No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Shares of Next 15 slid on Thursday after it reported a dip in first-half profit and revenue, albeit in line with expectations.
In the six months to the end of July, adjusted pre-tax profit fell 2.3% to £30.2m on revenue of £214.9m, down 6.9% on the same period a year earlier. Adjusted operating profit ticked down 1.8% to £32.1m.
Next 15 said its performance was in line with expectations despite a challenging macro environment.
Chief executive Sam Knights said: "The first half of FY27 demonstrates our strategy has taken hold. Momentum has continued to build through the period, with the group returning to organic growth for three consecutive months (June 26 - August 26) for the first time in three years.
"We have continued to act decisively. The portfolio continues to be rationalised, the cost base is materially lower and the 'unified, not uniform' operating model is working as evidenced by increasing margins, with our businesses increasingly winning together.
"We are repositioning Next 15 as a more focused, data and AI-led growth platform, with increasing integration across our core businesses and early commercial applications already delivering client impact."
At 1450 BST, the shares were down 10.4% at 295.58p.
Broker Panmure Liberum sad Next 15 has made overall progress in the first half. "There are pressures across areas of the portfolio (retail media, market research); but these are pressures shared with peers in a difficult macro environment, and offset entirely by the strength in its DX business, which grew 27%," it said.
"The strength in its marketing and communications agencies was entirely unexpected and we now forecast growth in H2 for that division. The disposals programme was progressed and saw Next 15 exit its last full creative agency, Elvis.
"In a difficult environment, we still forecast underlying growth of circa 2% on a continuing basis. We hold our EBIT forecast steady for 2027, although we trim 2028 by c4%. The Mach49 overhang continues to weigh on the stock, but should be resolved soon; we believe at this valuation the stock is arguably pricing in a negative outcome and a resolution - either way - could be the catalyst that focuses the market on NFG's reshaped growth potential."
Panmure cut its price target to 440p from 486p but reiterated a 'buy' rating.