Stock Analysis & Valuation Next 15 Group plc (NFG.L)

• Previous Close: £350.50
• Sector Valuation Confidence Level: High

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	121.41	-65
Intrinsic value (DCF)	94.23	-73
Graham-Dodd Method	1.47	-100
Graham Formula	2.97	-99

Strategic Investment Analysis

Company Overview

Next 15 Group plc (LSE: NFG.L) is a leading global communications and marketing services provider headquartered in London, UK. Operating under multiple specialized brands such as M Booth, Savanta, and Mach49, the company offers a comprehensive suite of services including data-driven insights, digital marketing, customer engagement, and business transformation. With a presence across the UK, Europe, Africa, the US, and Asia Pacific, Next 15 serves a diverse clientele, leveraging its expertise to drive growth and innovation in the competitive advertising and communications sector. The company rebranded from Next Fifteen Communications Group plc in April 2023 to reflect its expanded capabilities and strategic focus on integrated communications solutions. Next 15's diversified service portfolio and strong international footprint position it as a key player in the dynamic communication services industry.

Investment Summary

Next 15 Group plc presents a compelling investment case with its diversified service offerings and global reach in the high-growth communications sector. The company's revenue of £729.8 million and net income of £39.5 million for the fiscal year ending January 2025 demonstrate solid financial performance. With a market cap of approximately £270 million and a beta of 1.185, Next 15 offers moderate risk exposure with potential for growth. The company's strong operating cash flow of £69.4 million and healthy cash reserves of £89.4 million provide financial stability. However, investors should note the competitive nature of the advertising industry and the company's £151 million in total debt. The dividend yield of 15p per share adds an income component, making Next 15 an attractive option for balanced portfolios.

Competitive Analysis

Next 15 Group plc competes in the highly fragmented and competitive global advertising and communications market. The company's competitive advantage lies in its diversified brand portfolio, which allows it to offer specialized services across multiple disciplines including digital marketing, data analytics, and business transformation. This multi-brand strategy enables Next 15 to cater to niche markets while maintaining a cohesive corporate structure. The company's international presence across key markets (UK, US, and Asia Pacific) provides geographic diversification that mitigates regional economic risks. Next 15's focus on data-driven insights and digital transformation services positions it well in the evolving marketing landscape where traditional advertising is being supplemented by technology-enabled solutions. However, the company faces intense competition from larger global networks that benefit from greater scale and resources. Next 15's mid-market positioning allows it to offer more personalized services compared to mega-agencies, but it may lack the bargaining power with media vendors that larger competitors enjoy. The company's recent rebranding and continued acquisitions (like its purchase of M Booth) demonstrate an active growth strategy to enhance its capabilities and market position.

Major Competitors

• WPP plc (WPP.L): WPP is the world's largest advertising group by revenue, offering comprehensive marketing services globally. Its scale provides significant advantages in media buying and global account management, but its size can lead to less flexibility compared to mid-sized firms like Next 15. WPP's broad capabilities compete directly with Next 15's specialized offerings, though Next 15 can often provide more tailored solutions to clients.
• Omnicom Group Inc. (OMC): Omnicom is a global leader in marketing communications with strong capabilities in digital and traditional media. Its US dominance and global network pose significant competition to Next 15's expansion plans. While Omnicom has greater resources, Next 15's more focused approach in certain specialty areas (like data analytics) allows it to compete effectively in niche segments.
• Interpublic Group of Companies (IPG): Interpublic operates several well-known agency networks that compete directly with Next 15's offerings. Its strength in creative services and media buying challenges Next 15's positioning. However, Next 15's UK and European base provides it with stronger local market knowledge in those regions compared to Interpublic's US-centric operations.
• Publicis Groupe SA (PUB.PA): Publicis is a European advertising giant with strong digital transformation capabilities that compete with Next 15's service offerings. Its significant investments in technology and data analytics create direct competition, though Next 15's more specialized boutique agencies can offer greater flexibility and customization for certain clients.
• Havas SA (HAV.L): Havas operates as a mid-sized global network, making it a more direct competitor to Next 15 in terms of scale. Both companies emphasize integrated communications solutions, though Havas benefits from being part of the Vivendi group. Next 15's independent status allows for more agile decision-making and potentially greater client focus.