Digital transformation continues apace

Tim Dyson, Group CEO

We have just announced our second interim results for the twelve months to 31 July 2014. It is great to report that trading was encouraging during the period with organic revenue growth of 5%, largely driven by a continued strong performance from our North American business which saw 12% organic revenue growth.

Trading in the UK was much improved in the second 6 months with a like for like revenue growth of 4% whilst EMEA and APAC were broadly flat. The Group’s reported total annual revenue increased by 6% to £101.5m, up from £96.1mm in 2013.

We are continuing our transition from traditional communications services towards social and digital communications. At Next 15 we want to create a new type of integrated marketing group – one that positions itself around the technology of marketing: data, insight, analytics, apps, content platforms and of course content itself.

The internet is redefining the role of PR – from being the poor relation of marketing services to being the objective experts of digital media. We have trusted adviser status with key clients and that gives us the chance to redefine and extend our areas of influence across digital, creative, mobile, social networking and content marketing.

I believe our agencies, each specialists and best in class in their field, can become “open source”, that is, easy to integrate with. This will provide new broader opportunities for our clients, enabling them to easily use the spectrum of products and services from across the Group in a “plug ‘n play” fashion.

In practice this means that we should have an obsessive focus on insight and analytics, content and technology and, wherever possible, simplify the business model. In APAC we have aligned our Text and Bite operations and we expect to see an improved performance from the region in the coming year.

Further I am really pleased to announce that the Group has agreed to acquire the trade and assets of Story, a content advertising agency which applies established storytelling techniques and talent to marketing and communications. Story has offices in New York and Seattle and its clients include Unilever, SEI, Beech-Nut and Lexus.  This continues the Group’s strategy of investing in digital content and insight businesses.

In San Francisco we have signed a lease at 100 Montgomery Street which will be the new location for all of our businesses in that city. After a four month fit-out, we are aiming to relocate all of the Group’s Bay Area businesses there early in the New Year.

Improving our financial controls and processes has been a real focus of the last six months following the appointment of Peter Harris in March of this year and I am pleased to say that he and his team have implemented a number of changes benefitting our agencies and our clients.

Current trading remains encouraging, with good performances expected across the board for the rest of our new financial year to January 2015.  With a strong new business pipeline and significant new client wins including GoPro, DropBox and BT, I am confident that even better times lie ahead.