Glowing annual results from international public relations group Next Fifteen put a better spin on what many in the industry see as a looming downturn.

However, chief executive Tim Dyson maintains that the group’s strength is based upon its expertise in the growing new media space and its host of healthy high-profile technology clients, among them IBM, Microsoft and Yahoo.

Record results for the year to July showed revenues up 6.5% at £63.1m, driving adjusted pre-tax profits north by a healthy 18% to £6.58m. Consequently, the board decided to increase the dividend by 13.3% to 1.25p. Next Fifteen said 8.8% of its sales came from North America, a region that should give a good indication of how the business will perform in the rest of the world – given the speculation of recession there, with a recent industry report finding that marketing budgets were being slashed by the greatest extent in the last nine years.

However, Dyson emphasises that the company adopts a cautious approach to growth, keeping a keen eye on margins and reducing costs where possible. He is also running the rule over some small acquisitions in Asia and America which, due to the company’s positive net cash, could be snapped up in the next six months.

Down from last year’s five-year high of 98.5p, shares in Next Fifteen are trading on a bargain 4.6 times forecast earnings, based on forecast pre-tax profits of £7.25m and earnings of 9.2p this year. Although the company is cash generative and better positioned than many peers – giving it the ability to ride out downturn – it won’t be immune from negative sector sentiment. Nevertheless, Next Fifteen is a long-term winner and the shares are not to be sold. Hold.

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Next Fifteen Communications	AIM	£18.12m	33.50p	0.00p
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