Next 15 shares halve as major clients walks

6th Sep 2024 08:03

(Sharecast News) - Shares in public relations firm Next 15 nosedived early on Friday following the announcement that one of its biggest clients would not be renewing its contract.

Next 15 said revenue in its venture building division Mach49 would be roughly £80.0m lower in FY26 after the client opted not to renew its agreement after its initial three-year term and, as a result, the company lowered its forward guidance.

The London-listed group also posted a 2.5% increase in revenues to £577.8m, largely due to acquisition-linked growth, and a 6.1% jump in adjusted operating profits to £121.1m. Underlying operating profit margins also improved, rising 80 basis points to 21%.

"While the group has seen strong performances from a number of its consumer-facing businesses, it has continued to see an ongoing weakness in spend from its technology customers as well as a reduction in revenues from its public sector clients," said Next 15.

"As a result of these factors and the contract ending which will impact the last month of the fiscal year, the board now believes FY25 revenue will be lower than planned, and profits to be materially below management expectations."

As of 0950 BST, Next 15 shares had sunk 50.72% to 408.0p.

Reporting by Iain Gilbert at Sharecast.com