PR firm Next Fifteen Communications says that adjusted profits will be in line with expectations but restructuring charges will be higher than expected in the year to July 2009.
Underlying revenues will be in line with expectations although the consolidation of a former associate will mean that the reported figure will be higher than expected. There are a number of one-off charges including the costs of an aborted deal costs relating to a proposed Chinese acquisition and the cost of the company’s own bid talks.
Oracle’s acquisition of Sum Microsystems means that Next Fifteen has lost Sun as a client. Sun generated around $5m a year in revenues. Next Fifteen is cutting costs to reflect this and they will be “substantially lower” this year. Client budgets also appear to have stabilised.
Next Fifteen is buying New York-based PR consultancy M Booth & Associates for an initial $4m in cash with deferred consideration of up to $13.25m. The business has to achieve revenue and profit targets over a four year period to achieve the deferred consideration.
M Booth generated a profit of $1m on revenues of $10.4m in 2008. Customers include Unilever, JC Penney and Remy Cointreau. The business will be integrated with UK-based consumer PR consultancy Lexis.
Expanding this part of the business will offset the loss of the Sun business.
At 53p a share, up 5p on the day, Next Fifteen is valued at £28.7m. The shares are trading on seven times 2009-10 earnings.
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