary
shareholders is a measure of performance used in the calculation of the
adjusted earnings per share. This measure is considered an important indicator
of the performance of the business and so it is used for the vesting of
employee performance shares.
APPENDIX – ALTERNATIVE PERFORMANCE MEASURES (Continued)
FOR THE SIX MONTHS ENDED 31 JULY 2025
A3: RECONCILIATION OF ADJUSTED TAX EXPENSE
Six months ended Six months ended
31 July 2025
31 July 2024
(Unaudited)
(Unaudited)
£’000 £’000
Income tax expense reported in the Consolidated Income Statement 3,844 9,779
Add back tax on adjusting items:
Costs associated with operational restructuring 493 1,045
Unwinding of discount and change in estimates of future deferred and 142 (966)
contingent consideration and share purchase obligation payable
Amortisation of acquired intangibles 2,010 2,572
Legal and advisor costs associated with Mach49 918 -
Previously reported adjusted tax expense 7,407 12,430
Mach49 tax credit/(expense) 710 (4,414)
Adjusted tax expense 8,117 8,016
Adjusted profit before income tax 30,943 31,376
Adjusted effective tax rate 26.2% 25.5%
A4: RECONCILIATION OF ADJUSTED EARNINGS PER SHARE
Six months ended Six months ended Twelve months ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
£’000 £’000 £’000
(Loss)/profit attributable to ordinary shareholders (1,447) 22,136 39,465
Unwinding of discount on future deferred and contingent consideration and 5,118 10,133 16,451
share purchase obligation payable
Change in estimate of future deferred and contingent consideration and share (3,935) (14,788) (29,155)
purchase obligation payable
Charge for one-off employee incentive scheme - - 175
Costs associated with operational restructuring 1,910 4,195 16,966
Property impairment - - 612
Gain on disposal of subsidiaries (4,108) - -
Amortisation of acquired intangibles 7,355 10,243 19,437
Intangibles write off 900 - 1,409
Goodwill impairment 9,144 - 3,000
Employment linked acquisition payments 3,388 2,399 9,498
Deal costs 1,008 170 600
Legal and advisor costs associated with Mach49 4,391 - -
Tax effect of adjusting items above (3,563) (2,651) (6,313)
Previously reported adjusted earnings attributable to ordinary shareholders 20,161 31,837 72,145
Mach49 trading loss/(profit) 2,946 (14,368) (33,444)
Mach49 tax (credit)/expense (710) 4,414 11,041
Adjusted earnings attributable to ordinary shareholders 22,397 21,883 49,742
APPENDIX – ALTERNATIVE PERFORMANCE MEASURES (Continued)
FOR THE SIX MONTHS ENDED 31 JULY 2025
A4: RECONCILIATION OF ADJUSTED EARNINGS PER SHARE (Continued)
Six months ended Six months ended Twelve months ended
31 July 2025
31 July 2024
31 January 2025
(Unaudited)
(Unaudited)
(Audited)
Number Number Number
Weighted average number of ordinary shares 100,924,813 99,847,610 100,379,867
Dilutive LTIP & Options shares 890,522 1,728,473 1,036,086
Dilutive Growth Deal shares 2,135,482 2,404,317 2,198,485
Other potentially issuable shares 667,382 1,059,482 537,069
Diluted weighted average number of ordinary shares 104,618,199 105,039,882 104,151,507
Adjusted earnings per share 22.2p 21.9p 49.6p
Diluted adjusted earnings per share 21.4p 20.8p 47.8p
Adjusted and diluted adjusted earnings per share have been presented to
provide additional information which may be useful to shareholders to
understand the performance of the business by facilitating comparability both
year on year and with industry peers. The adjusted earnings per share is the
performance measure used for the vesting of employee performance shares.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20250929902899/en/
(https://www.businesswire.com/news/home/20250929902899/en/)
Next 15 Group plc
Copyright Business Wire 2025Recent news on Next 15
See all newsREG-Next 15 Group plc Total Voting Rights
AnnouncementREG-Next 15 Group plc Directorate change
AnnouncementREG-Next 15 Group plc Half-year Report
AnnouncementREG-Next 15 Group plc Notice of Results
AnnouncementREG-Next 15 Group plc Holding(s) in Company
Announcement