Trading Statement

Trading Statement

Next Fifteen Communications Plc

Next Fifteen Communications Group plc

AGM and trading update

At the AGM to be held today at 12.00 p.m., Will Whitehorn, Chairman of Next Fifteen Communications Group plc (the "Group"), will make the following comments with regard to trading and the business since the start of the current financial year, 1 August 2008:

“I am pleased to report that, with almost six months of trading under its belt, the Group has made a good start to the current financial year. We expect the interim results for the period to 31 January 2009, before the effects of currency hedging contracts that the Company has in place, to be ahead of those of the same period last year. Revenue growth to date has been brought about by client wins and the strength of both the euro and the US dollar.

“The currency contracts came into effect on 1 August 2008 to hedge currency risk; however, the unforeseen movement in sterling over the period has created a negative impact to the Group’s profits of approximately £1.2m. If exchange rates for the US dollar and euro relative to sterling remain at current levels, full-year profits will be reduced by a further £1.4m, making the full-year impact approximately £2.6m. Whilst it is disappointing to have been affected by this, most of the contracts expire at the end of this financial year. As a result, the Group will benefit considerably from any continuing strength of the US dollar and euro when the new financial year starts on 1 August 2009.

“Having acquired the outstanding shares in Lexis and made the last major earn-out payment to the owners of OutCast, the Group will, in the six months to 31 January 2009, remain largely free of debt, with almost no remaining earn-out obligations. Assuming that it is approved by shareholders at the AGM today, a final dividend of 1.25p per share will be paid on 6 February 2009 in line with the continuing progressive dividend policy.

Full-year outlook

“To have made a positive start to the current financial year is encouraging, but the Group is not, and does not expect to be, immune to the uncertain economic climate that is currently affecting many world markets. Over the last two months we have experienced cuts in fee levels from certain clients. The Group has prepared for these changes by lowering its costs through an approximately 9% reduction in the workforce and the closure of its Seattle and Dublin offices. Despite the economic downturn and the costs of restructuring the business, the Group expects its revenues and headline profits before tax, excluding the effects of the currency hedging contracts, to be ahead of analysts’ estimates. However, taking the contracts into account, the Group is expecting reported profit before tax to be below last year’s level.

Cash and banking facilities

“The Group ended the last financial year, to 31 July 2008, with a net-funds position of £3.4m. This has been used to make the payments to Lexis and OutCast referred to earlier. The Group expects to generate cash in the second half of the current year despite the impact of the currency contracts and one-off costs from staff reductions. In addition, the Group has negotiated a revised £6m acquisition facility with Barclays Bank plc, which runs to December 2011, replacing a facility due to expire in November of this year. The Group remains acquisitive, even though it made no acquisitions in the last financial year due to the Board’s unwillingness to pay what it believed were inflated transaction values. We believe that current market conditions will produce some interesting merger and acquisition opportunities, with pricing at more realistic levels.

“The Group expects to report its Interim Results on 21 April 2009."

Name of contact and telephone number for queries:

Mark Sanford, Company Secretary	Â	0208 846 0778
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Canaccord Adams Limited
Mark Williams
Adria Da Breo Richards		020 7050 6500