Next Fifteen said today a “personal act of embezzlement” by a long-time staffer in Bite Communications’ San Francisco office has led to a $2.8M write-off as the FBI and San Francisco Police investigate the alleged crime.
Next Fifteen on Oct. 31 said it would delay release of its financial results for the year ended July 31 because a fraud was discovered. In releasing its financials Nov. 27, the company said a long-standing member of the Bite finance team “in a trusted position” committed the act, which continued into the early part of the current fiscal year.
In addition to a $2.8M charge for the past year, chairman Richard Eyre said another write-off of $200K will be booked in the current year.
Revenues for the year rose six percent to £91.6M as the write-off cut into the group’s profits. Technology PR, which is more than 66% of Next Fifteen revenues, grew by just over 2%, the company said despite Bite’s loss of the HP account. Consumer PR declined by more than six percent on a “tough year” at its U.K. Lexis PR operation. Corporate communications, although only 7.2% of revenue, jumped 31% on revenues from The Blueshirt Group. Its pure digital/research business (10% of revenues) grew 34% organically.
Next Fifteen said steps are being taken to recoup lost assets from the fraud, but it’s too soon to estimate the likelihood of success.