Technology PR firm Next Fifteen Communications says that the second half of the financial year will be much tougher.
Revenues increased 10% to £33.5m in the six months to January 2009, while profit adjusted for reorganisation costs and movements in the fair value of financial instruments improved from £3.08m to £3.55m.
However, by November the effects of the general world economic problems started to show through and they have affected the 2009 budgets of clients. Many of these clients have cut their budgets. Consumer technology companies have cut budgets the most. Asian business has held up better. The second half decline in Next Fifteen’s revenues could be around 10%.
Chief executive Tim Dyson says that he believes that there will be more M&A in the technology sector and he believes that IBM may feel the need to make a move following Oracle’s purchase of Sun.
Next Fifteen will continue to look for PR acquisitions but that is more likely in the medium-term.
First half reorganisation costs were £700,000 and there will be a further £200,000 cost in the second half.
Edison Investment Research expects full year adjusted profits to fall from £6.6m to £4.5m. There could be net debt of £1.5m by the end of July 2009 but it should get back to a net cash position next year.
At 37.75p a share, Next Fifteen is valued at £20.4m. That means that the shares are trading on seven times 2008-09 prospective earnings.
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