Next 15’s share price nosedives by 50% following major client contract non-renewal.
- A significant revenue shortfall of £80m expected in 2026 due to the contract lapse.
- Revised financial guidance predicts a decrease in FY25 revenue and profits.
- Previous full-year results show modest revenue growth, largely from acquisitions.
- Ongoing weaknesses noted in technology and public sector client spending.
Shares in Next 15 plummeted by a stark 50% after announcing that a key client decided not to extend its contract. This unexpected move has put significant pressure on the company’s financial health and market standing.
The company’s Mach49 division is anticipated to experience an £80 million revenue deficit in the fiscal year 2026, as cited by City AM. Such a deficit emphasizes the critical importance of client retention for sustained business success and the inherent risks of dependency on major clients.
Consequently, Next 15 has adjusted its financial projections downward, indicating a challenging fiscal outlook. As a result, initial shareholder reactions reflected concern, leading to a sharp fall in share value during early market trading.
In a statement to the London Stock Exchange, Next 15 highlighted ongoing challenges in spending trends among technology customers and noted reduced revenues from public sector engagements. This trend, combined with the lost client, is reported to contribute to the anticipated diminished revenue and profit margins in the FY25 period.
Despite these setbacks, earlier full-year results released in April showed a revenue of £577.8 million, a modest growth of 2.5% mainly driven by acquisitions. The group also reported an increase in adjusted operating profit by 6.1%, amounting to £121.1 million. This growth trajectory, however, now faces potential obstacles due to the recent developments.
Moreover, the company reported a decrease in liabilities relating to earn-out payments by £44 million, with Mach49 accounting for £32.3 million of this reduction. This indicates efforts towards financial optimization, although the recent client departure poses new challenges that may offset these gains.
Next 15’s immediate challenges underscore the volatility and risks inherent in dependency on major clients for digital communication firms.
