Agency combine Next Fifteen Communications Group said organic revenue ticked up five percent in the U.S. and one percent overall to £46.6M for the six months ended Jan. 31 as it ramps up digital investment and speeds up its diversification from PR to full digital services.

Dyson
Dyson

Profit for the period declined nearly 20% to £1.5M amid ongoing restructuring and digital investment at the company, which owns firms like Text100, M Booth, Bite Communications and OutCast Agency.

Next Fifteen CEO Tim Dyson said acquisition-related payments and investment to create a new insight and data business have increased the company's "net debt" load 18% to £5.2. He noted the U.S. is in recovery while parts of Europe continue to decline.

"Very much this is the story of a business in transition, albeit from a very strong base," said Dyson, who noted Next Fifteen will lay out another £2M over two years for staff restructuring and investment in new digital efforts and products as it accelerates its ongoing diversification from strictly PR to a "full service digital marketing group."

The financial fraud at Bite resulted in another £0.6M charge in the first half and Dyson said a challenging last quarter led to a small number of layoffs at that firm, which is expected to suffer from the "disruption" through the second half. The fraud investigation is complete and Dyson said the matter is now in the legal system.

New client wins for the U.S. included Campari, Samsung, Virgin and Viacom against losses like Yahoo and Nokia.

Next Fifteen bought Washington-based digital PA shop Connections Media in March for about $1.9M plus earn-outs.

"Overall the group is seeing good progress from its portfolio of agencies," said chairman Richard Eyre. "However, [while] revenues remain strong, the costs of restructuring and some isolated trading challenges are likely to impact the reported profits for the second half."

Next Fifteen also said it created an equity incentive -- a 15% stake -- for senior management at OutCast Agency to "drive a commercial change in behavior" and focus senior staff on improving the gross margin and profit of the firm.