Next Fifteen Communications Group brought added cheer to shares in the marketing sector today as its share price reached 455p, marking a 21.3% rise in the latest month to 12 April and a 76.4% rise over the past year. The sector’s MSFI Index recorded a more modest 2.84% rise in the month to 76.9 (Jan 2001 = 100). Even so that rise was well ahead of the FTSE All-Share Index which could manage only 0.54%.
Next Fifteen has been focussing both on building its revenue and on improving its operating efficiency after several years of disappointing results. Revenue grew by 32% in the year to 31 January 2017 and the operating profit margin improved. Nevertheless, 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% (see Acquisition related charges take shine off Next Fifteen’s 32% growth).
As we shall see, Next Fifteen was not the only company with a shining share performance. Three other shares increased in value by more than 10% in the month: Ebiquity shares rose by 20.5%, Crossrider shares rose by 15.9% and Huntsworth shares rose by 10.1%.
Ebiquity’s shares responded to news last month that its post-tax profits had grown by 68%, helped by a £4.5 million revenue boost from favourable currency movements (see Ebiquity’s profits rise with help of £4.5m favourable currency movements).
There were less obvious grounds for joy at Crossrider after it reported another big loss, but perhaps investors were relieved that it has ceased any further investment in web applications and refocussed on becoming a distributor of applications and products (see Crossrider loses £10.7m after app retrenchment and Definiti write-down).
As for Huntsworth, one can only assume that investors are hoping that the recurring impairment charges are drawing to a close and that the Grayling network is stabilising (see Huntsworth hit by another £30m Grayling write down). Huntsworth Health is now said to be the group’s largest division by both revenue and profit.
Eight companies saw their shares decline in value during the month. The worst cases were at Porta Communications (down 13.3%) and at Reach4Entertainment Enterprises (down 12.9%).