Jaywing plc Interim Results 2018/2019

20 November 2018 / Jaywing

Date:               19 November 2018

On behalf of:   Jaywing plc (“Jaywing”, “the Company” or “the Group”)

Embargoed:    0700 hrs 20 November 2018

 

Jaywing plc

Interim Results 2018/2019

 

Jaywing plc (AIM: JWNG) today announces its interim results for the six months ended 30 September 2018 (“H1”).

 

Financial highlights from continuing operations

 

 

6 months to 30 September 2018

£’000

6 months to 30 September 2017

£’000

Gross profit*

18,158

17,932

Adjusted EBITDA**

1,331

1,454

Adjusted EBITDA margin***

7.3%

8.0%

Loss after tax

(634)

(376)

Reported EPS

(0.68)p

(0.44)p

Net debt

7,132

8,083

 

* Revenue less direct costs of sale

** Before amortisation, share based charges, exceptional items and acquisition related costs

*** As a percentage of gross profit

 

Commenting on the results, Martin Boddy, Chairman of Jaywing plc, said:

 

“I am pleased to report solid progress in H1 18/19. 


We have seen growth in gross profit year on year, building sales momentum and recognising early stage benefits of cost realignment and debt reduction year on year. The disposal of our contact centre (HSM Limited), as announced by the Company this morning, is an important non-core asset disposal, which will allow management to concentrate entirely on developing its core business and will simplify the Jaywing offering. 

 

Following the disposal, we will operate as a consultancy, an agency and a technology business all under-pinned by data science. Our skill is to combine these to create solutions that our clients find indispensable.  We call this our “One Jaywing” model, a model which is now being utilised with over two thirds of our top 50 clients.  Our approach was recognised once again when Jaywing was awarded best large integrated agency in the Prolific North Awards for the second consecutive year in May 2018. It was also validated by major new business wins for SugarCRM and Hermes as well as growth in existing clients including Firstdirect.

 

We are seeing momentum build quarter on quarter this year, particularly in our performance marketing division, Epiphany.  The sales pipeline is also far stronger than at the same time last year and our churn rate is far lower. Our overall EBITDA margin, 7.3% H1 18/19, reflects the specific business mix in H1, and also does not yet capture the benefits of the cost base measures we have undertaken.  

 

The end of September represents the seasonal peak of our borrowing. However, net debt has reduced year on year. We successfully renegotiated our banking facilities in July and are comfortably within our covenants.

 

Jaywing has demonstrable value in its data science, digital marketing and marketing technology assets, and operates in market segments with significant growth potential. The disposal transaction of HSM Limited has multiple additional benefits: it strengthens our balance sheet; provides a sizeable and ongoing revenue stream; removes a lease obligation and provides better potential for significant improvement in margins.

 

Looking ahead to the remainder of H2, we don’t anticipate market conditions improving in the UK given the general level of uncertainty in the run up to the UK’s anticipated withdrawal from the European Union on 29 March 2019.  Fiscal Q4 (calendar Q1) has historically been a seasonally important period for the Company, due to the annual budgeting cycles of our clients, which are not expected to change.  Despite the market conditions, the Board believes that Jaywing’s differentiated offering makes it well placed to capitalise on growth opportunities in both the UK and Australia.”

 

 

 

 

Enquiries

Jaywing plc

Michael Sprot (CFO / Company Secretary)

Tel: 0114 281 1200

Cenkos Securities plc

Nicholas Wells/Callum Davidson

Tel: 020 7397 8900

 

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