Print Published 4th Apr 2017, 17:23

Acquisition related charges take shine off Next Fifteen’s 32% growth

AIM listed Next Fifteen Communications Group increased its revenue by 31.8% in the year to 31 January 2017, but a 36.7% increase in staff costs and an £8.4 million charge for share incentive schemes held back the operating profit growth to 18.8%.  The outcome was an operating profit of £10 million before acquisition payments compared with £8.4 million in the previous year.

However, accounting rules require certain acquisition payments to be charged against income and these reduced profits further.

If the share incentive charge, amortisation and various abnormal items were to be excluded, the operating profit for the year would have been £25 million, a very healthy improvement on the £16.5 million achieved in the previous year (see table).   That adjusted profit represented a margin of 14.6% on revenue, up from 12.7% in the previous year.