TIDMJWNG
RNS Number : 1489I
Jaywing PLC
10 December 2020
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Jaywing plc
Interim Results 2020/2021
Jaywing plc (AIM: JWNG) the integrated agency powered by data
science, today announces its interim results for the six months
ended 30 September 2020 ("H1").
Financial highlights
6 months to 30 6 months to 30
September 2020 September 2019
GBP'000
GBP'000
Net Revenue* 9,342 11,996
---------------- ----------------
Adjusted EBITDA**
Including IFRS 16 1,389 (573)
Excluding IFRS 16 1,034 (945)
---------------- ----------------
Cash Generated from Operations
Including IFRS 16 1,914 380
Excluding IFRS 16 1,559 8
---------------- ----------------
Net Debt (excluding IFRS
16) *** (5,131) (5,748)
---------------- ----------------
Reconciliation of Operating Profit / (Loss) with Adjusted
EBITDA
6 months to 30 6 months to 30
September 2020 September 2019
GBP'000 GBP'000
Operating Profit / (Loss) 72 (1,380)
---------------- ----------------
Add Back:
---------------- ----------------
Depreciation 126 187
---------------- ----------------
Depreciation of right of
use assets 332 333
---------------- ----------------
Amortisation of intangibles 660 777
---------------- ----------------
EBITDA 1,190 (83)
---------------- ----------------
Impairment of other intangibles**** 690 -
---------------- ----------------
Restructuring charges 205 295
---------------- ----------------
Share based payment charges
/ (credits) (696) (785)
---------------- ----------------
Adjusted EBITDA 1,389 (573)
---------------- ----------------
* Revenue less third-party direct costs of sale
** Adjusted EBITDA represents EBITDA before restructuring costs,
impairment charges and share based payment charges / (credits)
*** Including accrued interest
**** Impairment of historic trademark assets following brand
integration under Jaywing during the period
Operational Highlights
-- GBP2.0m improvement in adjusted EBITDA to GBP1.4m, compared
with a GBP0.6m loss in the prior comparative period
-- GBP1.9m cash generated from operations including IFRS 16 (GBP1.6m Excluding IFRS 16)
-- Reduction of net debt excluding IFRS 16 to (GBP5.1m)
-- Business now integrated with a sector-focused structure and a platform for growth
Commenting on the results, Andrew Fryatt, CEO of Jaywing plc,
said :
"I'm delighted to report a significant turnaround in Jaywing's
profitability, to deliver GBP1.4m of adjusted EBITDA for the half
year period, compared with a loss of GBP0.6m for the prior year
comparative period, despite a fall in revenue primarily brought
about by the COVID pandemic. We have been able to stabilise the
business and restore it to both profitability and strong cashflow
generation. We continue to operate successfully on a remote basis,
and have taken measures to secure our financial position, including
voluntary salary reductions, cost reductions, rent deferrals, use
of Government grant income and deferral of certain HMRC payments.
These actions have ensured that despite the revenue reduction, the
impact on EBITDA was mitigated and we have been able to retain key
employees so that we are now well positioned to benefit as revenues
start to rebuild.
There was a strong improvement in cash generation in the half
(GBP1.9m including IFRS16), enabling a reduction in net debt
excluding IFRS 16 to (GBP5.1m).
The restructuring plan that commenced last year continued into
the current year, and in August we reorganised our UK businesses to
focus on making our full range of services available to our entire
client base, whilst reducing headcount by a further 20 heads. Our
front office teams are now focused on three broad sectors: Retail,
FMCG and Financial & Professional Services (the full make up of
each sector is detailed in Note 5). They are supported by 4
operational divisions: Data Science, Performance & Media
Science, Creative and Public Relations. Together, these enable our
proposition of an "integrated agency powered by data science",
which is proving ever more relevant in the current climate.
In Australia, just after the end of the first half of the year
we completed the acquisition of the remaining 25% of the shares of
Massive Group Pty Ltd, not already owned by Jaywing, a key step
towards our two Australian businesses coming together as "Jaywing
Australia", to deliver the same integrated approach. Our Australian
and UK teams are working increasingly closely to develop
capabilities and deliver client projects, including some initial
projects in the data science space.
Despite the COVID-related revenue reduction, net revenue per
employee increased by 3.8% to GBP32.7k in the first half, with an
adjusted EBITDA of GBP5.1k per employee.
Across the Group, Online Performance remains our biggest
workstream, at 43% of net revenues, but we are focused on
increasing the breadth of services delivered in each of our core
sectors. In the first half, for example, we achieved a 7% increase
in Brand Performance from Financial Services clients, as well as
Data Science & Analysis based contracts increasing as a share
of net revenues (now 27%). We believe that our ability to bring
together these disciplines to solve client challenges, whether in
Marketing or Risk, gives us a fundamental advantage in the
marketplace.
Having just moved from the second lockdown into the new tiered
structure, we remain cautious about the full year outlook. We have
continued to win new business with new clients including Ikano
Bank, Starling Bank, Studio Retail and Costcutter, and also
additional business with existing clients, including award-winning
work for KCOM. However, whilst some clients are now spending at or
above pre-pandemic levels, others have continued to defer
expenditure in the face of the ongoing COVID impact on their
business. We are nonetheless confident that the business is now on
a secure footing with the foundations in place for recovery and
future growth."
Enquiries :
Jaywing plc
Caroline Ackroyd (CFO / Company Tel: 0114 281 1200
Secretary)
Cenkos Securities plc
Nicholas Wells / Callum Davidson Tel: 020 7397 8900
Consolidated statement of comprehensive income
Unaudited Unaudited
Six months Six months Audited
ended ended year
30 Sept 30 Sept ended
2020 2019 31 March
2020
Note GBP'000 GBP'000 GBP'000
Revenue 11,319 13,815 29,723
Direct costs (1,977) (1,819) (5,680)
------------- ------------- -----------
Net Revenue 5 9,342 11,996 24,043
Other operating income 6 599 20 38
Amortisation (660) (777) (1,547)
Operating expenses (9,209) (12,619) (31,408)
------------- ------------- -----------
Operating income / (loss) 72 (1,380) (8,874)
------------- ------------- -----------
Finance income - 1 -
Finance costs (323) (157) (518)
------------- ------------- -----------
Net financing costs (323) (156) (518)
------------- ------------- -----------
Loss before tax (251) (1,536) (9,392)
Tax (charge) / credit (136) 321 436
------------- ------------- -----------
Loss after tax for the period (387) (1,215) (8,956)
Loss for the period is attributable
to:
Non-controlling interests 114 74 188
Owners of the parent (501) (1,289) (9,144)
------------- ------------- -----------
(387) (1,215) (8,956)
Other comprehensive income
Items that will be reclassified
subsequently to profit or
loss
Exchange differences on
retranslation of foreign
operations 181 (13) (155)
------------- ------------- -----------
Total comprehensive loss
for the period (206) (1,228) (9,111)
------------- ------------- -----------
Total comprehensive loss
is attributable to:
Non-controlling interests 114 74 188
------------- ------------- -----------
Owners of the parent (320) (1,302) (9,299)
------------- ------------- -----------
(206) (1,228) (9,111)
Loss per share 7
Basic loss per share from
continuing operations (0.54p) (1.38p) (9.95p)
Diluted loss per share from
continuing operations (0.54p) (1.38p) (9.95p)
Consolidated balance sheet
Unaudited Unaudited Audited
30 Sept 30 Sept 31 March
2020 2019 # 2020
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 2,460 3,330 2,887
Goodwill 27,865 33,054 27,586
Other intangible assets 1,302 3,650 2,604
------------ ------------ -----------
31,627 40,034 33,077
------------ ------------ -----------
Current assets
Trade and other receivables 5,856 6,522 5,877
Tax receivable 421 285 391
Cash and cash equivalents 3,044 1 1,996
9,321 6,808 8,264
------------ ------------ -----------
Total assets 40,948 46,842 41,341
------------ ------------ -----------
Liabilities
Current liabilities
Bank overdraft 8 - (549) -
Other interest-bearing loans
and borrowings 8 (8,175) (1,800) (7,939)
Trade and other payables (9,141) (8,154) (8,447)
Current lease liabilities (678) (678) (678)
Tax payable - - (106)
Provisions (42) (42) (42)
------------ ------------ -----------
(18,036) (11,223) (17,212)
------------ ------------ -----------
Non-current liabilities
Other interest-bearing loans
and borrowings 8 - (3,400) -
Lease liability (1,200) (1,770) (1,515)
Deferred tax liabilities (422) (552) (422)
(1,622) (5,722) (1,937)
------------ ------------ -----------
Total liabilities (19,658) (16,945) (19,149)
------------ ------------ -----------
Net assets 21,290 29,897 22,192
------------ ------------ -----------
Equity
Capital and reserves attributable
to equity holders of the
company
Share capital 9 34,992 34,992 34,992
Share premium account 10,088 10,088 10,088
Capital redemption reserve 125 125 125
Shares purchased for treasury (25) (25) (25)
Share option reserve - 683 696
Foreign currency translation
reserve 26 (13) (155)
Retained earnings (25,369) (17,178) (24,868)
------------ ------------ -----------
Equity attributable to owners
of the parent 19,837 28,672 20,853
Non-controlling interest 1,453 1,225 1,339
Total equity 21,290 29,897 22,192
------------ ------------ -----------
# 2019 Interim balance sheet restated (see note 4)
Consolidated cash flow statement
Unaudited Unaudited
Six months Six months Audited
ended ended year
30 Sept 30 Sept ended
2020 2019 # 31 March
2020
Note GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Loss for the period (387) (1,215) (8,956)
Adjustment for:
Depreciation, amortisation
and impairment 1,808 1,297 8,333
Foreign exchange - (15) -
Finance income - (1) -
Finance costs 323 157 518
Share based payment charge (696) (155) (484)
Taxation 136 (321) (436)
------------ ------------ -----------
Operating cash flow before
changes in working capital 1,184 (253) (1,025)
(Increase) / Decrease in
trade and other receivables (20) 1,736 2,428
Increase / (Decrease) in
trade and other payables 750 (1,103) (450)
------------ ------------ -----------
Cash (used in)/generated
from operations 1,914 380 953
Interest received - 1 -
Interest paid (41) (103) (279)
Tax paid (152) (273) (309)
------------ ------------ -----------
Net cash flow from operating
activities 1,721 5 365
------------ ------------ -----------
Cash flows from investing
activities
Payment of deferred consideration (279) (325) (325)
Acquisition of intangible
assets (48) (63) (108)
Acquisition of property,
plant and equipment (31) (33) (66)
Net cash outflow from investing
activities (358) (421) (499)
------------ ------------ -----------
Cash flows from financing
activities
Increase in borrowings - - 7,700
Repayment of borrowings - (450) (5,650)
Repayment of lease liabilities (315) (372) (610)
Acquisition of non-controlling - - -
interest
Net cash outflow from financing
activities (315) (822) 1,440
------------ ------------ -----------
Net increase / (decrease)
in cash, cash equivalents
and bank overdrafts 1,048 (1,238) 1,306
Cash and cash equivalents
at beginning of period 1,996 690 690
------------ ------------ -----------
Cash and cash equivalents
at end of period 3,044 (548) 1,996
------------ ------------ -----------
Cash and cash equivalents
comprise:
Cash at bank and in hand 3,044 1 1,996
Bank overdrafts 8 - (549) -
------------ ------------ -----------
Cash and cash equivalents
at end of period 3,044 (548) 1,996
------------ ------------ -----------
# 2019 Interim cashflow
statement restated (see
note 4)
Consolidated statement of changes in equity
Foreign
Share Capital Share currency Equity
Share premium redemption Treasury option translation Retained attributable Non-controlling Total
capital account reserve Shares reserve reserve earnings to parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Balance at 31 March
2019
(audited) 34,992 10,088 125 (25) 838 - (15,889) 30,129 1,151 31,280
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Charge in respect
of share-based
payments - - - - (155) - - (155) - (155)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Transactions with
owners - - - - (155) - - (155) - (155)
Loss for the period - - - - - - (1,289) (1,289) 74 (1,215)
Retranslation of
foreign currency - - - - - (13) - (13) - (13)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Total comprehensive
income for the
period - - - - - (13) (1,289) (1,302) 74 (1,228)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Balance at 30
September
2019 (unaudited) 34,992 10,088 125 (25) 683 (13) (17,178) 28,672 1,225 29,897
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Charge in respect
of share-based
payments - - - - 178 - - 178 - 178
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Transactions with
owners - - - - 178 - - 178 - 178
Loss for the period - - - - - - (7,855) (7,855) 114 (7,741)
Transfer in relation
to lapsed share
options - - - - (165) - 165 - - -
Retranslation of
foreign currency - - - - - (142) - (142) - (142)
Total comprehensive
income for the
period - - - - (165) (142) (7,690) (7,997) 114 (7,883)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Balance at 31 March
2020 (audited) 34,992 10,088 125 (25) 696 (155) (24,868) 20,853 1,339 22,192
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Charge in respect
of share-based
payments - - - - (696) - - (696) - (696)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Transactions with
owners - - - - (696) - - (696) - (696)
Loss for the period - - - - - - (501) (501) 114 (387)
Transfer in relation
to lapsed share
options - - - - - - - - -
Retranslation of
foreign currency - - - - - 181 - 181 - 181
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Total comprehensive
income for the
period - - - - - 181 (501) (320) 114 (206)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Balance at 30
September
2020 (unaudited) 34,992 10,088 125 (25) - 26 (25,369) 19,837 1,453 21,290
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
1. General Information
Jaywing plc (the "Company") is incorporated and domiciled in the
United Kingdom. The Company is listed on the AIM market of the
London Stock Exchange. The registered address is Albert Works,
Sidney Street, Sheffield,
S1 4RG.
The interim financial information was approved for issue on 10
December 2020.
2. Basis of preparation
The consolidated interim financial statements for the six months
ended 30 September 2020, which are unaudited, have been prepared in
accordance with applicable accounting standards and under the
historical cost convention except for certain financial instruments
that are carried at fair value.
The financial information for the year ended 31 March 2020 set
out in this interim report does not constitute statutory accounts
as defined in Section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 March 2020
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified and did not
contain statements under Section 498 (2) or Section 498 (3) of the
Companies Act 2006. The report of the auditor did however draw
attention by way of emphasis, without qualifying the report, to the
material uncertainty due to Covid-19 identified by the directors in
relation to the going concern basis of preparation.
The consolidated interim financial information should be read in
conjunction with the annual financial statements for the year ended
31 March 2020, which have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
3. Accounting policies
The principal accounting policies of Jaywing plc and its
subsidiaries ("the Group") are consistent with those set out in the
Group's 2020 annual report and financial statements.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
4. Comparative Restatement
The amounts in the prior year consolidated balance sheet and
consolidated interim cash flow statement have been restated for
misstatements relating to the presentation of IFRS 16 lease
disclosures. These restatements have no effect on the Group's loss
or net assets in the prior period.
5. Segment information (unaudited)
Jaywing reports its business activities by net revenue in three
areas: Brand Performance, Online Performance and Data Science &
Analysis and by three main market facing sectors and groups. The
2019 results have been restated into the new segments.
Net Revenue by Segment
Six months ended Retail FMCG F&PS Total
30 Sept 2020
GBP'000 GBP'000 GBP'000 GBP'000
Brand Performance 643 1,488 661 2,792
Online Performance 2,478 902 682 4,062
Data Science
& Analysis 333 276 1,879 2,488
-------- -------- -------- --------
Total 3,454 2,666 3,222 9,342
-------- -------- -------- --------
Six months ended Retail FMCG F&PS Total
30 Sept 2019
GBP'000 GBP'000 GBP'000 GBP'000
Brand Performance 871 2,052 616 3,539
Online Performance 2,978 1,603 918 5,499
Data Science
& Analysis 449 415 2,094 2,958
-------- -------- -------- --------
Total 4,298 4,070 3,628 11,996
-------- -------- -------- --------
"Retail" includes: Retail, Travel & Leisure, Hospitality, Property & Utilities
"FMCG" includes: Consumer Goods, Industrial, Telecoms, Support
Services, Healthcare, Education, Public Sector & Non-Profit
"F&PS" includes: Financial & Professional Services
6. Other Operating Income
The group has been in receipt of various Government funds in the
period to 30 September 2020 relating to COVID-19 programs. The
amounts in Other Operating Income reflect income relating to the UK
Government's Coronavirus Job Retention Scheme, and the Australian
Government's Job Keepers and Cash flow Boost schemes.
7. Loss per share (unaudited)
Six months Six months Audited
ended ended year
30 Sept 30 Sept ended
2020 2019 31 March
2020
Pence
Pence Pence per
per share per share Share
Basic loss per share (0.54p) (1.38p) (9.95p)
Diluted loss per share (0.54p) (1.38p) (9.95p)
Loss per share has been calculated by dividing the loss
attributable to shareholders by the weighted average number of
ordinary shares in issue during the period. The calculations of
basic and diluted loss per share are:
Six months Six months Audited
ended ended year
30 Sept 30 Sept ended
2020 2019 31 March
2020
GBP'000 GBP'000 GBP'000
Loss for the period attributable
to shareholders (501) (1,289) (9,299)
Weighted average number of Number Number Number
ordinary shares in issue: '000 '000 '000
Basic 93,432 93,432 93,432
Adjustment for share options,
warrants and contingent
shares - 3,688 3,243
----------- ----------- ----------
Diluted 93,432 97,120 96,675
----------- ----------- ----------
8. Bank overdraft, borrowings and loans (unaudited)
Audited
30 Sept 30 Sept 31 March
2020 2019 2020
Summary GBP'000 GBP'000 GBP'000
Bank overdraft - 549 -
Borrowings, undiscounted
cash flows 8,175 5,200 7,939
-------- -------- ----------
8,175 5,749 7,939
-------- -------- ----------
Borrowings are repayable
as follows:
Within 1 year
Bank overdraft - 549 -
Borrowings 8,175 1,800 7,939
-------- -------- ----------
Total due within 1 year 8,175 2,349 7,939
In more than one year but - 3,400 -
less than two years
Total amount due 8,175 5,749 7,939
-------- -------- ----------
Average interest rates at % % %
the balance sheet date were:
Overdraft N/A 2.00 -
Term loan 5.10 4.05 5.42
As the loans are at variable market rates their carrying amount
is equivalent to their fair value.
A composite accounting system was set up with the Group's
bankers in the period ending 30 September 2019, which allowed debit
balances on overdraft to be offset across the Group with credit
balances.
Cash at
Reconciliation of net bank and
debt in hand Overdraft Borrowings Net debt
GBP'000 GBP'000 GBP'000 GBP'000
30 September 2020 3,044 - (8,175) (5,131)
31 March 2020 1,996 - (7,939) (5,943)
30 September 2019 1 (549) (5,200) (5,748)
---------- ---------- ----------- ---------
9. Share capital (unaudited)
Authorised:
45p deferred shares 5p ordinary shares
GBP'000 GBP'000
Authorised share capital
at 31 March 2020 and
30 September 2020 45,000 10,000
Allotted, issued and fully paid
45p deferred 5p ordinary
shares shares
Number Number GBP'000
Issued share capital
at 31 March 2020 and
30 September 2020 67,378,520 93,432,217 34,992
--------------- -------------- ----------
10. Related party transactions (unaudited)
There were no significant changes in the nature and size of
related party transactions for the period from those disclosed in
the Annual Report for the year ended 31 March 2020.
11. Post balance sheet event
On 21 October 2020, the business completed the acquisition of
the remaining 25% of the shares in Massive Group PTY Ltd ("Massive
Group") which were not already owned by Jaywing following the
exercise of the put option in relation to that 25% stake by
entities controlled by the two directors of Massive Group in
Australia. Jaywing now owns 100% of the shares in Massive Group,
which has traded as Jaywing Australia since 2017.
The 25% stake was acquired for $4.0m (GBP2.2m) and the total
consideration for the purchase of the 100% interest was $9.6m
(GBP5.4m).
On 8 October 2020, the Company's Performance Share Plan
terminated.
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