LONDON — Next 15’s organic revenues have grown by 4% to £49m in the first half of 2014, after a disappointing 2013 in which the UK-based holding company faced a number of challenges.
In the first half of 2014, its pretax profits are also up 13% to £5.1, largely due to a slew of new account wins including Amazon, Google, Airbnb, Next, Mastercard, Salesforce and Blackboard. Next 15’s average client spend has increased 6% in the first half of 2014 with 27 of its clients generating more than $500,000.
The US continues to be a key driver in its growth with the region showing 13% organic growth and now accounting for 57% of Next 15’s revenues and 39% its global workforce. The firm’s US revenue per head is now more than three times that for Asia-Pac, which had 3% organic growth in H1 2014. CEO Tim Dyson says he expects modest growth in the UK in 2014, meanwhile, EMEA is down 10% mainly due to financial irregularities at Bite Germany that he expects will be resolved this financial year.
Currently, the UK makes up 20% of revenues, followed by 13% in Asia-Pac and 10% in EMEA.
“We’re not massively focused on growth in other regions - we're more focused on taking on the right business and modernizing the products,” Dyson said. “The US has been fueled by a modernization of product and the quality of its customer base. In some of the other regions, we haven’t had great economies to work with, but equally, we do need to modernize the product to grow.”
By “modernizing the product” Dyson is referring to pure digital and hybrid services, which now account for 50% of Next 15’s global revenues. The pure digital category consists of briefs that are solved by technology solutions, like digital builds, whereas in hybrid services, digital is starting the point but is supported by owned or earned media services.
This year, Next 15 plans to expand its UK-based insight services firm agent3 to the US, as well as put more people on the ground in the US around its recent acquisition of content marketing shop Republic Publishing and the pure-play digital firm BiteDA.
Among Next 15’s 12 agencies, Text 100, M Booth, Beyond and Blue Shirt showed the strongest growth. Bite — which has faced a slew of leadership woes recently — remained stagnant and the OutCast Agency saw modest growth.
“We’re working towards a process with Bite being selective about the people and clients that we take on,” Dyson said. Last year, Sean Mills rejoined the firm to helm its North American leadership.
In the first half of 2014, UK-based holding company also made significant changes to its financial management after dealing with number of issues on that front. Last month, Next 15 formalized Peter Harris as its new CFO, taking over the role that David Dewhurst held. The holding company has also put new finance teams in place for Bite UK and EMEA and made key hires around treasury, procurement and internal auditing. It plans to roll out a new finance system this fall.