Next 15 Group plc (LSE:NFG) held its total Dividend at 15.35 pence for the year to 31 January 2026, with net Debt reduced to GBP 35.6 million, equivalent to 0.4 times adjusted EBITDA. The group is repositioning as a data and AI-led growth platform. This article looks at the cover and Balance Sheet behind the dividend.

Company Overview

Next 15 is a growth consultancy that provides customer insight, delivery, engagement and Business transformation services. In its full-year results on 7 May 2026, the group reported net Revenue of GBP 448.8 million, adjusted operating profit of GBP 67.6 million and an adjusted Operating Margin of 15.1%. It has simplified its portfolio, wound down its Mach49 venture-building unit and is integrating its core businesses.

Dividend Profile

The final dividend was 10.6 pence, unchanged, and together with the 4.75 pence interim it gives a total of 15.35 pence for the year. The stock table shows a trailing Dividend Yield of 4.65% and trailing Diluted Earnings per Share of negative GBP 0.32, so no price-to-earnings ratio is shown. Statutory earnings include one-off items, so adjusted measures give a clearer view of the operating business.

Dividend Sustainability Analysis

The board described the group's financial position as sound and maintained the dividend in both the interim and the final. Net debt reduction and a low Leverage Ratio support the approach.

Payout Ratio and Earnings Coverage

Adjusted diluted earnings per share were 44.4 pence, compared with 47.5 pence a year earlier. Against a dividend of 15.35 pence, this gives adjusted cover of about 2.9 times. Adjusted profit before tax was GBP 63.4 million, compared with GBP 68.0 million. Statutory earnings were lower, which is why the board focuses on adjusted and cash measures.

Adjusted Cash Flow Coverage

Net cash generated from operations was GBP 63.3 million, compared with GBP 96.1 million, with a Working Capital inflow of GBP 43.8 million compared with an outflow of GBP 7.0 million the year before. The dividend costs considerably less than the cash generated from operations in the year.

Balance Sheet and Leverage

Net debt was GBP 35.6 million at 31 January 2026, down from GBP 38.4 million, and the group held cash of GBP 88.3 million. Leverage of 0.4 times adjusted EBITDA compares with a covenant limit of 2.5 times, which leaves wide headroom.

Liquidity

Cash of GBP 88.3 million and committed bank facilities support working capital and earn-out settlements. Interim leverage was 0.5 times at 31 July 2025, showing that the ratio has remained low through the year.

Revenue Stability and Profit Trends

Net revenue fell 6.3% and adjusted operating profit fell from GBP 74.0 million to GBP 67.6 million, as technology and public sector clients limited discretionary spending. Margin held at 15.1%, compared with 15.4%. Restructuring savings of GBP 26 million are expected to flow through in the year to January 2027, and the board expects constrained discretionary spending to keep cost discipline a priority.

Interest Rate and Commodity Exposure

There is no commodity exposure. Lower net debt reduced finance costs, and currency movements affect reported results because the group earns revenue in the United States, Europe and elsewhere.

Counterparty Concentration

Clients span consumer and retail, technology, public sector, health and other sectors. Technology represented about 30% and consumer and retail 31% of revenue at the half-year in 2025, so the exposure is spread.

Management Commentary

Chief executive Tim Knights said the next phase is delivery, converting a simpler, higher-quality business into sustained growth and improved returns, and that priorities include resolving the Mach49 legacy matter, continuing simplification and returning to organic growth. Management described early progress in the year to January 2027.

Sector-Specific Dividend Risks

Consultancy and Marketing services depend on client budgets, which tighten when the economy slows. Technology clients have been cautious, and public sector timing can vary. Cost savings and portfolio simplification are intended to improve resilience.

Key Risks to Monitor

1. Client spending in technology and public sector markets.

2. Statutory earnings are lower than adjusted earnings.

3. The Mach49 arbitration remains in progress.

4. Currency movements affect reported profit.

5. Earn-out settlements use cash.

Bull Case

Supporters point to adjusted cover of about 2.9 times, leverage of 0.4 times against a covenant of 2.5 times, GBP 88.3 million of cash, GBP 26 million of expected restructuring savings and a simpler portfolio focused on data and AI services.

Bear Case

A measured view recognises that net revenue and adjusted profit declined, that statutory earnings were negative and that a legacy matter linked to Mach49 remains in arbitration. Client spending in technology markets is a variable.

Latest News and Developments

Full-year results on 7 May 2026 reported lower net debt and a maintained dividend. The group has since reported half-year results for the six months to 31 July 2026, and investors can consult the latest announcement for the Interim Dividend and trading update.

Dividend Sustainability Rating

Rating: Moderately Sustainable

The rating reflects adjusted cover of about 2.9 times, low leverage and ample cash. It also reflects statutory earnings that were negative in the period and a legacy matter that is still being resolved.

Investor Takeaway

Next 15 Group is holding its dividend while it simplifies its portfolio and invests in data and AI capabilities. Low leverage and healthy cash generation support the payout, and the pace of client spending recovery will influence how quickly adjusted earnings grow again.