Next 15 sacks three executives over potential misconduct at Mach49
A marketing company quoted on London's junior Aim market has warned on profits and said that its chief executive would step down after uncovering 'potential serious misconduct' relating to a company that it previously acquired.
The potential misconduct was discovered by Next 15 after a review of a big contract for Mach49, an advisory company based in Silicon Valley, which was cancelled early in September.
The loss of part of the contract lowered the earnout for the sellers of the business, which was based on how profitable the agency was between 2020, when it was acquired, and January 2025.
Next 15 said it expected 'a lower conversion of opportunities within this brand's pipeline' after uncovering the potential issues, which together with a weakening in the dollar, meant that adjusted operating profit for the current financial year would be 'materially below' market expectations of £80.5 million. The company generates about half of its revenue in dollars.
Three members of Mach49's senior management team have been sacked, including Linda Yates, Mach49's founder and chief executive, and no further payments will be made to Yates, the company said.
Next 15 said it was in the process of reporting the matters to relevant law enforcement agencies and would 'ensure that full co-operation is provided to those agencies'.
Tim Dyson, the company's chief executive of more than 30 years, will retire from the business and be replaced by Sam Knights, who is the boss of Shopper Media Group, a marketing company owned by Next 15.
Dyson's exit came on the same day as the company's annual meeting, which meant a resolution for his re-election as a director was withdrawn.
The $400 million contract, which was announced 18 months after Next 15 acquired the company in 2020, was cancelled at the end of last year and not in 2026, as had been expected previously.
Winning the contract had increased the earnout due to the owners of Mach49 by £107 million, according to Next 15's 2022 full-year results, which pushed the company to a £80.1 million pre-tax loss that year.
The shares, which have fallen 76 per cent over the past 12 months, were down 77p, or 27 per cent, to 212p in afternoon trading.
Next 15 is best known in the City as the owner of MHP Group, which handles the financial communications for dozens of companies listed on the stock market, including its parent. It also owns other consultancies, advising clients on everything from marketing to technology to communications. Next 15's agencies have worked with some of the world's best-known brands and companies, including Apple, BAE Systems and Pepsi.
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