Arun Sudhaman 29 Jan 2015 // 8:35AM GMT
LONDON—Next 15 is to raise £4.3m by selling new shares, in order to fund three acquisitions in the UK over the next six months.
The holding group, which owns Text 100 and Bite, also reported that results for the 12 months to the end of January 2015 are expected to "exceed the top end of market expectations."
In particular, Next 15 CEO Tim Dyson pointed to a strong performance in the US, where the group's firms delivered double-digit revenue growth on an organic basis.
"What we've seen is a continuation of the very strong growth of the US business," said Dyson. "But also improvement of trading in the UK. And the integration of the businesses in Asia and EMEA have also gone well."
Last year, Next 15 announced a merger of Text 100 and Bite in Europe and Asia-Pacific.
A note from Investec predicts Next 15 to reach £108.5m in revenue for its 2015 fiscal year, up from £98.7m one year ago. Growth in the US and UK leads the improvement, with slight slowdowns in Europe and Asia-Pacific. For 2016, Investec forecasts revenues of £123.7m.
Dyson noted that all of the group's firms had performed well in the US. OutCast "has done extremely well," he said, and opened a new office in Los Angeles, while "Bite has recovered from a pretty horrible year." Other US highlights included Text 100, M Booth, Blueshirt Group, Beyond and 463 Communications.
The group's UK recovery, he added, had been led by a "much improved Bite business and a stablised Lexis business." The latter firm is emerging from a tough time that included a goodwill writedown last year. Dyson also noted that two recent UK acquisitions — Story Worldwide and Morar Consulting — "have helped deliver improved profit margins."
Of the three new acquisitions, two are in the content marketing arena and one is an ad tech business, in line with the group's strategy of focusing on content, insight and technology.
"We think the future of PR is going to be driven by those three different areas," said Dyson. "It's largely why we haven't bought traditional PR agencies. All of these investments are typically designed to modernise the existing business or build new revenue lines going forward."
Europe, which accounts for 5% of Next 15's revenues, remains challenging. "It's profitable but it's not growing at anything like the pace of any other part of our business right now," said Dyson. "We need to take steps to modernise the business, and we had a tough time in Germany. We feel we're through the worst of it in Europe, but I wouldn't say we've got to a place where we are growing nicely."