REG - Jaywing PLC - Board, Trading Update, Strategic Review Conclusion

JaywingAnnouncement

13/05/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240513:nRSM0679Oa&default-theme=true

RNS Number : 0679O  Jaywing PLC  13 May 2024

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.

Jaywing plc

("Jaywing" or the "Company")

Board changes, Trading Update and Conclusion of the Strategic Review

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 4(th) 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.

-Ends-

 For any further enquiries, please contact:

 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

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCUURSRSUUVAAR