Jaywing plc ("Jaywing", "the Company")
Certain information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon publication of this Announcement, this information is now considered to be in the public domain.
Board Changes
Jaywing plc ("Jaywing", "the Company") announces the following changes to its Board of Directors. Andrew Fryatt, Chief Executive, has resigned and will step down from the Board with immediate effect. Christopher Hughes the Company’s CFO will expand his role to include operations as a combined COO and CFO, and he will join the Board with immediate effect. The Company has strong divisional leaders in the UK and Australia who will continue in their respective roles supported by the Board and Chris in his new and broader role.
David Beck joined the Board in April. In light of his relevant industry experience the Board has asked David to serve as Executive Chairman with immediate effect and take over the Chairmanship from Ian Robinson, who will remain on the Board as a Non- Executive Director.
Trading Update
Despite difficult market conditions in the year just ended the Company will report flat YoY revenue in FY24 on a constant currency basis, down slightly in real terms. The Australia division had a strong year with revenue growth of close to 30% in local currency. The financial year to 31 March 2024 ended with the winning of a number of major pieces of work across the UK and Australia including a significant piece of work in the UK from one of our existing Australian clients. The benefit of these new client wins, as well as the UK Agency cost reductions implemented in FY24, is expected to be seen in the financial year ended 31 March 2025. Conversely our UK Consulting division which had been trading very strongly for much of the last financial year reported an unexpectedly weak last quarter as scheduled work with a major customer did not materialise. This trend has continued in the first quarter of the current year.
The shortfall in UK Consulting revenues pending increased cash receipts from growing UK Agency revenues has increased the strain on the Company’s working capital. This, combined with some additional one off costs of further reducing ongoing operating expenses, means the Company intends to enter discussions with its two lenders, DSC Investment Holdings Limited and Lombard Odier Asset Management (Europe) Limited*, both of which are represented on the Board, regarding increasing the existing facility it has in place with them.
Whilst market conditions remain tough it is also true that the industry outlook is improving. We continue to focus on demonstrating the efficacy of our data led offering and are excited to see it resonating strongly with new and existing customers. This is a people business and it is gratifying for all involved to see their hard work and creative passion reflected in positive customer engagement. We will continue to seek operating efficiencies and opportunities for margin improvement and once we have normalised our working capital we are cautiously optimistic that our data science led client offerings, and the more aligned cost base, will deliver significantly improved financial results.
Conclusion of the Strategic Review
On 4th March 2024 the Company announced that, reflecting the Lenders desire to see the business recapitalised, the Company would explore all strategic options, including a possible sale of the Company. The very tough trading conditions over the last 2-3 years have begun to ease somewhat and the hard decisions on cost cutting taken by the Company, coupled with increased business confidence, give us some cause for optimism.
Whilst it is too early to predict any sustained recovery, the Board has concluded that seeking to crystallise value through a sale of the Company at this time is not in the interests of stakeholders. The Board will continue to focus on maximising value for shareholders. Accordingly, the Board has decided to terminate the Strategic Review under the City Code on Takeovers and Mergers (the "Takeover Code"). The Company is not in discussions with any party in relation to a sale and is not in receipt of any approaches. Accordingly, the Company is no longer in an offer period and the requirement to make disclosures under Rule 8 of the Takeover Code has now ceased.
Ian Robinson, Chairman, commented;
“Andrew has led the business through a challenging period and the Board would like to thank him for his contribution in his four years with the Group.
“After nearly three years with the Group Christopher Hughes is ready to step up to the COO role, the three CEO’s of the Group’s operating businesses will report to him. David Beck is an experienced executive with both relevant industry experience and a strong track record, he will focus on helping the executive team to build and grow the business.”
David Beck, commented;
“Whilst the Board will continue to benefit from Ian Robinson’s advice and guidance as a Non-Executive Director I would like to thank him for his stewardship of the Group in his period as Chairman. I look forward to working with the strong management teams we have in place in all divisions to take the business forward.”
*acting in its capacity as discretionary investment manager or sub-adviser for and on behalf of certain funds and accounts managed by it and/or as agent of Lombard Odier Asset Management (USA) Corp (LOAM USA) acting in its capacity as discretionary investment manager for and on behalf of certain funds and accounts managed by it ("Lombard Odier").
Schedule 2(g) disclosures
In accordance with Schedule 2(g) of the AIM Rules for Companies, Christopher Hughes (aged 39) has confirmed that he does not have any directorships/ partnerships to disclose.
Christopher Hughes holds options over 1,200,000 ordinary shares in the Company, as announced on 13 April 2023.
There are no further disclosures to be made under Schedule 2(g) of the AIM Rules for Companies.
For further information on the Company, please visit www.jaywing.com or contact:
Jaywing plc
David Beck (Chairman)
Christopher Hughes (Chief Financial Officer and Company Secretary)
T: +44 (0)333 370 6500
SPARK Advisory Partners Limited (Nominated and Financial Adviser)
Matt Davis / James Keeshan
T: +44 (0) 20 3368 3552
Turner Pope (Broker)
James Pope / Andy Thacker
T: +44 (0) 20 3657 0050