A legal dispute with Balance Sheet weight

Next 15 Group, the AIM-listed marketing, data and technology services group, has spent much of the past year reshaping its portfolio. (LSE:NFG) Yet one legacy issue continues to sit over its accounts: the arbitration with the former members of Mach49, a venture-building Business it acquired and has since closed. The half-year report for the six months to 31 July 2026, published on 8 October, sets out how large the exposure is and why the directors flagged a Going Concern uncertainty because of it.

There was no Next 15 announcement on 3 November 2026; the latest filing on the LSE list is a routine voting rights notice dated 2 November. (LSE:NFG) This article draws on the October report.

How the dispute arose

According to the report, the group became aware in June 2025 of potential serious misconduct concerning the Mach49 business, which it reported to the relevant law enforcement agencies. (LSE:NFG) Since then it has made no further earnout payments to Mach49's selling shareholder. Confidential arbitration proceedings are under way covering material claims that include the remaining earnout, and Next 15 has counterclaimed for earnout amounts it previously paid.

Mach49 ceased operations on 31 January 2026 and is reported as a discontinued operation. (LSE:NFG) The report says the arbitration hearing has been completed and the group is awaiting an outcome, which it expects within the financial year ending 31 January 2027.

The numbers involved

At 31 July 2026 the balance sheet carried contingent consideration of £71.5 million, of which £67.7 million relates to the remaining Mach49 earnout. The company says this Liability will continue to be recognised until the proceedings are finally concluded. Mach49-related costs, principally legal and adviser fees, totalled £10.0 million in the half and were excluded from adjusted profit.

These costs were the main reason statutory operating profit fell to £5.1 million from £19.1 million and the group reported a statutory loss before tax of £1.5 million. Adjusted operating profit, by contrast, was £32.1 million. Adviser fee payments also contributed to a £21.2 million Working Capital outflow, and net Debt rose to £57.3 million from £45.3 million, equal to 0.7 times adjusted EBITDA.

Why the going concern wording matters

The directors state that even in a reasonable worst-case trading scenario, and after cost mitigation, the group has sufficient Liquidity to settle the £71.5 million recognised. However, they also say they cannot entirely exclude a material adverse outcome that could exceed forecast liquidity in the longer term. Solely because of that uncertainty, they concluded that a material uncertainty exists that may cast significant doubt on the group's ability to continue as a going concern, while still preparing the accounts on a going concern basis.

On our reading, this is a disclosure driven by an unknowable legal result rather than by current trading. The group has a £175 million revolving Credit Facility available until December 2027, reducing to £155 million for a further year, and says disposals under way could generate substantial cash proceeds.

Trading backdrop and dividend

Operationally, management reported three consecutive months of like-for-like Revenue growth from June to August 2026, and expects like-for-like growth for the full year with revenue and adjusted operating profit in line with market expectations. That is guidance, not a result. The interim Dividend was held at 4.75p, payable on 20 November 2026 to shareholders on the register at 16 October.

The LSE delayed price for the 3 November 2026 session, was 343.5p.

What to watch

The arbitration ruling is the key event, with a decision expected before 31 January 2027. Any eventual outcome could change the liability, cash position and going concern wording materially. Progress on disposals and the dividend payment on 20 November are the other dated items.