Jaywing plc Interim Results September 2021

Jaywing plc (AIM: JWNG), the integrated agency powered by data science, today announces its interim results for the six months ended 30 September 2021 (“H1”).

Financial Highlights 

Reconciliation of Operating Profit with Adjusted EBITDA

* Revenue less third-party direct costs of sale

** Adjusted EBITDA represents EBITDA before restructuring charges, impairment charges and share based payment credits

*** Including accrued interest

**** Impairment of historic trademark assets following brand integration under Jaywing during the period

*****In response to the Covid-19 pandemic there was a voluntary salary sacrifice scheme in the UK companies between April 2020 and August 2020 which reduced payroll costs by £749k

Operational Highlights

• 24% growth in Net Revenue vs prior period, with significant new business wins 
• £0.9m underlying improvement in Adjusted EBITDA excluding salary sacrifice and Covid-19 government support income
• £641k Cash Generated from Operations excluding salary sacrifice and Covid-19 government support income against a comparative of £566k

View the full pdf report.

Commenting on the results, Andrew Fryatt, CEO of Jaywing plc, said:

We are pleased to report Net Revenue growth of 24% in H1, returning to pre-pandemic levels, despite what continues to be a challenging market. Net Revenue per head increased by 22% year on year to £40k.  The business also achieved a significant improvement in underlying profitability, which has been somewhat masked by the impact of Covid-related support and salary sacrifice during 2020. Excluding these, EBITDA improved from £0.041m to £0.986m.

A highlight of the first half was taking on the marketing for Skipton Building Society, in addition to our existing relationship in Risk Consulting. We have also won new business in the UK from Cox Automotive, Rush Hair & Beauty, CityFibre, HSBC, Vive, and Avant Homes, along with contract extensions with major clients, including Secure Trust. In Australia, new business wins included AMP Capital, Perpetual and Narellan Pools.

The total number of clients generating revenue in the half increased from 200 to 211, led by growth in Retail and in Financial Services.

All three of our market facing sectors saw revenue growth (note 4), with Financial and Professional Services delivering our strongest year-on-year growth, at 41%, driven by additional client spend in the UK on Risk and Regulatory Consulting.

Within the UK, we have significantly increased the cross selling of services to clients across our two established business streams – Risk Consulting and Integrated Marketing, which overlap in the underlying role of Data Science. The application of Data Science techniques and technologies to marketing challenges is resonating strongly with both new and existing clients, supporting Jaywing’s distinctive positioning in our markets.  With global marketing spend expected to exceed 2019 this year, and digital spend now greater than all other channels combined, we are enabling our clients to move up the digital marketing maturity curve towards market leading positions.

In Australia, where the pandemic impact has mainly affected the labour market, Net Revenue grew by 55% year on year, with multiple new business wins. With the borders having been closed, wage inflation has been well above normal in the last 12 months, but this is expected to stabilise as the borders reopen. 

Through the half year we completed the final payments for the acquisition of the remaining 25% of Massive Group in Australia. On 2 November 2021 we announced that we have now taken full ownership of Frank Digital Pty Ltd for a final payment of AUS $1.2m (£0.7m), which will be paid in a series of monthly payments between now and 30 April 2022 from the surplus cash flows of the combined Australian businesses. We are moving ahead with integrating our two Australian companies as Jaywing Australia, focusing on continued revenue growth in a more efficient structure. 

The integration of the two Australian businesses will also enable us to present an integrated marketing proposition there, supported with Data Science from the UK.

Within the UK, we have consolidated all trading activities into Jaywing UK Limited to enable us to continue to focus on improving operating efficiencies. 

Our steady stream of new business wins gives us confidence that we can continue to drive further growth in both the UK and Australia, and we believe our integrated operating structures can now support much of that growth with existing resources. We continue to look for appropriate opportunities to improve our operating efficiency including reviewing our premises footprint in 2022 and consolidation of teams where possible.

Enquiries:  

Jaywing plc 

Christopher Hughes (Finance Director / Company Secretary) Tel: 0333 370 6500

Cenkos Securities plc 

Nicholas Wells / Callum Davidson (Nominated Adviser) Tel: 0207 397 8920