Jaywing plc Interim Results 2020

10 December 2020 / Jaywing

Date:               10 December 2020

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

Embargoed:    0700 hrs on 10 December 2020

 

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 September 2020

£’000

6 months to 30 September 2019

 

£’000

Net Revenue*

9,342

11,996

Adjusted EBITDA**

Including IFRS 16

Excluding IFRS 16

 

1,389

1,034

 

(573)

(945)

Cash Generated from Operations

Including IFRS 16

Excluding IFRS 16

 

1,914

1,559

 

380

8

Net Debt (excluding IFRS 16) ***

(5,131)

(5,748)

 

Reconciliation of Operating Profit / (Loss) with Adjusted EBITDA

 

6 months to 30 September 2020 £’000

6 months to 30 September 2019 £’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

  • £2.0m improvement in adjusted EBITDA to £1.4m, compared with a £0.6m loss in the prior comparative period 
  • £1.9m cash generated from operations including IFRS 16 (£1.6m Excluding IFRS 16)
  • Reduction of net debt excluding IFRS 16 to (£5.1m)
  • 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 £1.4m of adjusted EBITDA for the half year period, compared with a loss of £0.6m 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 (£1.9m including IFRS16), enabling a reduction in net debt excluding IFRS 16 to (£5.1m). 

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 £32.7k in the first half, with an adjusted EBITDA of £5.1k 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 Secretary)

Tel: 0114 281 1200

Cenkos Securities plc

Nicholas Wells / Callum Davidson

Tel: 020 7397 8900


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