AIM:NFC

Stock Analysis Report

Next Fifteen Communications Group

Executive Summary

Next Fifteen Communications Group plc provides communications services in the United Kingdom, Europe, the Middle East, Africa, the United States, and the Asia Pacific.

Rewards

Trading at 25.2% below its fair value

Earnings are forecast to grow 31.89% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (2.6%) are lower than last year (4.9%)

Shareholders have been diluted in the past year



Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Next Fifteen Communications Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NFC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.3%

NFC

-0.3%

GB Media

-0.2%

GB Market


1 Year Return

-5.3%

NFC

5.5%

GB Media

6.1%

GB Market

Return vs Industry: NFC underperformed the UK Media industry which returned 5.5% over the past year.

Return vs Market: NFC underperformed the UK Market which returned 6.1% over the past year.


Shareholder returns

NFCIndustryMarket
7 Day-1.3%-0.3%-0.2%
30 Day-7.2%-5.4%-2.7%
90 Day7.6%-1.1%3.9%
1 Year-4.0%-5.3%9.5%5.5%11.8%6.1%
3 Year26.2%21.1%-9.6%-21.2%17.5%2.6%
5 Year228.7%204.5%-3.2%-22.9%34.8%3.7%

Price Volatility Vs. Market

How volatile is Next Fifteen Communications Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Next Fifteen Communications Group undervalued compared to its fair value and its price relative to the market?

25.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NFC (£5.06) is trading below our estimate of fair value (£6.76)

Significantly Below Fair Value: NFC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NFC is poor value based on its PE Ratio (56.1x) compared to the Media industry average (22.7x).

PE vs Market: NFC is poor value based on its PE Ratio (56.1x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: NFC is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: NFC is overvalued based on its PB Ratio (3.8x) compared to the GB Media industry average (1.4x).


Next Steps

Future Growth

How is Next Fifteen Communications Group forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

31.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NFC's forecast earnings growth (31.9% per year) is above the savings rate (0.5%).

Earnings vs Market: NFC's earnings (31.9% per year) are forecast to grow faster than the UK market (12.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NFC's revenue (5.2% per year) is forecast to grow faster than the UK market (3.5% per year).

High Growth Revenue: NFC's revenue (5.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NFC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Next Fifteen Communications Group performed over the past 5 years?

39.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NFC has a large one-off loss of £7.5M impacting its July 31 2019 financial results.

Growing Profit Margin: NFC's current net profit margins (2.6%) are lower than last year (4.9%).


Past Earnings Growth Analysis

Earnings Trend: NFC has become profitable over the past 5 years, growing earnings by 39.3% per year.

Accelerating Growth: NFC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NFC had negative earnings growth (-40.7%) over the past year, making it difficult to compare to the Media industry average (6.8%).


Return on Equity

High ROE: NFC's Return on Equity (7.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Next Fifteen Communications Group's financial position?


Financial Position Analysis

Short Term Liabilities: NFC's short term assets (£99.1M) do not cover its short term liabilities (£100.0M).

Long Term Liabilities: NFC's short term assets (£99.1M) exceed its long term liabilities (£92.6M).


Debt to Equity History and Analysis

Debt Level: NFC's debt to equity ratio (22.4%) is considered satisfactory.

Reducing Debt: NFC's debt to equity ratio has reduced from 39% to 22.4% over the past 5 years.

Debt Coverage: NFC's debt is well covered by operating cash flow (176.2%).

Interest Coverage: NFC's interest payments on its debt are well covered by EBIT (12.6x coverage).


Balance Sheet

Inventory Level: NFC has a low level of unsold assets or inventory.

Debt Coverage by Assets: NFC's debt is covered by short term assets (assets are 4x debt).


Next Steps

Dividend

What is Next Fifteen Communications Group's current dividend yield, its reliability and sustainability?

1.50%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.8%markettop25%5.1%industryaverage4.1%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: NFC's dividend (1.5%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: NFC's dividend (1.5%) is low compared to the top 25% of dividend payers in the UK market (5.1%).


Stability and Growth of Payments

Stable Dividend: NFC's dividend payments have been volatile in the past 10 years.

Growing Dividend: NFC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (87.7%), NFC's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NFC's dividends in 3 years are forecast to be well covered by earnings (26.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.3yrs

Average management tenure


CEO

Tim Dyson (58yo)

28.1yrs

Tenure

UK£1,076,000

Compensation

Mr. Timothy John Bruce Dyson, also known as Tim, has been the Chief Executive Officer of Next Fifteen Communications Group PLC of 463 Communications, LLC since 1992 and heads its global operations. Mr. Dys ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD1.40M) is above average for companies of similar size in the UK market ($USD847.25K).

Compensation vs Earnings: Tim's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Timothy John Dyson
CEO & Executive Director28.1yrsUK£1.08m5.86% £25.7m
Peter Harris
CFO & Executive Director5.9yrsUK£425.00k0.41% £1.8m
Nick Morrison
General Counsel & Company Secretary4.1yrsno datano data
Aedhmar Hynes
Member of Executive Council and Chief Executive Officer of Text 100 International0yrsno datano data

6.3yrs

Average Tenure

55yo

Average Age

Experienced Management: NFC's management team is seasoned and experienced (6.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Timothy John Dyson
CEO & Executive Director28.1yrsUK£1.08m5.86% £25.7m
Peter Harris
CFO & Executive Director5.9yrsUK£425.00k0.41% £1.8m
Richard Eyre
Non-Executive Chairman8.8yrsUK£150.00k0.13% £581.3k
Penelope Ladkin-Brand
Non-Executive Director2.6yrsUK£46.00k0.023% £101.7k
Helen Hunter
Independent Non-Executive Director0.7yrsno datano data

5.9yrs

Average Tenure

57.5yo

Average Age

Experienced Board: NFC's board of directors are considered experienced (5.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7.9%.


Top Shareholders

Company Information

Next Fifteen Communications Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Next Fifteen Communications Group plc
  • Ticker: NFC
  • Exchange: AIM
  • Founded: 1981
  • Industry: Advertising
  • Sector: Media
  • Market Cap: UK£438.077m
  • Shares outstanding: 86.66m
  • Website: https://www.next15.com

Number of Employees


Location

  • Next Fifteen Communications Group plc
  • 75 Bermondsey Street
  • London
  • Greater London
  • SE1 3XF
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NFCAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPMar 1997
NXFN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 1997

Biography

Next Fifteen Communications Group plc provides communications services in the United Kingdom, Europe, the Middle East, Africa, the United States, and the Asia Pacific. It offers strategy and insight, online marketing, corporate and internal communications, media training, brand and message consultancy, market research, digital, marketing communications, and creative and content, as well as public, media, analyst, and investor relations services; and digital and technology products and services. The company provides its services under the agent3, Beyond, Bite, Brandwidth, Charterhouse Research, Circleresearch, Connections Media, Elvis, Encore Digital Media, M Booth, MIG, Morar HPI, ODD, Publitek, Text100, The Blueshirt Group, The OutCast Agency, Twogether, Viga, Velocity, and Vrge brands. Next Fifteen Communications Group plc was founded in 1981 and is based in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 20:39
End of Day Share Price2020/02/17 00:00
Earnings2019/07/31
Annual Earnings2019/01/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.