REG - Jaywing PLC - Final Results
30/08/2024 07:00
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RNS Number : 2253C Jaywing PLC 30 August 2024
This announcement contains inside information
Jaywing plc
30 August 2024
Jaywing plc
("Jaywing" or "the Company")
Final Results and Publication of Annual Report
Jaywing Plc (AIM: JWNG), the Data Science and Marketing business, with
operations in the UK and Australia, announces its audited results for the year
ended 31 March 2024 and that a General Meeting will be held on Thursday 26th
September 2024 at the offices of Jaywing plc, Albert Works, Sidney Street,
Sheffield, S1 4RG at 2:00pm. The Company is today posting copies of the Annual
Report and Accounts to shareholders, an electronic copy of which is available
to view on the Company's website: www.jaywing.com/investors/
(http://www.jaywing.com/investors/)
Operational Highlights
· Group Adjusted EBITDA for FY24 up by 13.3% at £2,161k against
prior period, on 2.8% lower revenues.
· Australia profitability improved with FY24 Adjusted EBITDA up
91.7% % (107.6% at constant exchange rates) due to strong Australia revenue
growth of 17.8% ( 28.1% at constant exchange rates).
· AUD:GBP FX rate adversely impacted Group results. Under constant
exchange rates FY24 Group revenues were static compared to the prior year,
with Group Adjusted EBITDA up 17.7%.
· UK Adjusted EBITDA for FY24 down 16.7%, due to the difficult
economic conditions for the UK marketing sector.
· New business pipeline remains strong in both the UK and Australia
divisions.
· Decision (our AI-based PPC automation tool) is performing well
with 16 clients now on Decision, including 2 clients in Australia.
Financial highlights
2024 2023 Change
£'000 £'000 %
Revenue 21,454 22,062 (2.8%)
Adjusted EBITDA((1)) 2,161 1,908 13.3%
Operating Loss (459) (11,340)
Loss before Tax (2,376) (12,535)
Cash Generated from Operations 387 1,293
Net Debt pre IFRS 16((2)) (12,962) (10,346)
Loss per share (2.52p) (13.73p)
Reconciliation of Operating Loss with Adjusted EBITDA
2024 2023
£'000 £'000
Operating Loss (459) (11,340)
Add Back:
Impairment of Goodwill - 12,095
Depreciation of property, plant & equipment 237 245
Depreciation and impairment of right of use assets 626 641
Amortisation of intangibles 466 320
EBITDA 870 1,961
Acquisition & related costs - 259
Restructuring costs 1,668 190
Share based payment charge 25 -
Fair value adjustment on contingent consideration (402) -
Legal income - (502)
Adjusted EBITDA((1)) 2,161 1,908
Adjusted EBITDA((1)) margin 10.1% 8.6%
Revenue, Contribution and Adjusted EBITDA by operating segment
2024 2023 Change Change % at constant exchange rates*
£'000 £'000 % %
Revenue
United Kingdom 14,759 16,380 (9.9%) (9.9%)
Australia 6,695 5,682 17.8% 28.1%
Group total 21,454 22,062 (2.8%) (0.1%)
Contribution((3))
United Kingdom 4,286 4,886 (12.3%) (12.3%)
Australia 2,369 2,142 10.6% 20.4%
Group total 6,655 7,028 (5.3%) (2.3%)
Contribution margin 31.0% 31.9%
Adjusted EBITDA((1))
United Kingdom 1,149 1,380 (16.7%) (16.7%)
Australia 1,012 528 91.7% 107.6%
Group total 2,161 1,908 13.3% 17.7%
(1) Adjusted EBITDA represents Earnings Before Interest Tax, Depreciation
& Amortisation ('EBITDA') before restructuring costs, acquisition &
related costs, share based payment charge, fair value adjustments on
contingent consideration and exceptional other operating income
(2) Including accrued interest
(3) Contribution is defined as Revenue less Direct Costs comprising of staff
and other costs directly attributable to the revenues of the respective
operating segments
* At constant exchange rates applicable to the 12 months ended 31 March 2023.
David Beck, Executive Chairman, said:
"The Group has been undergoing a period of significant change and recovery
that started in the financial year ended 31 March 2024 (FY24) and has
continued since. The results for FY24 reflect some of the early progress made,
although the full impact of the actions taken to reduce the cost base will not
be felt until the current financial year.
The Australian division is expected to continue to benefit from a strong
market and new business pipeline, with revenue growth expected in the current
financial year. UK market conditions remain challenging but the UK operation
is now leaner, more efficient and able to convert more of its future revenue
growth into profit and cash. Changes to our leadership teams and a greater
focus on marketing of the Group's data and creative skills alongside
investments made in client growth, are beginning to make a difference to
operational performance. Cash however remains very tight and a key focus for
management. As the cash savings from recent cost reduction initiatives,
combined with the benefit of recent new business wins, begin to impact our
P&L we anticipate reaching a more stable cash position in the second half
of the current year."
Enquiries:
Jaywing plc: Devid Beck (Chairman) / Christopher Hughes (CFO/COO) Tel: 0333
370 6500
SPARK Advisory Partners Limited: Matt Davis / James Keeshan (Nominated
Adviser) Tel: 020 3368 3552
Chairman's Statement
Introduction
The Group has been undergoing a period of significant change and recovery that
started in the financial year ended 31 March 2024 (FY24) and has continued
since. The results for FY24 reflect some of the early progress made, although
the full impact of the actions taken to reduce the cost base will not be felt
until the current financial year.
The changes at Board level that have been undertaken since the year end; the
strong management teams in place within the operating business; and the
high-quality individual members of staff employed throughout the Group all
give us confidence in the future and our ability to grow the business. As the
relatively newly appointed Executive Chairman I would like to record my thanks
for the hard work and dedication of all our employees.
Results
In the first quarter of FY24 the Group carried out a significant restructuring
of the UK division to improve margin efficiency through cost reduction. The
work on cost reductions continued throughout the year and has allowed the
Group to report a 13.3% increase in Adjusted EBITDA despite a 2.8% reduction
in Group revenues.
Revenues for the Group for FY24 of £21.5m (2023: £22.1m), were 2.8% down on
FY23. The decrease in revenue in FY24 comprises a fall of 9.9% in UK revenues
(2023: fall of 9.5%) and a rise of 17.8% in Australia revenues (2023: increase
of 8.8%) The Australian revenue growth in FY24 in local currency was 28.1%.
The UK's revenues were affected by weaker markets whilst Australia's revenue
growth accelerated. Further detail on the Group's results is contained in the
Operational and Financial Report which follows.
Strategy
The Group is a data science led marketing and consultancy business; its people
are its most important assets. Whilst the difficult market conditions in FY24,
especially in the Group's UK market, have necessitated headcount reductions, a
priority has been placed on retaining the core skills and talent that mark
Jaywing out from its competition. The Group is dependent on the strength of
its relationships with its customers and the excellence of the work it
undertakes on their behalf. The Group will continue to invest in the talented
people that ensure its success in client service and delivery.
In a rapidly changing and increasingly technologically advanced market the
Group's expertise in data science, its long experience of Artificial
Intelligence tools and applications and its ability to convert data insights
into compelling marketing campaigns are core strengths. The Group aims to
maintain its lead in these core areas and use them to differentiate itself
from its competition.
The Group enjoys a diverse portfolio of world leading brands as clients. Our
sales and marketing strategy has been developed and enhanced to allow us to
continue to attract and win new business from brands for which we can deliver
excellent results.
The Group operates in two principal markets: the UK and Australia. The
Australian business has grown significantly in the last two years and has
started to expand its client base from within the wider APAC markets.
Geopolitical and economic changes make Australia an increasingly attractive
base from which to serve the APAC region and the strength of our Australian
team allows us to target further growth from region wide clients.
Funding
The Group has benefitted from the support of the holders of its secured debt,
who have helped fund the business through some challenging years. The Group
aims to continue its recovery and return to a more stable cash position in the
second half of the current financial year.
Board and senior management
In March 2024 we announced that Philip Hanson had stepped down as a
Non-Executive Director.
In April 2024 Henry Turcan and I joined the Company's board of directors as
Non-Executive Directors. Andrew Fryatt stepped down as the Chief Executive
Officer in May 2024 and Christopher Hughes, the Company's Chief Financial
Officer, role was expanded to include operations and he joined the Board. The
Board asked me to step up into the Executive Chairman role at that time. I
would like to thank the departing Directors for their contribution and also
Ian Robinson for his long service as Chairman, he remains on the Board as a
Non-Executive Director.
Outlook
The Australian division is expected to continue to benefit from a strong
market and new business pipeline, with revenue growth expected in the current
financial year. UK market conditions remain challenging but the UK operation
is now leaner, more efficient and able to convert more of its future revenue
growth into profit and cash. Changes to our leadership teams and a greater
focus on marketing of the Group's data and creative skills alongside
investments made in client growth, are beginning to make a difference to
operational performance. Cash however remains very tight and a key focus for
management. As the cash savings from recent cost reduction initiatives,
combined with the benefit of recent new business wins, begin to impact our
P&L we anticipate reaching a more stable cash position in the second half
of the current year.
David Beck
Executive Chairman
Jaywing plc
29 August 2024
Operational and Financial Report
Business review
Jaywing is a Data Science and Marketing business, with operations in the UK
and Australia. Our focus is providing an integrated marketing, data and risk
consulting proposition, enabled by data science, to our existing and potential
clients. The parent company acts as a holding company providing management
services to its subsidiaries.
The Group's adjusted EBITDA of £2.16m in FY24, an increase of 13.3% against
the prior period, was achieved despite 2.8% lower revenues. The Group's
Operating Loss was reduced to £0.5m from £11.3m in the prior year, and the
Loss before Tax came down to £2.4m from £12.6m.
Cash Generated from Operations decreased to £0.4m from £1.3m. Net debt (pre
IFRS 16) increased to £13.0m from £10.3m.
Challenging economic conditions, higher interest rates and falling consumer
confidence all contributed to a difficult trading period in the UK. Market
conditions in Australia were more favourable and helped our business there to
grow both revenue and profitability. UK revenue was 9.9% lower at £14.8m
whilst Australian revenue increased by 17.8% to £6.7m, at constant exchange
rates Australian revenue growth was an even more impressive 28.1%.
Market conditions were difficult for the whole of FY24 and although there have
been some significant new business wins at the end of the financial year,
trading conditions remain challenging going into FY25.
Jaywing UK
The Jaywing UK business is made up of our data led performance marketing
agency, our data and risk consultancy offering, and our AI driven digital
advertising tool, Decision.
Overall, the UK division saw a 9.9% reduction in revenue in the year ended 31
March 2024. This is predominantly from our UK agency division which
experienced a challenging year due to several sector macro-economic headwinds,
but benefited from our early action of headcount to ensure that we reduced our
FTE cost base by an annualised £1.6m. This allowed us to maintain an Adjusted
EBITDA margin of c. 8%, with the full benefit flowing into the new financial
year. The year ended positively with several client wins, most notably
becoming digital partner to Yorkshire Tea and winning the Online Education
Services contract in the UK.
Our data and risk consultancy business traded strongly for much of the year
ended 31 March 2024 following several good client wins, but had an
unexpectedly weak last quarter as scheduled work with a major customer did not
materialise with this trend continuing into the current year.
Decision is our award-winning Artificial Intelligence solution for online
marketing activity that Jaywing currently sells to clients which enables them
to automate Pay-Per-Click advertising management. Focus remains on
continuing to build the pipeline and conversion of opportunities.
The costs of running Decision are relatively fixed and the planned further
growth of Decision sales to existing and new customers is expected to help
improve Jaywing's overall margins as well as increase its recurring
revenues.
Jaywing Australia
Jaywing Australia continued their pleasing revenue growth with 28.1% local
currency growth in the year, stemmed from strong new business, most notably
OES, Crocs and New Balance which all ramped up during the year.
Pleasingly the growth in revenue flowed to Adjusted EBITDA that doubled under
constant currency in the year with the Adjusted EBITDA margin growing to 15%
EBITDA margin for the year ended 31 March 2024, up from 9% EBITDA margin in
the previous financial year.
Jaywing Australia was recognised externally for their work by winning the Best
Large Integrated Agency of the Year 2024 APAC Search Awards and Performance
Agency of the Year 2023 at the B&T Awards.
Technology research and development
We successfully completed our automation reporting project that is driving
greater efficiency and continue to build further Decision functionality to
increase scope of delivery as well as further developments to ensure we
continue to operate at the front of AI / Data Science. Progress has been
pleasing and we can already see the benefits from this work. Focus will
continue on increased automation to drive efficiency within delivery as well
as bringing additional benefits to our clients through our proprietary tools.
Employees
We recognise that our people are our most important asset. Jaywing prioritises
our people's health and wellbeing, a commitment solidified through significant
organisational changes over the past three years. Our guiding principles of
critical thinking, collaboration, and conviction shape our identity and
actions, integrating employee welfare as a core pillar of our ethos and
focusing on mental, physical, social, and financial wellbeing.
The Group's strategic initiatives include providing comprehensive support
programs like the My Health Advantage App, Bright TV for mental health
awareness. Additionally, Jaywing fosters a vibrant social culture with monthly
events, offers an Employee Support Fund for financial assistance, and ensures
work-life balance through its leave policies. The emphasis on diversity and
inclusion, coupled with a continued investment in wellbeing, underpins
Jaywing's supportive and inclusive workplace culture, resulting in enhanced
employee engagement and retention.
The great work our people have done to embed our culture has been recognised
by achieving Great Places to Work status in the UK. 79% of employees believe
Jaywing in the UK is a great place to work and 93% feel that people care about
each other. Furthermore, 98% believe that people are fairly treated regardless
of sexual orientation or race. Our diverse workforce includes 8% LGBTQ+
employees, a gender representation of 55% male and 45% female, and 12% of
employees with a disability. This diversity, coupled with a balanced age
distribution, underscores our inclusive culture.
I would like to thank all our colleagues in both the Australian and UK
businesses for their continuing outstanding contribution over the last 12
months.
Non-IFRS measures
The financial statements contain all the information and disclosures required
by the relevant accounting standards and regulatory obligations that apply to
the Group. The annual report and financial statements also include measures
which are not defined by generally accepted accounting principles such as
IFRS. We believe this information, along with comparable IFRS measures, is
useful as it provides investors with a basis for measuring the underlying
performance of the Group on a comparable basis. The Board and its executive
management use these financial measures to evaluate the Group's underlying
operating performance. Non-IFRS financial measures should not be considered in
isolation from, or as a substitute for, financial information presented in
compliance with IFRS. Similarly, non-IFRS measures as reported by us may not
be comparable with similar measures reported by other companies.
Key performance indicators used by the Board and executive managers include:
Group 2024 2023
£'000 £'000
Revenue 21,454 22,062
Adjusted EBITDA((1)) 2,161 1,908
Adjusted EBITDA % 10.1% 8.6%
Operating Loss (459) (11,340)
Loss before Tax (2,376) (12,535)
Net Debt pre IFRS16((2)) (12,962) (10,346)
Loss per share (2.52p) (13.73p)
Average headcount 266 285
Revenue per head 80.7 77.4
Cash generated from operations 387 1,293
(1) Adjusted EBITDA represents Earnings Before Interest Tax, Depreciation
& Amortisation ('EBITDA') before restructuring costs, acquisition &
related costs, share based payment charge, fair value adjustments on
contingent consideration and exceptional other operating income
(2) Including accrued interest
Revenue for FY24 was £21.5m (2023: £22.1m), a drop of 3% on FY23, as a
result of the tough UK economic conditions.
Adjusted EBITDA was £2,161k (2023: £1,908k), a £253k improvement in the
Adjusted EBITDA. The result was achieved through strong cost control and the
restructuring of UK agency including headcount reduction.
The statutory operating loss was £459k (2023: loss of £11,340k) and the
statutory loss before taxation was £2,376k (2023: loss of £12,535k)
following an impairment to Goodwill of £nil (2023: £12.1m).
Cash from operations was £387k (2023: £1,293k) reflecting tight cost control
across the group, offset by the cost of the restructuring. The Cash Flow
statement shows the movement in the cash position of the business.
Net Debt
At 31 March 2024, Net Debt including accrued interest (pre IFRS16) was £13.0m
(2023: £10.3m), representing gross debt of £13.4m (2023: £11.4m) net of
cash of £0.5m (2023: £1.1m). The Company's gross debt is represented by an
amount of £9.8m (2023: £9.2m) drawn down from the secured debt funding
provided by the "Jaywing Facility" together with £2.9m (2023: £1.8m) of
accrued and unpaid interest on the Jaywing Facility and £0.7m of withholding
tax on the interest expense (2023: £0.4m). The Jaywing Facility is fully
described in Note 18 and Note 30 to the Financial Statements.
On 4 March 2024 the Jaywing Facility was increased by £0.6m to £9.8m. The
Jaywing Facility has continued to be provided to the Company on the same terms
as the original secured loan facility acquired on 2 October 2019, see Going
Concern in Principal Accounting Policies.
Post year end, on the 28 May 2024 Jaywing announced that it had increased its
existing loan facility by £1,030,000. The additional capital being lent by
the two lenders is being provided on the same terms as the existing Loan
Facility.
Impairment
As required by IAS 36, the Group has carried out an impairment review of the
carrying value of its intangible assets and goodwill. The weighted average
cost of capital ("WACC") was calculated with reference to long-term market
costs of debt and equity and the Company's own cost of debt and equity,
adjusted for the size of the business and risk premiums. The calculated WACC
rate used for the impairment review was 14.8% for Australia and 15.1% in the
UK (2023: 16.4% for Australia and 16.6% in the UK). This was applied to cash
flows for each of the cash generating units using estimated growth rates in
each business unit. The impairment review was based on two cash generating
units being the UK and Australia. As part of the review, a number of scenarios
were calculated using the impairment model. These looked at what effect
changes in the WACC rates and movements in Revenue and Costs would have to the
outcome.
In the prior year the Group impaired former acquisition goodwill by £12.1m.
No impairment is considered necessary in the current year.
Going Concern
The Group financial statements have been prepared on a going concern basis in
accordance with UK Adopted International accounting standards. In coming to
their conclusion, the Directors have considered the Group's profit and cash
flow forecasts for a period of at least 12 months from the date these
financial statements were approved.
In determining the appropriate basis of preparation of the financial
statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
In addition to the normal process of preparing forecasts for the Group, the
Directors have considered downside risks and the potential impact of the
economic environment on the cash flows of the Group for a period to 31 March
2026. This has been done by looking at various scenarios within the forecasts
for the potential effect of changes in the market during the forecast period.
The Directors have noted the very tight cash position in the UK division which
has led to the Group's very tight cash position as a whole, which is expected
to continue in the near term. However, based on current forecast cash flows of
the Group, which includes forecast cash receipts from recent new business wins
in the UK, the Directors expect that the Group's cash headroom will steadily
improve in the second half of FY25 and provide a more stable cash position.
In considering their position the Directors have also had regard to:
· Letters of support in respect of the secured debt which have
received from each of the holders of that debt which include confirmation that
it is intended to provide financial support for the period until at least 31
March 2026 by not making demand for repayment of the debt, should doing so
prevent the Group from meeting its debts as and when they fall due. The
lenders have also confirmed that they are open to providing short-term
financial support to Jaywing if required to support its restructuring of the
existing facility with them. Details of this debt are contained in Note 18 and
Note 30.
· Near term support to the UK division by way of remittances from
the Australia division.
The Group financial statements do not include the adjustments that would
result if the Group were unable to continue as a going concern. The Directors
have a reasonable expectation that the Group has adequate resources to
continue in existence for the foreseeable future and have concluded it is
appropriate to adopt the going concern basis of accounting in the preparation
of the financial statements.
Christopher Hughes
Chief Financial & Operating Officer
Jaywing plc
29 August 2024
Principal Risks and Uncertainties
The evaluation of the Company's risk management process is the responsibility
of the Board. Jaywing has developed its risk reporting framework in
conjunction with the business leadership team who take an active and
responsible role in this process. Below is a summary of the current key risks.
Risk Mitigation
1. Economic and Political Uncertainty
There continues to be political and economic uncertainty which impact the The Directors monitor emerging news and trends and remain alert to any
level of discretionary spend available with our customers. potential impact on the trading of the Company. Regular forecasting and review
of pricing are undertaken to ensure we are responding to changes in the
economic environment. The directors also maintain a close control on costs,
reducing these to meet revenue where appropriate.
2. Loss of key staff
Jaywing is dependent on its ability to recruit and retain staff with adequate The expertise of Jaywing's people is a key source of competitive advantage and
experience and technical expertise to service its clients. the Company's remuneration and incentive packages are reviewed regularly to
retain and incentivise key staff. The Company also provides an attractive,
diverse, inclusive and collaborative working environment and culture.
3. Loss of business from clients and adverse economic environment
Loss of business from clients, whether due to the adverse economic environment The Company aims to minimise such losses by continuing to focus on providing a
or other reasons could lead to a reduction in overall revenue and high quality service to its clients at all times as well as offering a wide
profitability. range of services to existing clients and adding new clients through its new
business activities.
Jaywing has restructured its main business sectors based on clients and
markets with the aim of getting closer to each client with Jaywing's full
range of services tailored to their needs and the markets they operate in.
This has strengthened our ability to use our full range of services to offer
them relevant and effective solutions.
Jaywing's client concentration risk is low.
The impact of revenue losses due to an adverse economic environment, on
profitability, is mitigated by ensuring that the Company's cost base is
efficiently aligned with its revenues.
Inflation is monitored closely by the directors.
4. Changes in technology
The digital marketing industry is characterised by constant developments in Jaywing is committed to innovation in data science led products and services
technology, online media and data science. In this environment, it is vital to and has dedicated resources to this. The Company has close relationships with
be at the forefront of this change, to ensure Jaywing can provide the benefits online media owners (e.g. Google) and has early access to new product
of these changes in technology to its clients and remain competitive. developments as a consequence of the significant online media budgets that it
manages on behalf of its clients.
Artificial intelligence continues to grow and the directors monitor the
opportunities that this creates as well as any potential changes required to
our business model.
Jaywing also has a specialist team focused on the use of technology whose
brief is to keep themselves abreast of new developments through their own
research and through their relationships with technology providers.
5. Liquidity
Poor trading and cash flow performance could lead to a lack of ongoing support Jaywing's key financial measures are focussed on cash generation and net debt.
from its lenders and an inability to raise equity to meet the needs of the The Company monitors its trading and cash flow performance closely and takes
business. prompt action to mitigate any adverse trends. See commentary included in the
Strategic Report.
6. Compliance with regulations and changes in legislation
Failure to comply with regulations such as GDPR and changes in legislation Jaywing engages advisers in relevant specialisations to assist with compliance
could lead to reputational damage for Jaywing and its clients as well as fines in areas such as GDPR. Experts in Jaywing's business areas can ensure client
and loss of business. initiatives are all compliant, alongside external input where appropriate.
Section 172 statement
In making decisions over the year, the Directors have considered what would be
most likely to promote the success of the Company for the benefit of all
stakeholders and have had regard for the following:
· the likely long-term consequences of any decision;
· the interests of the Group's employees;
· the need to foster the Group's business relationships with
suppliers, customers and others;
· the impact of the Company's operations on the community and the
environment;
· the desirability of the Company maintaining a reputation for high
standards of business conduct; and the need to act fairly as between
shareholders of the Company.
· the needs to act fairly as between members of the Group.
In 2019 the Company adopted the Corporate Governance Code for Small and
Mid-Size Quoted Companies from the Quoted Companies Alliance (the "QCA Code").
The Board considers the QCA Code is an appropriate code of conduct for the
Company. There are details of how the Company applies the ten principles of
the QCA Code on the Company's investor website;
https://www.jaywing.com/investors/governance/. The Corporate Governance
Statement forms part of this report.
The Chairman's Statement and Operational and Financial Report describe the
Group's activities, strategy and future prospects, including the
considerations for long term decision making.
The Company considers that its major stakeholders are its employees, clients,
lenders and shareholders. When making decisions, the interests of these
stakeholders are considered informally as part of the Board's group
discussions.
The Company is committed to being a responsible employer and strives to create
a working environment where its employees are actively engaged and can
contribute to its success.
The Company understands the value of maintaining and developing relationships
with its clients and suppliers, to support its potential for future growth.
The Board does not believe that the Group has a significant impact on the
environments within which it operates. The Board recognises that the Group
has a duty to be responsible and is conscious that its business processes
minimise harm to the environment, and that it contributes as far as is
practicable to the local communities in which it operates. The Group's
Corporate and Social Responsibility Policy is available on the Group's
investor website and the SECR report for the Group is included in the
Directors Report.
The Board recognises the importance of maintaining high standards of business
conduct. The Group operates appropriate policies on business ethics and
provides mechanisms for whistle blowing and complaints which all employees are
aware of. These are maintained by the Policy Steering Committee.
The Board aims to maintain good relationships with its shareholders and treats
them equally.
By Order of the Board
David Beck
Executive Chairman
Jaywing plc
29 August 2024
Directors' Report
The Directors submit their Annual Report on the affairs of the Group and the
Company and the audited Financial Statements for the year ended 31 March 2024.
Board of Directors
David Beck, Executive Chairman (appointed 3 April 2024 as Non-Executive
Director, appointed Executive Chairman 13 May 2024)
Member of Nomination Committee
David was Chief Executive of Merit Group Plc, the data and intelligence
business, until 31 January 2024, where he led a successful restructuring and
turnaround of the business. Previously David spent over thirty years working
in the marketing communications industry advising large corporates on
strategic reviews and transactions. David was appointed to the Board as a
Non-Executive Director as a representative of DSC Investment Holdings Limited
("DSC"), a Company owned and controlled by Lord Ashcroft, which holds 50% of
the Company's outstanding Loan Facility. Following the departure of Andrew
Fryatt, the Group's CEO, the Board asked David to take on the role of
Executive Chairman.
Ian Robinson, Non-Executive Director
Chair of Audit & Risk Committee and member of Remuneration and Nomination
Committees
Ian is a Non-Executive Director and Chairman of the Audit Committee of
Gusbourne plc, an AIM listed English sparkling-wine business. He is also a
nonexecutive Director of a number of other privately-owned businesses. He is a
Fellow of the Institute of Chartered Accountants in England & Wales and
holds an honours degree in Economics from the University of Nottingham.
Henry Turcan, Non-Executive Director (appointed 3 April 2024)
Chair of Remuneration and Nomination Committees
Henry is a fund manager at Lombard Odier Asset Management (Europe) Limited. He
has been advising and investing in UK smaller companies for over 20 years and
has extensive experience of assisting public companies in creating value for
all stakeholders. Henry was appointed as a representative of Lombard Odier
Asset Management (Europe) Limited, acting in its capacity as discretionary
investment manager or sub-adviser for and on behalf of certain funds and
accounts managed by it which in aggregate hold 18.86% of the Company's issued
share capital and 50% of the Company's outstanding Loan Facility.
Mark Carrington, Non-Executive Director
Member of Audit & Risk Committee
Mark is a Fellow of the Association of Chartered Certified Accountants. He is
a Non-Executive Director of a number of privately-owned businesses both in the
UK and Overseas. He is also involved in the provision of management services
to a number of other privately-owned and AIM listed businesses.
Christopher Hughes, Chief Financial Officer (appointed 13 May 2024)
Christopher has extensive experience in financial roles having spent nearly
nine years at PwC, focusing on audit and four years at Lowell in various
finance roles, playing a key role in optimising financial processes and
driving business performance. Christopher is a member of the Institute of
Chartered Accountants in England and Wales and holds an honours degree in
Business Studies from Lancaster University.
Principal activity
The principal activity of the Group during the year under review is providing
agency and consulting services in the areas of creative and brand strategy,
performance marketing, data science and risk. The Company is a holding entity
for the Group.
Results and dividend
The Group's loss after taxation for the year ended 31 March 2024 was £2.4m
(2023: loss of £12.8m). The Directors do not propose to pay a dividend.
Net liabilities at 31 March 2024 were £3.7m (2023 Net liabilities £1.2m).
Future developments
The future developments of the Group are referred to in the Operational and
Financial Report.
Political and charitable donations
The Group made charitable donations of £3k (2023: £3k) and no political
donations during the current or prior year.
Directors' interests, appointments and resignations
The present membership of the Board, together with biographies on each, is set
out on page 12. The Directors' interests in shares in the Company are set out
in the Directors' remuneration report. A list of all Directors that served
throughout the year and after the period end is set out below:
David Beck (appointed 3 April 2024)
Ian Robinson
Henry Turcan (appointed 3 April 2024)
Mark Carrington
Christopher Hughes (appointed 13 May 2024)
Andrew Fryatt (resigned 13 May 2024)
Phillip Hanson (resigned 4 March 2024)
Directors' third-party indemnity provisions
The Group maintains appropriate insurance to cover Directors' and Officers'
liability. The Group provides an indemnity in respect of all the Group's
Directors. Neither the insurance nor the indemnity provides cover where the
Director has acted fraudulently or dishonestly.
Employees
The Group is an Equal Opportunities Employer and no job applicant or employee
receives more or less favourable treatment on the grounds of age, gender,
marital status, sexual orientation, race, colour, religion or belief.
It is the policy of the Group that individuals with disabilities, whether
registered or not, should receive full and fair consideration for all job
vacancies for which they are suitable applicants. Employees who become
disabled during their working life will be retained in employment wherever
possible and will be given help with any necessary rehabilitation and
retraining.
Employees of the Group are regularly consulted by local managers and kept
informed of matters affecting them and the overall development of the Group.
The Group is committed to maintaining high standards of Health and Safety for
its employees, customers, visitors, contractors and anyone affected by its
business activities. Health and Safety is on the agenda for all regularly
scheduled Board meetings.
Financial instruments
Details of the financial risk management objectives and policies of the Group,
including hedging policies, are given in Note 32 to the Consolidated Financial
Statements.
Share Capital
Details of the Company's Share Capital, including rights and obligations
attaching to each class of share, are set out in Note 22 of the Consolidated
Financial Statements.
There are no restrictions on the transfer of ordinary shares in the capital of
the Company, other than customary restrictions contained within the Company's
Articles of Association and certain restrictions which may be required from
time-to-time by law, for example, insider trading law. In accordance with the
Model Code, which forms part of the Listing Rules of the Financial Conduct
Authority, certain Directors and employees are required to seek the prior
approval of the Company to deal in its shares.
The Company is not aware of any agreements between shareholders that may
result in restrictions on the transfer of securities and/or voting rights. The
Company's Articles of Association contain limited restrictions on the exercise
of voting rights.
The Company's Articles of Association may only be amended by special
resolution at a General Meeting of shareholders.
Stakeholder engagement
Jaywing's stakeholders are an integral part of the business, they consist
---of customers, suppliers, employees, shareholders and advisors.
Details of how the Directors have engaged with these stakeholders are included
within the Corporate Governance Statement.
Streamlined Energy and Carbon Reporting (SECR)
We have disclosed our UK energy use and associated greenhouse gas (GHG)
emissions. Specifically, and as a minimum, we are required to report those GHG
emissions relating to natural gas, electricity and transport fuel, as well as
an intensity ratio, under the Streamlined Energy and Carbon Reporting (SECR)
Regulations.
To ensure we achieve the transparency required, and deliver effective
emissions management, we implement and utilise robust and accepted methods.
Accordingly, whilst the Regulations provide no prescribed methodology, we
collate our GHG data annually and complete the calculation of our carbon
footprint using the latest Defra (Department for Environment, Food and Rural
Affairs)/BEIS (Department for Business, Energy & Industrial Strategy)
emissions factors.
The period covered for the purposes of the SECR section is 1 April 2023 to 31
March 2024 and our calculations are for the following scope:
- Buildings- related energy - natural gas (Scope 1) and
electricity (Scope 2) and
- Employee owned vehicles (grey fleet) (Scope 3)
Calculation Methodology
The Jaywing GHG emissions were assessed in accordance with Defra's
'Environmental reporting guidelines: including Streamlined Energy and Carbon
Reporting Requirements' and use the 2023 emission factors developed by Defra
and BEIS.
Results
Element 2023/24 (tCO2e) 2022/23 (tCO2e)
Direct emissions (Scope 1) - natural gas and LPG 28 36
Indirect emissions (Scope 2) - from purchases electricity 37 42
Total tCO2e (Scope 1 & 2) 65 78
Other indirect emissions (Scope 3) - grey fleet travel 20 18
Gross Total Emissions 85 96
Intensity metric (Gross Emissions): Tonnes of CO2e per employee 0.32 0.34
Total energy consumption (kWh) 330,746 394,941
Energy Efficiency
As an office-based business, our environmental impact is low and our Corporate
Social Responsibility covers our approach to the environment and
sustainability.
At Jaywing, we
· encourage the use of public transport wherever possible, both
through our environmental policy and expenses policy, and where not possible,
encourage car sharing or environmentally friendly alternatives. We discourage,
where possible, the use of domestic flights
· operate a cycle to work scheme
· designed our head office to be as energy efficient as possible,
with measures such as passive-stack ventilation and a large amount of secure
cycle storage plus showering facilities to encourage cycling
· have switch off policies, including PIR activated lighting in
some buildings, as well as trying to use energy as efficiently as possible
· have a clear policy on the use of plastics, with particular
attention paid to single use plastics
· aim to recycle all waste material that can be recycled and use
local facilities to reduce the transportation of waste materials
· aim to purchase energy efficient, environmentally and
ecologically friendly products
· monitor our energy usage within our buildings.
All policies, including our environmental policy, are reviewed annually.
Going Concern
The Group financial statements have been prepared on a going concern basis in
accordance with UK Adopted International accounting standards. In coming to
their conclusion, the Directors have considered the Group's profit and cash
flow forecasts for period of at least 12 months from the date these financial
statements were approved.
In determining the appropriate basis of preparation of the financial
statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
In addition to the normal process of preparing forecasts for the Group, the
Directors have considered downside risks and the potential impact of the
economic environment on the cash flows of the Group for a period to 31 March
2026. This has been done by looking at various scenarios within the forecasts
for the potential effect of changes in the market during the forecast period.
The Directors have noted the very tight cash position in the UK division which
has led to the Group's very tight cash position as a whole, which is expected
to continue in the near term. However, based on current forecast cash flows of
the Group, which includes forecast cash receipts from recent new business wins
in the UK, the Directors expect that the Group's cash headroom will steadily
improve in the second half of FY25 and provide a more stable cash position.
In considering their position the Directors have also had regard to:
· Letters of support in respect of the secured debt which have
received from each of the holders of that debt which include confirmation that
it is intended to provide financial support for the period until at least 31
March 2026 by not making demand for repayment of the debt, should doing so
prevent the Group from meeting its debts as and when they fall due. The
lenders have also confirmed that they are open to providing short-term
financial support to Jaywing if required to support its restructuring of the
existing facility with them. Details of this debt are contained in Note 18 and
Note 30.
· Near term support to the UK division by way of remittances from
the Australia division.
The Group financial statements do not include the adjustments that would
result if the Group were unable to continue as a going concern. The Directors
have a reasonable expectation that the Group has adequate resources to
continue in existence for the foreseeable future and have concluded it is
appropriate to adopt the going concern basis of accounting in the preparation
of the financial statements.
Major interests in shares
As at 31 March 2024, the Company had been notified, in accordance with chapter
5 of the Disclosure and Transparency Rules, of the following voting rights as
shareholder of the Company:
2024 2023
Number of voting rights % %
Lord Michael Ashcroft KCMG PC 27,919,737 29.9 29.9
Lombard Odier Investment Managers Group 17,600,709 18.9 18.9
J & K Riddell 5,372,638 5.8 5.8
A Gardner 5,037,470 5.4 5.4
Bailey Family 4,687,500 5.0 5.0
Canaccord Genuity Group Inc 3,805,000 4.1 4.1
H & J Spinks 3,508,772 3.8 3.8
Miton UK Microcap Trust plc 2,771,035 3.0 3.0
M Boddy 2,701,667 2.9 3.6
The latest version of the above table is available at
https://investors.jaywing.com.
Corporate Social Responsibility
The Board recognises the importance of social, environmental and ethical
matters and it endeavours to take account of the interests of the Group's
stakeholders, including its investors, employees, clients, suppliers and
business partners when operating the business.
General Meeting
Your attention is drawn to the Notice of Meeting either enclosed with this
Annual Report or online at https://investors.jaywing.com, which sets out the
resolutions to be proposed at the forthcoming General Meeting.
Auditor
The Directors confirm that:
· so far as each Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
· the Directors have taken all the steps that they ought to have
taken as Directors, in order to make themselves aware of any relevant audit
information and to establish that the Company's auditor is aware of that
information.
This confirmation is given and should be interpreted in accordance with the
provisions of s418 of the Companies Act 2006.
The auditor, Cooper Parry Group Limited was appointed during the period and
has indicated its willingness to remain in office, and a resolution that it be
re-appointed will be proposed at the General Meeting.
By Order of the Board
David Beck
Director
Dated: 29 August 2024
Directors' Remuneration Report
In preparing this report, we have followed the QCA's Corporate Code of
Governance and drawn on best practice available.
The Remuneration Committee
During the year the Remuneration Committee comprised:
Philip Hanson (resigned 4 March 2024)
Ian Robinson
Mark Carrington
The Committee met twice during the year.
Post year end, Henry Turcan became a Non-Executive Director of the Company and
Chairman of the Remuneration Committee which now comprises:
Henry Turcan - Chairman (appointed 3 April 2024)
Ian Robinson
The Committee seeks input from the Company Secretary. The Committee makes
reference to external evidence of pay and employment conditions in other
companies and is free to seek advice from external advisers.
Remuneration policy
The Group's policy on remuneration for the current year and, so far as is
practicable, for subsequent years, is set out below. However, the Remuneration
Committee believes that it should retain the flexibility to adjust the
remuneration policy in accordance with the changing needs of the business. Any
changes in policy in subsequent years will be detailed in future reports on
remuneration. The Group must ensure that its remuneration arrangements attract
and retain people of the right calibre in order to ensure corporate success
and to enhance shareholder value. Its overall approach is to attract, develop,
motivate and retain talented people at all levels, by paying competitive
salaries and benefits to all its staff. Pay levels are set to take account of
contribution and individual performance, wage levels elsewhere in the Group,
and with reference to relevant market information. The Group seeks to reward
its employees fairly and give them the opportunity to increase their earnings
by linking pay to achieving business and individual performance targets.
Executive Directors are rewarded on the basis of individual responsibility,
competence and contribution, and salary increases also consider pay awards
made elsewhere in the Group as well as external market benchmarking.
During the year to 31 March 2024 there was one Executive Director on the Board
as follows:
Andrew Fryatt (Chief Executive) - resigned 13 May 2024
Post year end, David Beck became the Executive Chairman and Christopher Hughes
became an Executive Director.
The Executive Directors participate in a pension scheme but do not participate
in any Group healthcare arrangements.
Non-Executive Directors' fees
Fees for Non-Executive Directors are determined by the Board annually, taking
advice as appropriate and reflecting the time commitment and responsibilities
of the role. The Chairman received an annual fee of £75,000 (2023: £75,000).
Non-Executive Directors' fees currently comprise a basic fee of £30,000 per
annum plus a discretionary £10,000 for chairing a committee.
Non-Executive Directors do not participate in the annual bonus plan, pension
scheme or healthcare arrangements. The Company reimburses the reasonable
expenses they incur in carrying out their duties as Directors.
Remuneration components - Executive Directors
A proportion of each Executive Director's remuneration is performance related.
Basic salary
Basic salary is set by the Remuneration Committee by considering the
responsibilities, individual performance and experience of the Executive
Directors, as well as the market practice for executives in a similar position
and wage levels elsewhere in the Group. Basic salary is reviewed (but not
necessarily increased) annually by the Remuneration Committee.
Annual bonus plan
The Executive Directors are eligible to participate in the annual bonus plan.
The range of award is based on annual salary.
The performance requirements, for the ability to earn a bonus, are set by the
Committee annually.
Long Term Incentive Plan (LTIP) and Company Share Option Plan (CSOP)
On 13 April 2023, the Company granted 1,142,000 LTIP (Long Term Incentive
Plan) share options to Andrew Fryatt (CEO) and 4,640,000 CSOP (Company Share
Option Plan) options to certain senior employees of the Group. The total
number of Shares that can be acquired pursuant to options granted under the
LTIP and CSOP amounts to 5,782,000 Shares. See further details in note 10.
Upon Andrew's resignation post year end, his share options have lapsed.
Directors' remuneration
The total amounts of the remuneration of the Directors of the Group for the
years ended 31 March 2024 and 2023 are shown below:
31 March 2024 2023
£ £
Aggregate emoluments 345,000 341,677
Sums paid to third parties for Directors' services 30,000 30,000
375,000 371,677
The emoluments of the Directors are shown below:
31 March 2024 2023 2024 2023
Fees and salary Fees and salary Pension contributions Pension contributions
£ £ £ £
Andrew Fryatt Resigned 13 May 2024 230,000 226,667 9,200 9,067
Ian Robinson 75,000 75,000 - -
Philip Hanson Resigned 4 Mar 2024 40,000 40,000 - -
Mark Carrington* 30,000 30,000 - -
Total 375,000 371,667 9,200 9,067
* Fee paid to a third party for the Director's services
The salary of the highest paid Director was 4 times the average salary of all
Group employees excluding the Directors in the table above (2023: 4 times).
Pensions
The Group made pension contributions on behalf of the Executive Directors. The
amount is shown in the table above.
Directors' service agreements and letters of appointment
Contracts of service are negotiated on an individual basis as part of the
overall remuneration package. The contracts of service are not for a fixed
period. Details of these service contracts are set out below:
Date of contract Date of appointment Notice period Company with whom contracted
Andrew Fryatt (resigned 13 May 2024) 26 March 2020 21 April 2020 6 months Jaywing plc
Christopher Hughes 13 May 2024 13 May 2024 6 months Jaywing plc
David Beck 13 May 2024 13 May 2024 3 months Jaywing plc
In the event of termination of their contracts, each Director is entitled to
compensation equal to their basic salary and bonus for their notice period.
Non-Executive Directors have letters of appointment, the details of which are
as follows:
Date of contract Notice period Company with whom contracted
Ian Robinson 21 May 2014 3 months Jaywing plc
Philip Hanson (resigned 4 Mar 2024) 27 April 2017 3 months Jaywing plc
Mark Carrington 21 March 2018 3 months Jaywing plc
Henry Turcan 4 April 2024 3 months Jaywing plc
( )
Directors' interests in shares
The Directors' interests in the share capital of the Company are set out
below:
31 March 2024 2023
Number of shares Number of shares
Ian Robinson 470,267 470,267
Philip Hanson (resigned 4 Mar 2024) 109,462 109,462
Andrew Fryatt (resigned 13 May 2024) 120,993 120,993
Other related party transactions
No Director of the Group has, or had, a disclosable interest in any contract
of significance subsisting during or at the end of the year.
Disclosable transactions by the Company under IAS 24, Related Party
Disclosures, are set out in Note 30. There have been no other disclosable
transactions by the Company and its Subsidiaries with Directors of the Company
or any of the subsidiary companies and with substantial shareholders since the
publication of the last Annual Report.
By Order of the Board
Henry Turcan
Dated: 29 August 2024
Corporate Governance Statement
This report is prepared by the Board and describes how the principles of
corporate governance are applied, to the extent applicable for a company the
size of Jaywing plc. The Board has adopted the QCA Corporate Governance Code
and considers that the Company complies with each of the principles of the
Code. The following should be noted with regard to the independence of the
Company's Non-Executive Directors. During the year the Board considered Philip
Hanson, a Non-Executive Director, to be independent. The Board notes that Ian
Robinson and Mark Carrington are associated with one of the Company's major
shareholders which could appear to impair their independence for the purposes
of the Code. However, the Board considers that both Ian Robinson and Mark
Carrington can bring an independent view to bear on all matters dealt with by
the Board and its various Committees. Independence is a Board judgement.
There are details of how the Group applies the ten principles of the QCA Code
on the Group's investor website.
The Board
At 31 March 2024, the Board comprised Non-Executive Chairman Ian Robinson and
Non-Executive Director Mark Carrington. Andrew Fryatt was appointed to the
Board as Chief Executive Officer on 21 April 2020. The Board is responsible to
the shareholders for the proper management of the Group and meets at least six
times a year to set the overall direction and strategy of the Group. All
strategic operational and investment decisions are subject to Board approval.
On 4 March 2024 we announced that Philip Hanson had stepped down as a
Non-Executive Director & on 3 April 2024 we announced the appointment of
Henry Turcan and David Beck to the Company's board of directors as
Non-Executive Directors.
On 13 May 2024 we announced that Andrew Fryatt had stepped down as the Chief
Executive Officer, Christopher Hughes, the Company's Chief Financial Officer
will expand this role to include operations, and that he had joined the Board
with immediate effect. David Beck has stepped into the Executive Chairman role
and has taken over the Chairmanship from Ian Robinson, who remains on the
Board as a Non-Executive Director.
All Directors are subject to re-election at least every three years.
The Executive Chairman's role is to provide leadership to the Board, plan and
conduct Board meetings effectively, ensure the Board focuses on its key tasks,
and engage the Board in assessing and improving its performance.
Board committees
Remuneration Committee
During the financial year to 31 March 2024 the Remuneration Committee
comprised of Philip Hanson (Chair), Ian Robinson and Mark Carrington. The
Remuneration Committee, on behalf of the Board, meets at least once a year and
as and when necessary to review and approve as appropriate the contract terms,
remuneration and other benefits of the Executive Directors and senior
management and major remuneration plans for the Group as a whole.
The Remuneration Committee approves the setting of objectives for all the
Executive Directors and authorises their annual bonus payments for achievement
of objectives. The Remuneration Committee approves remuneration packages
sufficient to attract, retain and motivate Executive Directors required to run
the Group successfully, but does not aim to pay more than is necessary for
this service.
The Committee awarded share options to the Executive Directors during the
year. It has not awarded an annual bonus in respect of the year to 31 March
2024. Further details of the Group's policies on remuneration and service
contracts are given in the Directors' Remuneration report.
Audit & Risk Committee
During the financial year to 31 March 2024 the Audit & Risk Committee
comprised Ian Robinson (Chair), Mark Carrington and Philip Hanson. By
invitation, the meetings of the Audit & Risk Committee may be attended by
the other Directors and the auditor. The Committee meets not less than two
times annually. The Audit & Risk Committee oversees the monitoring of the
adequacy and effectiveness of the Group's internal controls, accounting
policies and financial reporting and provides a forum for reporting by the
Group's external auditor. Its duties include keeping under review the scope
and results of the audit and its cost effectiveness, consideration of
management's response to any major audit recommendations and the independence
and objectivity of the auditor.
The Audit & Risk Committee review the significant estimates, judgements
and risks in relation to the annual report and these are outlined in the
Strategic Report. The Committee also reviews the risks outlined in the
Principal Risks and Uncertainties and challenges the Executive Directors on
the controls and processes in place to manage these. The effectiveness of the
external audit process has been assessed through discussions with both
management and the auditors, and it is proposed that Cooper Parry Group
Limited be reappointed as external auditor.
Nomination Committee
During the financial year to 31 March 2024 the Nomination Committee comprised
Philip Hanson (Chair), Ian Robinson and Mark Carrington. It is responsible for
nominating to the Board candidates for appointment as Directors, having regard
for the balance and structure of the Board. The committee meets at least once
a year. The terms of reference for all committees are available on the Group's
website.
Company Secretary
The Company Secretary is responsible for advising the Board through the
Chairman on all governance issues. All Directors have access to the advice and
services of the Company Secretary.
Board performance and evaluation
In addition to the re-election of Directors every three years, the Board has a
process for evaluation of its own performance and that of its committees and
individual Directors, including the Chairman.
Attendance at Board and Committee meetings
The Directors attended the following Board and Committee meetings during the
year ended 31 March 2024:
Board Remuneration Audit & Risk Nomination
Total meetings held 12 1 3 1
Ian Robinson 12 1 3 1
Philip Hanson 11 1 3 1
Mark Carrington 12 1 3 1
Andrew Fryatt 12 0 3 1
Relationships with shareholders
The Board recognises the importance of effective communication with the
Company's shareholders to ensure that its strategy and performance is
understood and that it remains accountable to shareholders. The Company
communicates with investors through Interim Statements, audited Annual
Reports, press releases and the Company's website:
https://investors.jaywing.com. At the Company's AGM shareholders are given the
opportunity to question the Board. The Company obtains feedback from its
broker on the views of institutional investors on a non-attributed and
attributed basis and any concerns of major shareholders would be communicated
to the Board.
Internal controls
The Board acknowledges its responsibility for establishing and maintaining the
Group's system of internal controls and will continue to ensure that
management keeps these processes under regular review and improves them where
appropriate.
Management structure
There is a clearly defined organisational structure throughout the Group with
established lines of reporting and delegation of authority based on job
responsibilities and experience.
Financial reporting
Monthly management accounts provide relevant, reliable, up-to-date financial
and non-financial information to management and the Board. Annual plans,
forecasts and performance targets allow management to monitor the key business
and financial activities and the progress towards achieving the financial
objectives. The annual budget is approved by the Board.
Monitoring of controls
The Audit Committee receives reports from the external auditor and assures
itself that the internal control environment of the Group is operating
effectively. There are formal policies and procedures in place to ensure the
integrity and accuracy of the accounting records and to safeguard the Group's
assets. Significant capital projects and acquisitions and disposals require
Board approval.
Corporate Social Responsibility
The Board recognises the importance of social, environmental and ethical
matters and it endeavours to take into account the interests of the Group's
stakeholders, including its investors, employees, clients, suppliers and
business partners when operating the business.
Employment
At a subsidiary level, each individual company has established policies which
address key corporate objectives in the management of employee relations,
communication and employee involvement, training and personal development and
equal opportunity. The Board recognises its legal responsibility to ensure the
wellbeing, safety and welfare of its employees and to maintain a safe and
healthy working environment for them and for its visitors. Health and Safety
is on the agenda for regularly scheduled plc Board and Executive Team
meetings.
Environment
By their nature, the Group's regular operations are judged to have a low
environmental impact and are not expected to give rise to any significant
inherent environmental risks over the next 12 months.
By Order of the Board
David Beck
Dated: 29 August 2024
Directors' Responsibilities Statement
The directors are responsible for preparing the Strategic Report, Directors'
Report, the Directors' Remuneration Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have to prepare the Group
financial statements in accordance with UK-adopted international accounting
standards and applicable law, and they have elected to prepare the parent
company financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards and
applicable law, including FRS 101 'Reduced Disclosure Framework'.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs and profit or loss of the company and group for that period. In
preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· for the Group financial statement state whether applicable
UK-adopted international accounting standards have been followed, subject to
any material departures disclosed and explained in the financial statements;
· for the parent company state whether applicable UK Accounting
Standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
· prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company's transactions and disclose with
reasonable accuracy at any time the financial position of the company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors confirm that:
· so far as each director is aware, there is no relevant audit
information of which the company's auditor is unaware; and
· the directors have taken all the steps that they ought to
have taken as directors in order to make themselves aware of any relevant
audit information and to establish that the company's auditor is aware of that
information.
The directors are responsible for preparing the annual report in accordance
with applicable law and regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
By Order of the Board
David Beck
Dated: 29 August 2024
Consolidated Statement of Comprehensive Income
For the year ended 31 March
2024 2023
Note £'000 £'000
Revenue 1 21,454 22,062
Other operating income 2 33 507
Operating expenses 3 (21,946) (33,909)
Operating Loss (459) (11,340)
Finance costs 4 (1,917) (1,195)
(2,376) (12,535)
Loss before tax
Tax credit / (expense) 5 26 (291)
Loss for the year (2,350) (12,826)
Loss for the year is attributable to:
Non-controlling interests - -
Owners of the parent (2,350) (12,826)
(2,350) (12,826)
Other comprehensive income
27 (118) (368)
Items that will be subsequently reclassified to profit or loss
Exchange differences on retranslation of foreign operations
Total comprehensive loss for the period (2,468) (13,194)
Total comprehensive loss is attributable to:
Non-controlling interests 26 - -
Owners of the Parent (2,468) (13,194)
(2,468) (13,194)
Basic and diluted loss per share
Loss per share 6 (2.52p) (13.73p)
The accompanying Notes form part of these Consolidated Financial Statements.
Consolidated Balance Sheet
As at 31 March 2024 2023
Note £'000 £'000
Non-current assets
Property, plant and equipment 12 3,266 4,023
Goodwill 14 10,476 10,602
Deferred tax asset 20 916 620
Other intangible assets 15 1,796 2,125
16,454 17,370
Current assets
Trade and other receivables 16 3,929 4,418
Contract assets 17 330 352
Cash and cash equivalents 18 458 1,089
4,717 5,859
Total assets 21,171 23,229
Current liabilities
Borrowings 18 13,420 11,435
Trade and other payables 19 5,689 5,810
Contract liabilities 17 808 983
Current lease liabilities 13 382 380
Current tax liabilities 109 20
20,408 18,628
Non-current liabilities
Non-current lease liabilities 13 2,122 2,638
Provisions 21 570 570
Deferred tax liability 20 592 592
Trade and other payables 19 1,142 2,021
4,426 5,821
Total liabilities 24,834 24,449
Net liabilities (3,663) (1,220)
Equity
Equity attributable to owners of the parent
Share capital 22 34,992 34,992
Share premium 23 10,088 10,088
Capital redemption reserve 25 125 125
Treasury shares 24 (25) (25)
Foreign currency translation reserve 27 (368) (250)
Share option reserve 10 25 -
Retained earnings 28 (48,500) (46,150)
Equity attributable to owners of the parent (3,663) (1,220)
Non-controlling interest 26 - -
Total equity (3,663) (1,220)
These Financial Statements were approved by the Board of Directors on 29
August 2024 and were signed on its behalf by:
Christopher Hughes
Director
Company number: 05935923
The accompanying Notes form part of these Consolidated Financial Statements.
Consolidated Cash Flow Statement
For the year ended 31 March 2024 2023
Note £'000 £'000
Cash flow from operating activities
Loss after tax (2,350) (12,826)
Adjustments for:
Impairment of goodwill 3 - 12,095
Share based payment charges 10 25 -
Contingent consideration fair value adjustment 32 (402) -
Depreciation of property, plant & equipment 3 237 245
Depreciation and impairment of right of use assets 3 626 641
Amortisation of intangibles 3 466 320
Financial costs 4 1,917 1,195
Taxation (credit)/expense 5 (26) 291
Operating cash flow before changes in working capital 493 1,961
Decrease/(Increase) in trade and other receivables 464 1,986
(Decrease)/Increase in trade and other payables (570) (2,654)
Cash generated from operations 387 1,293
Interest paid (138) -
Net tax paid (142) (21)
Net cash flow from operating activities 107 1,272
Cash flow from investing activities
Payment of deferred consideration (392) (818)
Acquisition of intangibles 15 (137) (400)
Acquisition of property, plant and equipment 12 (106) (483)
Net cash outflow from investing activities (635) (1,701)
Cash flow from financing activities
Increase in borrowings 18 550 1,500
Repayment of lease liabilities (IFRS16) 18 (653) (696)
Net cash (outflow)/inflow from financing activities (103) 804
Net (decrease)/increase in cash and cash equivalents 18 (631) 375
Cash and cash equivalents at beginning of year 1,089 714
Cash and cash equivalents at end of year 458 1,089
Cash and cash equivalents comprise:
Cash at bank and in hand 458 1,089
The accompanying Notes form part of these Consolidated Financial Statements.
Consolidated Statement of Changes in Equity
Share Capital Share Premium Account Capital Redemption Reserve Treasury Shares Foreign Currency Translation Reserve Share Option Retained Earnings Equity attributable to parent Non-controlling Interest Total equity
Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2022 34,992 10,088 125 (25) 118 - (33,324) 11,974 - 11,974
Loss for the period - - - - - - (12,826) (12,826) - (12,286)
Retranslation of foreign currency - - - - (368) - - (368) - (368)
Total comprehensive income for the period - - - - (368) - (12,826) (13,194) - (13,194)
Balance at 31 March 2023 34,992 10,088 125 (25) (250) - (46,150) (1,220) - (1,220)
Loss for the period - - - - - - (2,350) (2,350) - (2,350)
Retranslation of foreign currency - - - - (118) - - (118) - (118)
Non-cash settled share based incentive plans - - - - - 25 - 25 - 25
Total comprehensive income for the period - - - - (118) 25 (2,350) (2,443) - (2,443)
Balance at 31 March 2024 34,992 10,088 125 (25) (368) 25 (48,500) (3,663) - (3,663)
The accompanying Notes form part of these Consolidated Financial Statements.
Principal Accounting Policies
Jaywing plc is a Company incorporated in the UK and is AIM listed.
The Consolidated Financial Statements consolidate those of Jaywing plc and its
subsidiaries (together referred to as the 'Group').
Statement of compliance
The Consolidated Financial Statements have been prepared and approved by the
Directors in accordance with UK Adopted International accounting standards.
The Consolidated Financial Statements have been prepared under the historical
cost convention, except for the revaluation of any assets and liabilities
carried at fair value.
Items included in both the consolidated and company financial statements are
measured using the currency of the primary economic environment in which the
Group operates ('the functional currency'). The financial statements are
presented in 'Pounds Sterling' rounded to the nearest thousand (£'000), which
is also the company's functional currency.
The principal accounting policies of the Group are set out below. The policies
have remained unchanged from the previous year.
Going concern
The Group financial statements have been prepared on a going concern basis in
accordance with UK Adopted International accounting standards. In coming to
their conclusion, the Directors have considered the Group's profit and cash
flow forecasts for period of at least 12 months from the date these financial
statements were approved.
In determining the appropriate basis of preparation of the financial
statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
In addition to the normal process of preparing forecasts for the Group, the
Directors have considered downside risks and the potential impact of the
economic environment on the cash flows of the Group for a period to 31 March
2026. This has been done by looking at various scenarios within the forecasts
for the potential effect of changes in the market during the forecast period.
The Directors have noted the very tight cash position in the UK division which
has led to the Group's very tight cash position as a whole, which is expected
to continue in the near term. However, based on current forecast cash flows of
the Group, which includes forecast cash receipts from recent new business wins
in the UK, the Directors expect that the Group's cash headroom will steadily
improve in the second half of FY25 and provide a more stable cash position.
In considering their position the Directors have also had regard to:
· Letters of support in respect of the secured debt which have
received from each of the holders of that debt which include confirmation that
it is intended to provide financial support for the period until at least 31
March 2026 by not making demand for repayment of the debt, should doing so
prevent the Group from meeting its debts as and when they fall due. The
lenders have also confirmed that they are open to providing short-term
financial support to Jaywing if required to support its restructuring of the
existing facility with them. Details of this debt are contained in Note 18 and
Note 30.
· Near term support to the UK division by way of remittances from
the Australia division.
The Group financial statements do not include the adjustments that would
result if the Group were unable to continue as a going concern. The Directors
have a reasonable expectation that the Group has adequate resources to
continue in existence for the foreseeable future and have concluded it is
appropriate to adopt the going concern basis of accounting in the preparation
of the financial statements.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the
Group has the rights to variable returns from its involvement with the
investee and has the ability to affect these returns through its power over
the investee. In assessing control, potential voting rights that are currently
exercisable or convertible are taken into account. The Financial Statements of
subsidiaries are included in the Consolidated Financial Statements from the
date that control commences until the date that control ceases. Transactions
between subsidiary companies are eliminated on consolidation.
Revenue
Revenue is generated mainly under the following four contractual models:
1. Monthly retainers
2. Project-based
3. Consulting day rates
4. Licences (with and without support)
To determine whether to recognise revenue, the Group follows a 5-step process:
1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognise revenue when the performance obligations are satisfied
The Group often enters into transactions involving a range of the Group's
products and services, for example providing a client with data consultancy
and brand development work. In all cases, the total transaction price for a
contract is allocated amongst the various performance obligations based on
their relative stand-alone selling prices.
Revenue is recognised over time, as the Group satisfies performance
obligations by transferring the promised goods or services to its customers in
accordance with IFRS15.35 (c).
The Group recognises contract liabilities for consideration received in
respect of unsatisfied performance obligations and reports these on the face
of the consolidated balance sheet. Similarly, if the Group satisfies a
performance obligation before it receives the consideration, the Group
recognises a receivable in its consolidated balance sheet as a contract asset.
Monthly retainers
A client will sign up to a contract for a period of between six and 18 months,
with a fixed fee each month for an agreed amount of work to be performed.
Under each contract, there may be more than one service provided to the
customer, such as Pay Per Click (PPC) and Search Engine Optimisation (SEO)
management. These will have agreed KPIs and are separately identifiable, hence
are identified as separate performance obligations. These services will be set
out in the contract with revenue amounts associated and the revenue streams
will be recognised separately. Most fees are fixed but some fees are variable
each month and are based on a ratchet scale calculation.
The transaction price is set out in the contract for each service provided and
revenue is allocated to the various performance obligations on this basis. The
customer may choose to take additional services for a period of time, which
would be subject to a separate agreement. Any performance fees payable under a
contract would relate to a specific month and be calculated in line with the
provisions set out in the contract.
Revenue is recognised over time as the customer simultaneously receives and
consumes the benefits of the services as the service is performed. It is
recognised using the output method, on a straight-line basis over the life of
the contract as the amount of work required to perform under these contracts
does not vary significantly from month to month, therefore the straight-line
method provides a faithful depiction of the transfer of goods or services.
Project-based
A client will enter into a framework agreement that covers all work performed
by Jaywing and will then issue a brief or work order for a specific piece of
work to be performed. This could be the development of a website for a client,
or the production of a creative campaign. The work would normally take a
period of between one and six months to complete.
Normally, a specific brief or work order is provided for a project under the
overall framework agreement. This will detail the services to be provided to
the customer, with a price set out against each element as appropriate. The
transaction price is set out in the work order for each element of the
project. Due to the high degree of interdependence between the various
elements of these projects, they are accounted for as a single performance
obligation.
The customer may choose to vary the scope at any stage, and that would be
subject to an updated work order. That work order would still be part of the
original contract as those services would not be distinct from those in the
original contract, hence this does not create a separate performance
obligation.
Revenue is recognised over time, using the input method as Jaywing's
performance creates or enhances an asset that the customer controls as the
asset is created or enhanced, and the revenue recognised reflects the efforts
or inputs Jaywing has made to the satisfaction of the performance obligation.
Consulting day rates
A client will enter into a contract for a piece of work that is quoted as a
number of days charged at a rate per day. This work will be either risk,
marketing or data based and could involve building models, databases and
analysis of data. There may be various elements to the work quoted, however
due to the high degree of interdependence between these, they are accounted
for as a single performance obligation. Invoices will usually be raised
monthly for the number of days of work performed.
A specific piece of work is contracted for, which will normally be a number of
days' work charged at a rate per day, with different rates for different
levels of seniority. The transaction price is set out in the contract. The
customer may choose to vary the scope at any stage, and that would be subject
to an updated work schedule. That work order would still be part of the
original contract as those services would not be distinct from those in the
original contract, hence this does not create a separate performance
obligation.
Revenue is recognised over time as the customer simultaneously receives and
consumes the benefit of the services as the services are performed. It is
recognised using the input method, based on the number of days' work performed
during the month.
Licences
A client enters into a contract for a product licence, including support from
Jaywing, to run that product and interpret the results from it. The product
and support are not separately identifiable because the client is not able to
operate the product licence without this support as they do not have the
skills or a login to the system. Therefore, they are accounted for together as
a single performance obligation. The license price is set out in the contract.
Revenue is recognised over time based on the provision of the licence and
support during the month as the customer simultaneously receives and consumes
the benefit of the services as the services are provided.
There are no differences in payment terms for each of these categories; the
only differences in payments terms are from individual terms agreed with
clients which are between 30 and 60 days.
Foreign currency
Foreign currency transactions are translated into the functional currency of
the respective Group entity, using the exchange rates prevailing at the dates
of the transactions (spot exchange rate). Foreign exchange gains and losses
resulting from the settlement of such transactions and from the remeasurement
of monetary items denominated in foreign currency at period-end exchange rates
are recognised in the statement of comprehensive income.
Non-monetary items are not retranslated at the period-end. They are measured
at historical cost (translated using the exchange rates at the transaction
date), except for non-monetary items measured at fair value which are
translated using the exchange rates at the date when fair value was
determined.
Classification of instruments issued by the Group
Instruments issued by the Group are treated as equity (i.e. forming part of
shareholders' funds) only to the extent that they meet the following two
conditions:
§ they include no contractual obligations upon the Company (or Group as the
case may be) to deliver cash or other financial assets, or to exchange
financial assets or financial liabilities with another party, under conditions
that are potentially unfavourable to the Company (or Group); and
§ where the instrument will or may be settled in the Company's own equity
instruments, it is either a non-derivative that includes no obligation to
deliver a variable number of the Company's own equity instruments, or is a
derivative that will be settled by the Company exchanging a fixed amount of
cash or other financial assets for a fixed number of its own equity
instruments.
To the extent that this definition is not met, the items are classified as a
financial liability. Where the instrument so classified takes the legal form
of the Company's own shares, the amounts presented in these Financial
Statements for called up Share Capital and Share Premium Account exclude
amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part
of finance expenses.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated
depreciation.
Where parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items of property, plant and
equipment.
Depreciation is charged to the statement of comprehensive income on a
straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment. Land is not depreciated. The estimated useful
lives are as follows:
Leasehold improvements - over period of
lease
Office equipment
- 3 - 5 years
Buildings (ROU assets) - over period
of lease
It has been assumed that all assets will be used until the end of their
economic life.
Gains or losses arising on the disposal of tangible assets are determined by
comparing the disposal proceeds with the carrying amount of the assets and are
recognised in the statement of comprehensive income.
Intangible assets and goodwill
All business combinations are accounted for by applying the acquisition
method. Goodwill represents the difference between the cost of the acquisition
and the fair value of the net identifiable assets acquired. Identifiable
intangibles are those that can be sold separately, or that arise from legal or
contractual rights, regardless of whether those rights are separable, and are
initially recognised at fair value. Development costs incurred in the year,
which meet the criteria of IAS 38, are capitalised and amortised on a
straight-line basis over their economic life.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is
allocated to cash-generating units and is not amortised but is tested annually
for impairment.
Other intangible assets that are acquired by the Group are stated at cost less
accumulated amortisation and accumulated impairment losses.
Intellectual property acquired in a business combination that qualifies for
separate recognition are recognised as
intangible assets at their fair values.
Amortisation is charged to the statement of comprehensive income on a
straight-line basis over the estimated useful lives of intangible assets,
unless such lives are indefinite. Intangible assets with an indefinite useful
life and goodwill are systematically tested for impairment at each balance
sheet date. Other intangible assets are amortised from the date they are
available for use.
The estimated useful lives are as follows:
Customer relationships - 4 to 12
years
Development costs - 3 to 6 years
Trademarks - 2 to 20
years
Order books - 1 year
Intellectual property - 5 years
Impairment
For goodwill that has an indefinite useful life, the recoverable amount is
estimated annually. For other assets, the recoverable amount is only estimated
when there is an indication that an impairment may have occurred. The
recoverable amount is the higher of fair value less costs to sell and value in
use. Value in use is determined by assessing net present value of the asset
based on future cash flows.
An impairment loss is recognised whenever the carrying amount of an asset or
its cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the statement of comprehensive income.
Impairment losses recognised in respect of cash-generating units, are
allocated first to reduce the carrying amount of any goodwill allocated to the
cash-generating unit and then to reduce the carrying amount of the other
assets in the unit on a pro rata basis. A cash generating unit is the smallest
identifiable group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets. With
the exception of goodwill, all assets are subsequently reassessed for
indications that an impairment loss previously recognised no longer exists.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial
instruments and non-financial assets, including contingent consideration. This
involves developing estimates and assumptions consistent with how market
participants would price the instrument. Management bases its assumptions on
observable data as far as possible, but this is not always available. In that
case, management uses the best information available. Estimated fair values
may vary from the actual prices that would be achieved in an arm's length
transaction at the reporting date (see contingent consideration accounting
policy).
Financial assets and financial liabilities measured at fair value in the
statement of financial position are grouped into three levels of a fair value
hierarchy. The three levels are defined based on the observability of
significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly
• Level 3: unobservable inputs for the asset or liability.
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are
recognised as an expense in the statement of comprehensive income as incurred.
Share-based payment transactions
The fair value for the share price options was calculated using the Monte
Carlo Model for the LTIP scheme and the
Black-Scholes model for CSOP scheme. This is charged to the statement of
comprehensive income over the vesting period of the award. The charge takes
account of the estimated number of shares that will vest. Where the options do
not have any market conditions attached, the number expected to vest is
reassessed at each reporting period. All share-based remuneration is
equity-settled.
Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
Dilapidations provision
Provision is made for expected future dilapidations costs in respect of
property held under leases. The estimated costs are capitalised within the
right of use asset and depreciated over the remaining lease term based on the
present value of expected future cash flows.
Leases
The Company reports using IFRS 16, whereby the Company recognises a lease
liability and a right of use asset.
The Group leases three offices and printers. The Group has elected not to
separate lease and non-lease components and instead accounts for these as a
single lease component. The lease agreements do not impose any covenants other
than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
• fixed payments (including in-substance fixed payments), less any lease
incentives receivable;
• variable lease payment that are based on an index or a rate, initially
measured using the index or rate as at the commencement date;
• amounts expected to be payable by the group under residual value
guarantees;
• the exercise price of a purchase option if the group is reasonably certain
to exercise that option; and
• payments of penalties for terminating the lease, if the lease term
reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability. The lease payments are
discounted using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases in the group,
the lessee's incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right of use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group, where possible, uses
recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party
financing was received.
If the Group is exposed to potential future increases in variable lease
payments based on an index or rate, which are not included in the lease
liability until they take effect, then when adjustments to lease payments
based on an index or rate take effect, the lease liability is reassessed and
adjusted against the right of use asset.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to the statement of comprehensive income over the lease period
so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period.
Right of use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease
incentives received;
• any initial direct costs; and
• restoration costs.
Right of use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the Group is
reasonably certain to exercise a purchase option, the right of use asset is
depreciated over the underlying asset's useful life.
Payments associated with short-term leases of equipment and all leases of
low-value assets are recognised on a straight-line basis as an expense in the
statement of comprehensive income. Short-term leases are leases with a lease
term of 12 months or less.
Incentives received to enter into an operating lease are credited to the
statement of comprehensive income, to reduce the lease expense, on a
straight-line basis over the period of the lease. Associated costs, such as
maintenance and insurance, are expensed as incurred.
Net financing costs
Net financing costs comprise interest payable and interest receivable on funds
invested, and withholding tax on borrowings interest expense. Interest income
and interest payable are recognised in the statement of comprehensive income
as they accrue using the effective interest method.
Taxation
Tax on the statement of comprehensive income for the year comprises current
and deferred tax. Tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income, or directly
in equity, in which case it is recognised in other comprehensive income or in
equity, respectively.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date,
and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes, except to the extent that it arises on:
· the initial recognition of goodwill;
· the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit other than in a business combination;
· differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.
Business combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair values of
assets transferred, liabilities incurred and the equity interests issued by
the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as
incurred.
Assets acquired and liabilities assumed are measured at their acquisition-date
fair values. See separate deferred and contingent consideration accounting
policy.
Intellectual property acquired in a business combination that qualifies for
separate recognition are recognised as intangible assets at their fair values.
Amortisation is charged to the statement of comprehensive income on a
straight-line basis over the estimated useful lives of intangible assets
unless such lives are indefinite. Other intangible assets are amortised from
the date they are available for use.
The estimated useful life for intellectual property is 5 years.
Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
Trade and other receivables and contract assets
Trade and other receivables and contract assets are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
IFRS 9's impairment requirements use more forward-looking information to
recognise expected credit losses - the 'expected credit loss (ECL) model'.
Recognition of credit losses is no longer dependent on the Group first
identifying a credit loss event. Instead the Group considers a broader range
of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable
forecasts that affect the expected collectability of the future cash flows of
the instrument.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected life of the
financial instrument.
Financial liabilities
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any difference
between cost and redemption value being recognised in the statement of
comprehensive income over the period of the borrowings on an effective
interest basis.
Deferred and contingent consideration
Deferred consideration is recorded at fair value and is estimated using a
present value technique, discounted at 3.5%, which is the risk free rate.
Contingent consideration is recorded at fair value using the
probability-weighted estimated future cash flows using a present value
technique. The consideration is discounted at 11.5% Weighted Average Cost of
Capital at the date of acquisition. The effects on the fair value of risk and
uncertainty in the future cash flows are dealt with by adjusting the estimated
cash flows rather than adjusting the discount rate.
Contingent consideration is a level 3 financial instrument, and is measured at
fair value through profit and loss. As such, at each reporting date the
contingent consideration is fair valued, with movement in the fair value taken
to the statement of comprehensive income
Trade and other payables
Trade payables are initially recorded at fair value and thereafter at
amortised cost using the effective interest rate method.
Segmental reporting
Internal reporting and monitoring by the Chief Operating Decision Maker (CODM)
is based on the location of the business, as such under IFRS 8 the two
operating segments of the business are deemed to be the results in respect of
the United Kingdom and Australia.
Share Capital
Share Capital represents the nominal value of shares that have been issued.
Share Premium
Share Premium includes any premiums received on issue of Share Capital. Any
transaction costs associated with the issuing of shares are deducted from
Share Premium, net of any related income tax benefits.
Capital Redemption Reserve
Capital Redemption Reserve represents the amount by which the nominal value of
the shares purchased or redeemed is greater than proceeds of a fresh issue of
shares.
Shares Purchased for Treasury
Represents the nominal value of the shares purchased by the Company.
Foreign Currency Translation Reserve
Represents the exchange differences on retranslation of foreign operations.
Earnings per Share
Earnings per share is calculated by taking the loss attributable to ordinary
equity holders by the weighted average number of ordinary shares outstanding
where loss making diluted earnings per share is equal to basic.
Retained Earnings
Retained Earnings includes all current and prior period retained profits and
share-based employee remuneration.
Non-controlling interests
The profit or loss attributable to the non-controlling ownership stakes in
subsidiary companies is transferred from Retained Earnings to non-controlling
interests each year.
Significant judgement in applying accounting policies and key estimation
uncertainty
When preparing the financial statements, management makes a number of
judgements, estimates and assumptions about the recognition and measurement of
assets, liabilities, income and expenses.
Accounting estimates and judgements
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions.
Judgements made by the Directors in the application of the accounting policies
that have a significant effect on the Consolidated Financial Statements,
together with estimates with a significant risk of material adjustment in the
next year, are discussed below.
Accounting estimates
Impairment of goodwill and other intangible assets
The carrying amount of goodwill is £10,476k (2023: £10,602) and the carrying
amount of other intangible assets is £1,796k (2023: £2,125k). The Directors
are confident that the carrying amount of goodwill and other intangible assets
is fairly stated and have carried out an impairment review. The forecast cash
generation for each CGU and the WACC represent significant assumptions and
should the assumptions prove to be incorrect, there would be a significant
risk of a material adjustment within the next financial year. The sensitivity
to the key assumptions is shown in Note 14.
Business combinations and Contingent Consideration
Management uses valuation techniques when determining the fair values of
certain assets and liabilities acquired in a business combination (see Note
32). In particular, the fair value of contingent consideration which is a
Level 3 Fair Value asset with movements through the statement of comprehensive
income and is dependent on the outcome of the acquirees' future revenues. The
key judgement relates to the 30% of estimated revenues in future periods and
the 11.5% discount rate used for which management undertake regular reviews of
forecasts and obtain external support for the WACC calculation (see Note 32).
Accounting judgements
Revenue
Recognition of revenue
The Directors consider that the Group acts as a principal in transactions
where the Group has control over the goods and services prior to being
transferred to the customer. Where this is via an agency arrangement and the
Group does not have full control over the goods and services, it recognises
gross billings as gross revenue, with the direct costs being deducted to
present the reportable revenue figure under IFRS 15. For other income sources,
revenue recognition is assessed in line with the five steps of IFRS. This
decision over the stage of completion, includes judgements made by management.
Identification of performance obligations
The determination of the number of distinct performance obligations in a
contract requires judgement, based on whether the customer can benefit from
use of the service on its own or together with other resources that are
readily available to it, and also whether the promise to transfer the service
is separately identifiable from other promises in the contract.
Allocation of the transaction price to performance obligations
Where a contract contains multiple performance obligations, the transaction
price is required to be allocated to the different performance obligations.
Wherever possible, the transaction price is allocated on a standalone selling
price basis, by reference to the agreed customer statement of works. In the
event that this is not available, the price is allocated to the various
performance obligations on a reasonable basis with reference to the expected
time involved in performing the service and management's experience of similar
projects.
Recognition of contract assets and liabilities
Contract assets related to the portion of performance obligations already
fulfilled by the Group and for which the definitive right to receive cash was
subject to completing further work under the relevant contract. Contract
assets are converted into trade receivables at the point that work delivered
to the client is invoiced resulting in the Group's unconditional right to
receive cash. Contract assets therefore represent a portion of future payments
receivable by the Group under existing contracts.
IFRS 16
Under IFRS 16 the Group is required to make a judgement in determining the
discount rate to be used in calculating the present value of lease payments
when recognising the lease liabilities and right of use asset. For the
discount rate the Group has used the lessee's incremental borrowing rate,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right of use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group, where possible, uses
recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party
financing was received.
The right of use asset is depreciated over the term of the lease. The term has
been determined with reference to the lease agreements and any expected
extension based on management's judgement beyond the end of the lease end date
specified in the lease agreement.
Notes to the Consolidated Financial Statements
1. Segmental analysis
The Group reports its operations based on location of the business (United
Kingdom & Australia).
The Group's Chief Operating Decision Maker (CODM) is its chief executive and
they monitor the performance of these operating segments as well as deciding
on the allocation of resources to them. Segmental performance is monitored
using adjusted segment operating results.
During the year, no customer accounted for greater than 10% of the Group's
revenue (2023: None).
Revenue, Contribution and Adjusted EBITDA by Operating Segments
2024 2023
Revenue: £'000 £'000
United Kingdom 14,759 16,380
Australia 6,695 5,682
Total 21,454 22,062
2024 2023
Contribution (1): £'000 £'000
United Kingdom 4,286 4,886
Australia 2,369 2,142
Total 6,655 7,028
2024 2023
Adjusted EBITDA (2): £'000 £'000
United Kingdom 1,149 1,380
Australia 1,012 528
Total 2,161 1,908
All revenue is recognised over time.
(1) Contribution is defined as Revenue less Direct Costs comprising of staff
and other costs directly attributable to the revenues of the respective
operating segments.
(2) Adjusted EBITDA represents Earnings Before Interest Tax, Depreciation
& Amortisation ('EBITDA') before restructuring costs, acquisition &
related costs, share based payment charge, fair value adjustments on
contingent consideration and exceptional legal income.
Non-current assets by Geographic Markets
The Group's non-current assets (other than financial instruments, investments
accounted for using the equity method, deferred tax assets and post-employment
benefit assets) are located into the following geographic markets:
2024 2023
£'000 £'000
United Kingdom 13,261 13,859
Australia 3,193 3,511
16,454 17,370
2. Other operating income
2024 2023
£'000 £'000
Other income 33 507
33 507
Within other income in 2023 is a settlement of £502k from the claimant, in
relation to the reimbursement of previously incurred legal costs following the
dismissal of the claimants' case in April 2022, associated with the 2016
acquisition of Bloom Media (UK) Limited.
3. Operating expenses
2024 2023
Continuing operations: £'000 £'000
Wages and salaries 14,579 14,210
Social Security Costs 1,364 1,306
Other Pension Costs 899 905
Share based payment expense 25 -
Impairment of Goodwill - 12,095
Depreciation of property, plant & equipment 237 245
Depreciation and impairment of right of use assets 626 641
Amortisation 466 320
Fair value adjustment on contingent consideration (402) -
Restructuring costs 1,668 190
Acquisition and related costs - 259
Other operating expenses 2,484 3,738
Total operating expenses 21,946 33,909
4. Finance costs
2024 2023
£'000 £'000
Interest expense on borrowings 1,160 748
Withholding tax on borrowings interest expense 274 180
Interest on lease liabilities (see note 13) 156 142
Interest on deferred and contingent consideration 188 125
Interest on VAT payment plan 66 -
Currency translation losses 73 -
Total 1,917 1,195
5. Tax credit
2024 2023
The tax (credit) / charge is based on the loss for the year and represents:
£'000 £'000
UK corporation tax at 25% (2023: 19%) 270 152
Adjustment for prior year - 198
Total current tax 270 350
Deferred tax:
Origination and reversal of timing differences (296) (59)
Total tax (credit) / charge (26) 291
2024 2023
The tax (credit) / charge can be explained as follows:
£'000 £'000
Loss before tax (2,376) (12,535)
Tax using the UK corporation tax rate of 25% (2023: 19%) (594) (2,382)
Effect of:
Recognition of previously unrecognised losses (271) (129)
Goodwill impairment - 2,298
Adjustment for prior year - 198
Non-deductible expenses 624 306
Other tax adjustments 215 -
Current year (credit) / charge (26) 291
6. Loss per share
2024 2023
Pence per Pence per
Share Share
Basic loss per share (2.52p) (13.73p)
Diluted loss per share (2.52p) (13.73p)
Loss per share has been calculated by dividing the loss attributable to
shareholders by the weighted average number of ordinary shares in issue during
the year.
The calculations of basic and diluted loss per share are:
2024 2023
£'000 £'000
Loss for the year attributable to shareholders (2,350) (12,826)
Weighted average number of ordinary shares in issue:
2024 2023
Number Number
Basic and diluted 93,432,217 93,432,217
7. Auditor's remuneration
2024 2023
£'000 £'000
Auditor's remuneration:
Audit of Company Financial Statements 50 48
Other amounts payable to the auditor and its associates in respect of:
Audit of Subsidiary Company Financial Statements 91 118
Audit related assurance services - 5
Taxation compliance services - 30
Amounts paid to the Group's auditor in respect of services to the Company,
other than the audit of the Company's Financial Statements, have not been
disclosed separately as the information is only required to be disclosed on a
consolidated basis.
8. Key management personnel compensation
Key management of the Group is considered to be the Board of Directors and the
Senior Leadership Team.
2024 2023
£'000 £'000
Short-term benefits:
Salaries including bonuses 1,610 1,513
Social security costs 185 190
Total short-term benefits 1,795 1,703
Share based payments 25 -
Defined contribution pension plan costs 49 53
Key management compensation 1,869 1,756
Further information in respect of Directors is given in the Directors'
Remuneration Report.
Remuneration in respect of Directors was as follows:
2024 2023
£'000 £'000
Emoluments receivable 345 342
Fees paid to third parties for Directors' services 30 30
Company pension contributions to money purchase pension schemes 9 9
384 381
During the current period and the prior year, there were no benefits accruing
to Directors in respect of the defined contribution pension scheme.
The highest paid Director received remuneration of £239k (2023: £236k).
9. Staff numbers and costs
The average number of persons employed by the Group (including Directors)
during the year, analysed by category, was as follows:
2024 2023
Number Number
Management and administration 30 34
Client Service Staff 236 251
266 285
The aggregate payroll costs of these persons were as follows:
2024 2023
£'000 £'000
Wages and salaries 14,579 14,210
Social security costs 1,364 1,306
Other pension costs 899 905
Share based payments 25 -
Total 16,867 16,421
10. Employee benefits
On 13 April 2023, the Company granted 1,142,000 LTIP (Long Term Incentive
Plan) share options to Andrew Fryatt (CEO) and 4,640,000 CSOP (Company Share
Option Plan) options to certain senior employees of the Group.
LTIP Options
The LTIP Options granted to Andrew Fryatt are subject to a minimum vesting
price of 10.0 pence per Share and an exercise price of 5.0 pence per Share.
The performance period for LTIP Options granted under the LTIP will typically
be four years commencing from the date of grant of the relevant LTIP Option.
However, in the case of Andrew Fryatt, in recognition of his service to the
Company since March 2020, 50% of the LTIP Options will vest and be exercisable
on or after the second anniversary of the date of grant, subject to and to the
extent that the performance conditions are met.
Except in the event of a change of control of the Company and in certain 'good
leaver' scenarios, LTIP Options may only be exercised after the expiry of the
performance period and to the extent that the relevant performance criterion
is met. Shares acquired on exercise of LTIP Options shall be subject to a
two-year holding period, during which time they cannot be sold, except in
certain circumstances including, but not limited to, the sale of Shares to
meet any tax liabilities arising upon exercise of the LTIP Options.
Upon Andrew Fryatt's resignation on the 13 May 2024, these LTIP options have
now lapsed.
CSOP
The market value CSOP Options were granted over a total of 4,640,000 Shares
with an exercise price of 5.0 pence per Share. The vesting period of the CSOP
Options shall be three years from the date of grant. Except in the event of a
change of control of the Company and in certain 'good leaver' scenarios, no
CSOP Options may be exercised prior to the expiry of the vesting period.
Shares acquired on exercise of the CSOP Options shall be subject to a holding
period of one year, during which time they cannot be sold, except in certain
circumstances including, but not limited to, the sale of Shares to cover the
exercise price payable upon exercise of the CSOP Options. No performance
conditions attach to the exercise of the CSOP Options.
Details of the share options outstanding at the end of the year are as
follows:
2024 2023
Number of Weighted Number of Weighted
share options average share options average
exercise exercise
price price
At start of the year - 5.0p - -
Issued during the year 5,782,000 5.0p - -
Exercised during the year - 5.0p - -
Lapsed during the year (240,000) 5.0p - -
At end of the year 5,542,000 5.0p - -
Exercisable at end of year - - - -
Charge to the statement of comprehensive income
Under IFRS 2, the Group is required to recognise an expense in the relevant
Company and Group's Financial Statements. The expense is apportioned over the
vesting period based upon the number of options which are expected to vest and
the fair value of those options at the date of grant.
For the awards made, the Group commissioned an independent valuation and
adopted their findings.
2024 2023
£'000 £'000
Share based compensation charge included in operating expenses 25 -
25 -
11. Non-controlling interests
The details of subsidiaries held directly by the Group are set out in Note 11
of the plc Parent Company accounts. After the acquisition of the remaining 25%
of Frank Digital PTY in November 2021 the Group includes no subsidiaries with
non-controlling interests (NCI):
Name Proportion of ownership interests and voting rights held by NCI Total comprehensive income allocated to NCI
Accumulated NCI
2024 2023 2024 2023 2024 2023
% % £'000 £'000 £'000 £'000
Frank Digital PTY - - - - - -
- - - -
No dividends were paid to the NCI during the financial years 2023 and 2022.
Jaywing plc acquired the remaining 25% of Frank Digital PTY on 2 November 2021
after the remaining shareholders exercised their put option. The 25% stake was
acquired for $1.2m (£0.7m), the total consideration for the purchase of the
100% interest was $3.0m (£1.7m). At 31 March 2022 an amount of £0.7m was
still outstanding to the original shareholders, this was fully paid by 31 July
2022.
12. Property, plant and equipment
ROU assets: Buildings Leasehold Total
improvements Office
equipment
£'000 £'000 £'000 £'000
Cost
At 31 March 2022 3,658 1,438 801 5,897
Additions - - 483 483
Right of use asset additions 2,253 - - 2,253
Disposals - - (283) (283)
At 31 March 2023 5,911 1,438 1,001 8,350
Additions - - 106 106
Disposals - - (238) (238)
At 31 March 2024 5,911 1,438 869 8,218
Depreciation
At 31 March 2022 1,998 1,227 499 3,724
Depreciation charge for the year - 64 181 245
Depreciation of right of use asset 588 - 53 641
Depreciation on disposals - - (283) (283)
At 31 March 2023 2,586 1,291 450 4,327
Depreciation charge for the year - 39 198 237
Depreciation of right of use asset 603 - 23 626
Depreciation on disposals - - (238) (238)
At 31 March 2024 3,189 1,330 433 4,952
Net book value
At 31 March 2024 2,722 108 436 3,266
At 31 March 2023 3,325 147 551 4,023
At 31 March 2022 1,660 211 302 2,173
The assets, excluding the right of use assets, are covered by a fixed charge
in favour of the Group's lenders.
13. Leases
The company has lease contracts for offices occupied and printers. The amounts
recognised in the financial statements in relation to the leases are as
follows:
(i) Amounts recognised in the consolidated balance sheet
The balance sheet shows the following amounts relating to leases:
2024 2023
£'000 £'000
Right of use assets (net book value)
Buildings 2,722 3,325
Office equipment 50 74
2,772 3,399
Lease liabilities
Current 382 380
Non-current 2,122 2,638
2,504 3,018
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to leases:
2024 2023
£'000 £'000
Depreciation and impairment charge of right of use assets
Buildings 603 588
Office equipment 23 53
626 641
Interest expense (included in finance cost) 156 142
There are no other amounts relating to low value or short term leases excluded
from the above amounts.
(iii) Future minimum lease payments
The lease liabilities are secured by the related underlying assets. Future
minimum lease payments at 31 March 2024 were as follows:
Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years After 5 years Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Lease Payments 533 674 619 220 220 744 3,030
Finance Charges (133) (109) (83) (52) (44) (85) (506)
Net present values 400 565 536 168 176 659 2,504
The Group has elected not to separate lease and non-lease components and
instead accounts for these as a single lease component. The lease agreements
do not impose any covenants other than the security interests in the leased
assets that are held by the lessor. Leased assets may not be used as security
for borrowing purposes.
14. Goodwill
Goodwill
£'000
Cost
At 31 March 2022 27,836
Recognition on acquisition 1,279
Foreign Exchange (287)
At 31 March 2023 28,828
Foreign Exchange (126)
At 31 March 2024 28,702
Impairment
At 31 March 2022 (6,131)
Impairment charge (12,095)
At 31 March 2023 (18,226)
Impairment charge -
At 31 March 2024 (18,226)
Net book value
At 31 March 2022 21,705
At 31 March 2023 10,602
At 31 March 2024 10,476
2024 2023
Goodwill by CGU
£'000 £'000
United Kingdom 7,926 7,926
Australia 2,550 2,676
10,476 10,602
Goodwill and other intangible assets have been tested for impairment by
assessing the value in use of the relevant cash generating units ("CGU"), the
cash generating units are measured at UK and Australia level as this is how
the Board review the trading positions. The value in use calculations were
based on projected cash flows into perpetuity. Budgeted cash flows for 2024/25
were haircut by applying a reduction in EBITDA, and used and extrapolated
based on the assumptions below.
The budget has been approved by management and the Board of Directors and is
based on a bottom-up assessment of costs and uses the known and estimated
revenue pipeline. The key assumptions are revenue growth, cost growth (and by
implication EBITDA) and the WACC. The average year-on-year growth that has
been used as the basis for forecasting cash flows for each of the cash
generating units when testing for impairment were:
Year-on-year growth
Revenue Costs
2024/25 to 2025/26 7.0% 6.0%
2025/26 to 2026/27 7.0% 6.0%
2026/27 to 2027/28 7.0% 6.0%
2027/28 to Perpetuity 3.0% 3.0%
The growth rates shown are the average applied to the cash flows of the
individual cash generating units and do not form a basis for estimating the
consolidated profits of the Group in the future. The growth rates used and the
periods they cover are based on an ability to deliver additional revenue
efficiently.
The discount rate used to test the cash generating units was the Group's
post-tax Weighted Average Cost of Capital ("WACC") of 15.1% for the UK and
14.8% for Australia (2023: 16.6% for the UK and 16.4% for Australia).
As part of the impairment review, several scenarios affecting the UK and
Australian CGUs were calculated, using the impairment model and applying
sensitivities to the key assumptions. These looked at what effect movements in
revenue and EBITDA would have on the outcome.
For the UK GCU:
· If there was no EBITDA growth from FY26 onwards there would be
headroom of £1.7m
· If revenues increase by 5%, direct costs increase by 2% but
indirect costs stay the same, this would provide headroom of £3.8m
For the Australian CGU:
· If there was no EBITDA growth from FY26 onwards there would be
headroom of £2.5m
· If there was no EBITDA growth from FY25 onwards there would be
headroom of £0.5m
As a result of the tests performed, management believes that an impairment is
not required for the goodwill in relation to the UK CGU (2023: £12.1m) or the
Australian CGU (2023: nil).
15. Other intangible assets
Customer Intellectual property Development Total
relationships Order books Trademarks costs
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 31 March 2022 21,305 1,457 1,080 - 1,421 25,263
Additions during the year (note 33) - - - 2,376 - 2,376
At 31 March 2023 21,305 1,457 1,080 2,376 1,421 27,639
Additions during the year - - - - 137 137
At 31 March 2024 21,305 1,457 1,080 2,376 1,558 27,776
Amortisation
At 31 March 2022 21,305 1,457 1,080 - 1,352 25,194
Amortisation charge for the year - - - 277 43 320
At 31 March 2023 21,305 1,457 1,080 277 1,395 25,514
Amortisation charge for the year - - - 425 41 466
At 31 March 2024 21,305 1,457 1,080 702 1,436 25,980
Net book amount
At 31 March 2024 - - - 1,674 122 1,796
At 31 March 2023 - - - 2,099 26 2,125
At 1 April 2022 - - - - 69 69
Development costs relate to internally developed products that are either sold
to clients standalone or used to provide services to them.
16. Trade and other receivables
2024 2023
£'000 £'000
Trade receivables 3,204 3,723
Prepayments 569 508
Other receivables 156 187
3,929 4,418
The carrying amount of trade and other receivables approximates to their fair
value. Detailed disclosures relating to credit risk exposures and analysis
relating to the allowance for expected credit losses are in Note 32.
17. Contract assets and liabilities
Contract assets
2024 2023
£'000 £'000
Accrued income 330 352
£'000
Contract assets as at 31 March 2023 352
Amounts billed on contract assets as at 31 March 2023 (352)
New contract assets recognised 330
Contract assets as at 31 March 2024 330
Contract assets related to the portion of performance obligations already
fulfilled by the Group and for which the definitive right to receive cash was
subject to completing further work under the relevant contract. Contract
assets are converted into trade receivables at the point that work delivered
to the client is invoiced resulting in the Group's unconditional right to
receive cash. Contract assets therefore represent a portion of future payments
receivable by the Group under existing contracts. There is a credit risk
associated with these assets.
Contract liabilities
2024 2023
£'000 £'000
Deferred income 808 983
£'000
Contract liabilities as at 31 March 2023 983
Revenue recognised in the year on contract liabilities as at 31 March 2023 (883)
New contract liabilities net of revenue recognised against these 708
Contract liabilities as at 31 March 2024 808
Contract liabilities consist of cash advances received from customers on
account of work orders received and the remaining liabilities relate to the
amount of performance obligations still to be fulfilled and for which payment
has already been received from the client.
Of the existing contracts that were unsatisfied or partially satisfied at 31
March 2024, revenue is expected to be recognised in the financial year to 31
March 2025.
18. Borrowings and Net Debt
2024 2023
£'000 £'000
Borrowings 13,420 11,435
% %
Average interest rates at the balance sheet date were: 12.36 8.57
As the loans are at variable market rates their carrying amount is equivalent
to their fair value.
The borrowings are repayable on demand and interest is calculated at 3 month
LIBOR plus a margin.
The borrowings are secured by charges over all the assets of Jaywing plc and
guarantees and charges over all of the assets of the various subsidiaries
(Jaywing UK Limited, Alphanumeric Limited, Gasbox Limited, Jaywing Central
Limited, Jaywing Innovation limited, Bloom Media (UK) Limited, Epiphany
Solutions limited, Jaywing Pty Limited, Frank Digital Pty Limited).
Reconciliation of net debt excluding lease liability and deferred
consideration
1 April 2023 Cash flow Draw down Non cash changes 31 March 2024
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 1,089 (631) - - 458
Borrowings (11,435) - (550) (1,435) (13,420)
Net debt excluding lease expense and deferred consideration (10,346) (631) (550) (1,435) (12,962)
Reconciliation of net debt
1 April 2023 Cash flows Draw down Non cash changes 31 March 2024
£'000 £'000 £'000 £'000 £'000
Borrowings (11,435) - (550) (1,435) (13,420)
Lease liability (3,018) 653 - (139) (2,504)
Deferred and contingent consideration (2,544) 392 - 214 (1,938)
Financial liabilities (16,997) 1,045 (550) (1,360) (17,862)
Cash and cash equivalents 1,089 (631) - - 458
Net debt (15,908) 414 (550) (1,360) (17,404)
19. Trade and other payables
2024 2023
£'000 £'000
Trade payables 2,035 2,169
Tax and social security 1,445 1,519
Accruals 686 946
Deferred consideration payable on acquisition of subsidiary undertakings 528 414
Contingent consideration payable on acquisition of subsidiary undertakings 268 109
Other payables 727 653
Trade and other payables due in less than one year 5,689 5,810
Deferred consideration payable on acquisition of subsidiary undertakings 393 770
Contingent consideration payable on acquisition of subsidiary undertakings 749 1,251
Trade and other payables due in greater than one year 1,142 2,021
The carrying amount of trade and other payables approximates to their fair
values. All amounts are short term.
* Included in other payables is £654k (2023: £539k) for media spend not yet
purchased but paid for by the customer.
20. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities:
2024 2023
£'000 £'000
Accelerated capital allowances on property, plant and equipment:
At start of year 630 10
Deferred tax on acquisition 254 661
Unwind of deferred tax on acquisition 33 (69)
Origination and reversal of temporary differences (17) 28
At end of year 900 630
Other temporary differences:
At start of year (703) (654)
Prior year adjustment (54) -
Origination and reversal of temporary differences (196) 80
Recognition of previously unrecognised losses (271) (129)
At end of year (1,224) (703)
Total deferred tax:
At start of year (28) (644)
Prior year adjustment 155 -
Deferred tax on additions 33 592
Origination and reversal of temporary differences (484) 24
At end of year (324) (28)
Origination on acquisition
Deferred tax is included within:
Deferred tax liability 592 592
Deferred tax asset (916) (620)
(324) (28)
There are no deductible differences or losses carried forward for which no
deferred tax asset is recognised.
Deferred tax assets are recognised to the extent that it is probable that the
underlying tax loss or deductible temporary difference will be utilised
against future taxable income. This is assessed based on the Group's forecast
of future operating results, adjusted for significant non-taxable income and
expenses and specific limits on the use of any unused tax loss or credit.
21. Provisions
The carrying amounts and the movement in the provision account are as follows:
Dilapidations
£'000
At 1 April 2023 and 31 March 2024 570
The dilapidations provision of £570k (2023: £570k) has been recognised
across the three offices in the UK and Australia.
The dilapidations provision will be settled at the end of the lease period for
the three offices, which is greater than one year for all.
22. Share capital
Authorised:
45p deferred shares 5p ordinary shares
Authorised share capital at 31 March 2023 and at 31 March 2024 45,000 10,000
Allotted, issued and fully paid
45p deferred shares 5p ordinary shares
Number Number £'000
At 31 March 2023 67,378,520 93,432,217 34,992
At 31 March 2024 67,378,520 93,432,217 34,992
The 5 pence ordinary shares have the same rights (including voting and
dividend rights and rights on a return of capital) as the previous 50 pence
ordinary shares. Holders of the 45 pence deferred shares do not have any right
to receive notice of any General Meeting of the Company or any right to
attend, speak or vote at any such meeting. The deferred shareholders are not
entitled to receive any dividend or other distribution and shall, on a return
of assets in a winding up of the Company, entitle the holders only to the
repayment of the amounts paid up on the shares, after the amount paid to the
holders of the new ordinary shares exceeds £1,000,000 per new ordinary share.
The deferred shares are also incapable of transfer and no share certificates
have been issued in respect of them.
23. Share premium
2024 2023
£'000 £'000
At start and end of year 10,088 10,088
Share Premium includes any premiums received on issue of Share Capital. Any
transaction costs associated with the issuing of shares are deducted from
Share Premium, net of any related income tax benefits.
24. Treasury shares
2024 2023
£'000 £'000
At start and end of year (99,622 shares) (25) (25)
Treasury shares represent the nominal value of the shares purchased by the
Company.
25. Capital redemption reserve
2024 2023
£'000 £'000
At start and end of year 125 125
Capital redemption reserve represents the amount by which the nominal value of
the shares purchased or redeemed is greater than proceeds of a fresh issue of
shares.
26. Non-controlling interest
2024 2023
£'000 £'000
At start of year - -
Acquisition of non-controlling interest (note 11) - -
Share of profit for the year - -
At end of year - -
The profit or loss attributable to the non-controlling ownership stakes in
subsidiary companies is transferred from retained earnings to non-controlling
interests each year.
27. Foreign currency translation reserve
2024 2023
£'000 £'000
At start of year (250) 118
Exchange differences on translation of foreign operations (118) (368)
At end of year (368) (250)
Foreign currency translation reserve represents the exchange differences on
retranslation of foreign operations.
28. Retained earnings
2024
2023
£'000 £'000
At start of year (46,150) (33,324)
Retained loss for the year (2,350) (12,826)
At end of year (48,500) (46,150)
Retained Earnings includes all current and prior period retained profits and
share-based employee remuneration.
29. Capital commitments
The Group had no commitments to purchase property, plant and equipment at 31
March 2024 or at 31 March 2023.
30. Related parties
The services of Mark Carrington as Non-Executive Director of the Company were
purchased from Deacon Street Partners Limited for a fee of £30,000 (2023:
£30,000). At the year end, £94,000 (2023: £52,500) was outstanding to
Deacon Street Partners Limited.
Ian Robinson (Non-Executive Chairman) is a Director of Gusbourne Estate
Limited, with which Jaywing commenced trading on an arm's length basis in H1
FY22. Gusbourne Estate Limited were invoiced £393k (2023: £498k) in the
year. As at 31 March 2024 there was a debtor's balance of £37k (2023: £49k).
On 2 October 2019 entities associated with two of its major shareholders (the
"Lenders") acquired the Company's existing secured loan facility of
£5,200,000 ("Jaywing Facility") The Lenders immediately provided the Company
with additional secured facilities by increasing the Jaywing Facility by
£3,000,000 to £8,200,000, which enabled the Company to repay its existing
outstanding overdraft and provide it with additional working capital. An
additional £500,000 and £1,000,000 was drawn down on the facility in FY23.
In FY24 and additional £550,000 was drawn down on the facility. The Jaywing
Facility has been provided to the Company on the same terms as those provided
by the previous lender. At the year-end £13,420k (2023: £11,435k) was
outstanding. Further details of these borrowings are provided in Note 18.
31. Standards and interpretations in issue at 31 March 2024 but not yet
effective
At the date of authorisation of these financial statements, several new, but
not yet effective, Standards and amendments to existing Standards, and
Interpretations have been published by the IASB. None of these Standards or
amendments to existing Standards have been adopted early by the Group. No new
standards have become effective in the current year. No amendments to existing
standards effective in the current year have had a material impact on the
financial statements.
Management anticipates that all relevant pronouncements will be adopted for
the first period beginning on or after the effective date of the
pronouncement. New Standards, amendments and Interpretations not adopted in
the current year have not been disclosed as they are not expected to have a
material impact on the Group's financial statements.
32. Financial risk management
The Group uses various financial instruments. These include loans, cash,
issued equity investments and various items, such as trade receivables and
trade payables that arise directly from its operations. The main purpose of
these financial instruments is to raise finance for the Group's operations.
The existence of these financial instruments exposes the Group to several
financial risks, which are described in more detail below. The main risks
arising from the Group's financial instruments are market risk, cash flow
interest rate risk, credit risk and liquidity risk. The Directors review and
agree policies for managing each of these risks and they are summarised below.
Market risk
Market risk encompasses three types of risk, being currency risk, fair value
interest rate risk and price risk. In this instance, price risk has been
ignored as it is not considered a material risk to the business. The Group's
policies for managing fair value interest rate risk are considered along with
those for managing cash flow interest rate risk and are set out in the
subsection entitled "interest rate risk" below.
Currency risk
The Group is only minimally exposed to translation and transaction foreign
exchange risk.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is
available to meet foreseeable needs by closely managing the cash balance and
by investing cash assets safely and profitably.
The Group policy throughout the period has been to ensure continuity of
funding.
Borrowings are repayable on demand.
Interest rate risk
The Group finances its operations through a mixture of cash, working capital
and borrowings. The Directors' policy to manage interest rate fluctuations is
to regularly review the costs of capital and the risks associated with each
class of capital, and to maintain an appropriate mix between fixed and
floating rate borrowings.
The interest rate exposure of the financial assets and liabilities of the
Group is shown in the table below. The table includes trade receivables and
payables as these do not attract interest and are therefore subject to fair
value interest rate risk.
2024 2023
£'000 £'000
Financial assets:
Floating interest rate:
Cash 458 1,089
Zero interest rate:
Trade receivables 3,204 3,723
3,662 4,812
Financial liabilities:
Floating interest rate:
Loans/revolving facility 13,420 11,435
Zero interest rate:
Trade payables 2,035 2,169
15,455 13,604
As at 31 March 2024, the Group's non-derivative financial liabilities have
contractual maturities (including interest payments where applicable) as
summarised below:
31 March 2024 Current Non-current
Within 6 months 6 to 12 months 1 to 5 years later than 5 years
£'000 £'000 £'000 £'000
Borrowings 13,420 - - -
Lease liabilities 191 191 1,648 474
Deferred consideration payable on acquisition of subsidiary undertakings 337 191 393 -
Contingent consideration payable on acquisition of subsidiary undertakings 156 112 749 -
Trade and other payables 5,701 - - -
Total amount due 19,805 494 2,790 474
This compares to the maturity of the Group's non-derivative financial
liabilities in the previous reporting period as follows:
31 March 2023 Current Non-current
Within 6 months 6 to 12 months 1 to 5 years later than 5 years
£'000 £'000 £'000 £'000
Borrowings 11,435 - - -
Lease liabilities 190 190 1,980 658
Deferred consideration payable on acquisition of subsidiary undertakings 231 183 770 -
Contingent consideration payable on acquisition of subsidiary undertakings 34 75 1,251 -
Trade and other payables 6,270 - - -
Total amount due 18,160 448 4,001 658
The above amounts reflect the contractual undiscounted cash flows, which may
differ from the carrying values of the liabilities at the reporting date.
Sensitivity to interest rate fluctuations
If the average interest rate payable on the net financial asset/net financial
liabilities, subject to a floating interest rate during the year, had been 1%
higher than reported on the average borrowings during the year, then loss
before tax would have been £116k (2023: £104k) lower, and if the interest
rate on these liabilities had been 1% lower, loss before tax would have
improved by £116k (2023: £104k).
Credit risk
The Group applies the IFRS 9 simplified model of recognising lifetime expected
credit losses for all trade receivables as these items do not have a
significant financing component.
In measuring the expected credit losses, the trade receivables have been
assessed on a collective basis as they possess shared credit risk
characteristics. They have been grouped based on the days past due and also
according to the geographical location of customers.
The expected loss rates are based on the payment profile for sales over the
past 48 months, as well as the corresponding historical credit losses during
that period. The historical rates are adjusted to reflect current and
forward-looking macroeconomic factors affecting the customer's ability to
settle the amount outstanding. The Group has identified gross domestic product
(GDP) and unemployment rates of the countries in which the customers are
domiciled to be the most relevant factors, and accordingly adjusts historical
loss rates for expected changes in these factors. However, given the short
period exposed to credit risk, the impact of these macroeconomic factors has
not been considered significant within the reporting period.
Trade receivables are written off (i.e. derecognised) when there is no
reasonable expectation of recovery. Failure to make payments within 180 days
from the invoice date and failure to engage with the Group on alternative
payment arrangement, amongst other things, are considered indicators of no
reasonable expectation of recovery.
The Directors consider that after review, the Group's trade receivables
require an impairment for the year ended 31 March 2024 of £65,000 (2023:
£82,000) which has been provided accordingly.
Summary of financial assets and liabilities by category
The carrying amount of financial assets and liabilities recognised at the
balance sheet date of the reporting periods under review may also be
categorised as follows:
2024 2023
£'000 £'000
Financial assets
Financial assets measured at amortised cost
Trade and other receivables 3,360 3,910
Cash and cash equivalents 458 1,089
3,818 4,999
Financial liabilities:
Financial liabilities measured at amortised cost
Borrowings (13,420) (11,435)
Lease liabilities (2,504) (3,018)
Deferred consideration payable on acquisition of subsidiary undertakings (921) (1,184)
Trade and other payables (5,701) (6,270)
Provisions for liabilities (570) (570)
Financial liabilities measured at fair value
Contingent consideration payable on acquisition of subsidiary undertakings (1,017) (1,360)
(24,133) (23,837)
Net financial assets and liabilities (20,315) (18,838)
Plant, property and equipment 3,266 4,023
Goodwill 10,476 10,602
Other intangible assets 1,796 2,125
Contract assets 330 352
Prepayments 569 508
Deferred tax asset 916 620
Deferred tax liability (592) (592)
Taxation (payable)/receivable (109) (20)
16,652 17,618
Total equity (3,663) (1,220)
Capital management policies and procedures
The Group's capital management objectives are:
§ to ensure the Group's ability to continue as a going concern; and
§ to provide an adequate return to shareholders by pricing products
and services commensurately with the level of risk.
This is achieved through close management of working capital and regular
reviews of pricing. Decisions on whether to raise funding using debt or equity
are made by the Board based on the requirements of the business.
Capital for the reporting period under review is summarised as follows:
2024 2023
£'000 £'000
Total equity (3,663) (1,220)
Financial assets and financial liabilities measured at fair value in the
statement of financial position are grouped into three levels of a fair value
hierarchy. The three levels are defined based on the observability of
significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly
• Level 3: unobservable inputs for the asset or liability.
Measurement of fair value of financial instruments
The Group's finance team performs valuations of financial items for financial
reporting purposes, including Level 3 fair values, in consultation with third
party valuation specialists for complex valuations. Valuation techniques are
selected based on the characteristics of each instrument, with the overall
objective of maximising the use of market-based information. The finance team
reports directly to the chief financial officer (CFO) and to the audit
committee. Valuation processes and fair value changes are discussed among the
audit committee and the valuation team at least every year, in line with the
Group's reporting dates.
The following table provides information about the sensitivity of the fair
value measurement to changes in the most significant inputs:
Description Significant unobservable input Estimate of the input Sensitivity of the fair value measurement to input
Contingent consideration Probability of meeting target 100% Sensitive to a fluctuation in expected revenues
There are no significant interrelationships between the inputs and the
unobservable inputs.
Level 3 fair value measurements
The reconciliation of the carrying amounts of financial instruments classified
within Level 3 is as follows:
Contingent Consideration
£'000
Balance at 31 March 2022 -
Amount recognised through acquisition 1,262
Interest expenses 98
Balance at 31 March 2023 1,360
Payments (90)
Interest expenses 149
Fair value adjustment (402)
Balance at 31 March 2024 1,017
33. Business combination in the prior year
On 26 August 2022 the group purchased 100% of the ordinary share capital of
Midisi Limited for consideration of £3.3m, before discounting.
The amounts below recognised in respect of the identifiable assets and
liabilities acquired are as set out in the table below:
Fair value on acquisition
£'000
Assets
Goodwill 1,279
Intangible assets (note 15) 2,376
3,655
Liabilities
Deferred tax (661)
Accruals (3)
Social security and other taxes (22)
(686)
Total identifiable net assets at fair value 2,969
Purchase consideration
Satisfied by:
Cash 400
Deferred consideration 1,307
Contingent consideration 1,262
Total consideration 2,969
The initial consideration for the acquisition was £0.4m which was paid from
Jaywing's existing cash resources. Further fixed payments totalling £1.4m
will be paid at 6-monthly intervals over 42 months, plus an additional
performance-related earn-out payable at 6-monthly intervals between months 13
and 49. The discounted deferred consideration outstanding at the year end is
£1.2m.
The earn-out relates to revenues generated from Midisi, and the maximum
earn-out payment is capped at £3.0m. Following the acquisition, the
incremental revenue contributions delivered by Midisi are estimated to be at
least £5.7m over 42 months, based on planned growth in the client base and
enhancements to other existing Jaywing services. This would generate earn-out
payments totalling £1.7m. The figures included in the table above are
recorded at present value.
34. Post balance sheet events
On the 28 May 2024 Jaywing announced that it had increased its existing loan
facility with the Company's two lenders, DSC Investment Holdings Limited and
Lombard Odier Asset Management (Europe) Limited by £1,030,000, which includes
an arrangement fee of £30,000 payable to the Lenders. The additional capital
being lent by the two lenders is being provided on the same terms as the
existing Loan Facility. The new funds, which will be used for working capital
purposes, are available in two equal tranches, the first of which was drawn
down in May 24 and the second was drawn down in June 24.
Company Financial Statements
Company Profit and Loss account
2024 2023
Note £'000 £'000
Turnover - -
Administrative expenses 2 (12,672) (10,275)
Operating loss (12,672) (10,275)
Other income 3 7,852 505
Finance Costs 4 (1,662) (1,100)
Loss before taxation (6,482) (10,870)
Taxation 5 326 125
Loss and total comprehensive loss after taxation (6,156) (10,745)
The accompanying Notes to the Parent Company Financial Statements form an
integral part of these Financial Statements.
Company Balance Sheet
2024 2023
Note £'000 £'000
Non-current assets
Tangible fixed assets 9 847 1,154
Deferred tax 21 1,043 717
Investments 11 8,601 20,457
10,491 22,328
Current assets
Cash at bank 13 1
Debtors due within one year 12 424 442
437 443
Current liabilities
Borrowings 16 (13,420) (11,435)
Creditors: amounts falling due within one year 13 (8,132) (14,757)
Total assets less current liabilities (10,624) (3,421)
Non-current liabilities
Creditors: amounts falling due after more than one year 14 (1,563) (2,625)
Provisions 15 (290) (290)
Net liabilities (12,477) (6,336)
Equity
Called up share capital 17 34,992 34,992
Share premium account 18 10,088 10,088
Treasury shares 19 (25) (25)
Share option reserve 20 15 -
Capital redemption reserve 18 125 125
Profit and loss account 18 (57,672) (51,516)
Total equity (12,477) (6,336)
The Financial Statements were approved by the Board of Directors and
authorised for issue on 29 August 2024.
Signed on behalf of the Board of Directors:
Christopher Hughes
Director
The accompanying Notes to the Parent Company Financial Statements form an
integral part of these Financial Statements.
Company Statement of Changes in Equity
Called-up Share Premium account Treasury Shares Share Option Reserve Capital Redemption Reserve Profit
Share and loss
Capital account Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2022 34,992 10,088 (25) - 125 (40,771) 4,409
Loss for the year and total other comprehensive income - - - - - (10,745) (10,745)
Total comprehensive income - - - - - (10,745) (10,745)
At 31 March 2023 34,992 10,088 (25) - 125 (51,516) (6,336)
At 1 April 2023 34,992 10,088 (25) - 125 (51,516) (6,336)
Loss for the year and total other comprehensive income - - - - - (6,156) (6,156)
Non-cash settled share based incentive plans - - - 15 - - 15
Total comprehensive income - - - 15 - (6,156) (6,141)
At 31 March 2024 34,992 10,088 (25) 15 125 (57,672) (12,477)
The accompanying Notes to the Parent Company Financial Statements form an
integral part of these Financial Statements.
Notes to the Parent Company Financial Statements
1. Accounting policies
Jaywing plc is incorporated in England and Wales.
Statement of compliance
These Financial Statements have been prepared in accordance with applicable
accounting standards and in accordance with Financial Reporting Standard 101 -
'The Reduced Disclosure Framework' (FRS 101). The principal accounting
policies adopted in the preparation of these Financial Statements are set out
below. These policies have all been applied consistently throughout the year
unless otherwise stated.
The Financial Statements have been prepared on a historical cost basis.
The Financial Statements are presented in Sterling (£) and have been
presented in round thousands (£'000).
Going concern
The Group financial statements have been prepared on a going concern basis in
accordance with UK Adopted International accounting standards. In coming to
their conclusion, the Directors have considered the Group's profit and cash
flow forecasts for period of at least 12 months from the date these financial
statements were approved.
In determining the appropriate basis of preparation of the financial
statements, the Directors are required to consider whether the Group can
continue in operational existence for the foreseeable future.
In addition to the normal process of preparing forecasts for the Group, the
Directors have considered downside risks and the potential impact of the
economic environment on the cash flows of the Group for a period to 31 March
2026. This has been done by looking at various scenarios within the forecasts
for the potential effect of changes in the market during the forecast period.
The Directors have noted the very tight cash position in the UK division which
has led to the Group's very tight cash position as a whole, which is expected
to continue in the near term. However, based on current forecast cash flows of
the Group, which includes forecast cash receipts from recent new business wins
in the UK, the Directors expect that the Group's cash headroom will steadily
improve in the second half of FY25 and provide a more stable cash position.
In considering their position the Directors have also had regard to:
· Letters of support in respect of the secured debt which have
received from each of the holders of that debt which include confirmation that
it is intended to provide financial support for the period until at least 31
March 2026 by not making demand for repayment of the debt, should doing so
prevent the Group from meeting its debts as and when they fall due. The
lenders have also confirmed that they are open to providing short-term
financial support to Jaywing if required to support its restructuring of the
existing facility with them. Details of this debt are contained in Note 18 and
Note 30.
· Near term support to the UK division by way of remittances from
the Australia division.
The Group financial statements do not include the adjustments that would
result if the Group were unable to continue as a going concern. The Directors
have a reasonable expectation that the Group has adequate resources to
continue in existence for the foreseeable future and have concluded it is
appropriate to adopt the going concern basis of accounting in the preparation
of the financial statements.
Disclosure exemptions adopted
In preparing these Financial Statements, the Company has taken advantage of
all disclosure exemptions conferred by FRS 101. Therefore, these Financial
Statements do not include:
1 A statement of cash flows and related notes
2 The requirement to produce a balance sheet at the
beginning of the earliest comparative period
3 The requirements of IAS 24 related party
disclosures to disclose related party transactions entered in to between
two or more members of the Group as they are
wholly owned within the Group
4 Presentation of comparative reconciliations for
property, plant and equipment, intangible assets
5 Capital management disclosures
6 Presentation of comparative reconciliation of the
number of shares outstanding at the beginning and at the end of the period
7 The effect of future accounting standards not
adopted
8 Certain share-based payment disclosures
9 Disclosures in relation to impairment of assets
10 Disclosures in respect of financial instruments
(other than disclosures required as a result of recording financial
instruments at fair value)
11 IFRS 9 disclosures in respect of allowances for
expected credit losses reconciliations and credit risk and hedge accounting
12. IFRS 15 disclosures in respect of disaggregation of
revenue, contract assets reconciliations and contract liabilities
reconciliation and unsatisfied performance obligations
Investments in Subsidiaries, Associates and Joint Ventures
Investments in Subsidiary undertakings are stated at cost less any applicable
provision for impairment.
In the previous year the trade and assets of subsidiary entities were
transferred within the Group. As the economic substance of the transaction did
not result in a loss of value, investments in subsidiaries have continued to
be held at their carrying value. An impairment review is performed annually in
line with IAS36. See valuation of investments in significant judgement and
estimates.
Tangible assets
Property, plant and equipment (PPE) is initially recognised at acquisition
cost or manufacturing cost, including any costs directly attributable to
bringing the assets to the location and condition necessary for them to be
capable of operating in the manner intended by the Company's management.
PPE is subsequently measured at cost less accumulated depreciation and
impairment losses.
Depreciation is recognised on a straight-line basis (unless otherwise stated)
to write down the cost less estimated residual value of PPE. The following
useful lives are applied:
- Leasehold improvements: 5-10 years
- Office equipment: 2-5 years
- Buildings (ROU assets): period of the lease
Material residual value estimates and estimates of useful life are updated as
required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are
determined as the difference between the disposal proceeds and the carrying
amount of the assets and are recognised in profit or loss within other income
or other expenses.
Financial Instruments - Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the financial instrument and
are measured initially at fair value adjusted for transaction costs, except
for those carried at fair value through profit or loss, which are measured
initially at fair value. Subsequent measurement of financial assets and
financial liabilities is described below.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred. A financial liability
is derecognised when it is extinguished, discharged, cancelled or expires.
Financial Instruments - Classification and subsequent measurement of financial
assets
For the purpose of subsequent measurement, financial assets, other than those
designated and effective as hedging instruments, are classified into the
following categories upon initial recognition:
• financial assets subsequently measured at
amortised costs
There are no financial assets that have been designated as fair value through
other comprehensive income, or fair value through profit or loss.
All financial assets are reviewed for impairment at least at each reporting
date, to identify whether there is any objective evidence that a financial
asset or a group of financial assets is impaired. Different criteria to
determine impairment are applied for each category of financial assets, which
are described below.
All income and expenses relating to financial assets that are recognised in
profit or loss are presented within finance costs, finance income or other
financial items, except for impairment of trade receivables which is presented
within other expenses.
IFRS 9's impairment requirements use more forward-looking information to
recognise expected credit losses - the 'expected credit loss (ECL) model'.
Recognition of credit losses is no longer dependent on the Company first
identifying a credit loss event. Instead the Company considers a broader range
of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable
forecasts that affect the expected collectability of the future cash flows of
the instrument.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected life of the
financial instrument.
Financial instruments - classification and subsequent measurement of financial
liabilities
The Company's financial liabilities include borrowings, trade creditors and
other creditors.
Financial liabilities are measured subsequently at amortised cost using the
effective interest method.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits, which is presented as cash at
bank and in hand in the Balance Sheet.
Cash equivalents comprise short-term, highly liquid investments with
maturities of three months or less from inception, that are readily
convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value. Cash equivalents are presented as part
of current asset investments in the Balance Sheet.
Leases
The Company reports using IFRS 16, whereby the Company now recognises a lease
liability and a right of use asset.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
• fixed payments (including in-substance fixed payments), less any lease
incentives receivable;
• variable lease payment that are based on an index or a rate, initially
measured using the index or rate as at the commencement date;
• amounts expected to be payable by the group under residual value
guarantees;
• the exercise price of a purchase option if the group is reasonably certain
to exercise that option; and
• payments of penalties for terminating the lease, if the lease term
reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability. The lease payments are
discounted using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases in the group,
the lessee's incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right of use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Company, where possible, uses
recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party
financing was received.
If the Company is exposed to potential future increases in variable lease
payments based on an index or rate, which are not included in the lease
liability until they take effect, then when adjustments to lease payments
based on an index or rate take effect, the lease liability is reassessed and
adjusted against the right of use asset.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
Right of use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease
incentives received;
• any initial direct costs; and
• restoration costs.
Right of use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the Company is
reasonably certain to exercise a purchase option, the right of use asset is
depreciated over the underlying asset's useful life.
Payments associated with short-term leases of equipment and all leases of
low-value assets are recognised on a straight-line basis as an expense in
profit or loss. Short-term leases are leases with a lease term of 12 months or
less.
See note 10.
Financial guarantees
Financial guarantees in respect of the borrowings of fellow Group companies
are not regarded as insurance contracts. They are recognised at fair value and
are subsequently measured at the higher of:
• the amount that would be required to be
provided under IAS 37 (see policy on provisions below); and
• the amount of any proceeds received net of
amortisation recognised as income.
Provisions, contingent assets and contingent liabilities
Provisions for product warranties, legal disputes, onerous contracts or other
claims are recognised when the Company has a present legal or constructive
obligation as a result of a past event, it is probable that an outflow of
economic resources will be required, and amounts can be estimated reliably.
The timing or amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the
restructuring exists and management has either communicated the plan's main
features to those affected or started implementation. Provisions are not
recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the
present obligation, based on the most reliable evidence available at the
reporting date, including the risks and uncertainties associated with the
present obligation. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. Where the time value of money
is material, provisions are discounted to their present values using a pre-tax
discount rate that reflects the current market assessment of the time value of
money and the risks specific to the liability.
Any reimbursement that is virtually certain to be collected from a third party
with respect to the obligation is recognised as a separate asset. However,
this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of
present obligations is not probable. Such situations are disclosed as
contingent liabilities unless the outflow of resources is remote.
Equity, reserves and dividend payments
Financial instruments issued by the Company are classified as equity only to
the extent that they do not meet the definition of a financial liability or
financial asset.
The Company's ordinary shares are classified as equity. Transaction costs on
the issue of shares are deducted from the Share Premium Account arising on
that issue. Dividends on the Company's ordinary shares are recognised directly
in equity.
Income
Interest receivable
Interest receivable is reported on an accrual basis using the effective
interest method.
Dividends receivable
Dividends are recognised at the time the right to receive payment is
established.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the
service or as incurred.
Foreign currency translation
Foreign currency transactions are translated into the Company's functional
currency using the exchange rates prevailing at the dates of the transactions
(spot exchange rate).
Foreign exchange gains and losses resulting from the re-measurement of
monetary items denominated in foreign currency at year-end exchange rates are
recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at
historical cost (translated using the exchange rates at the transaction date),
except for non-monetary items measured at fair value, which are translated
using the exchange rates at the date when fair value was determined. Where a
gain or loss on a non-monetary item is recognised in other comprehensive
income, the foreign exchange component of that gain or loss is also recognised
in other comprehensive income.
Income taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and
current tax not recognised in other comprehensive income or directly in
equity.
Calculation of current tax is based on tax rates and laws that have been
enacted or substantively enacted by the end of the reporting period. Deferred
income taxes are calculated using the liability method.
Calculation of deferred tax is based on tax rates and laws that have been
enacted or substantively enacted by the end of the reporting period, that are
expected to apply when the asset is realised, or the liability is settled.
The measurement of deferred tax reflects the tax consequences that would
follow from the manner in which the entity expects to recover the related
asset or settle the related obligation.
Deferred tax assets are recognised to the extent that it is probable that the
underlying tax loss or deductible temporary difference will be utilised
against future taxable income. This is assessed based on the Company's
forecast of future operating results, adjusted for significant non-taxable
income and expenses, and specific limits on the use of any unused tax loss or
credit. Deferred tax assets are not discounted.
Deferred tax liabilities are generally recognised in full, with the exception
of the following:
• on the initial recognition of goodwill on
investments in Subsidiaries, where the Company is able to control the timing
of the reversal of the difference, and it is probable that the difference will
not reverse in the foreseeable future, on the initial recognition of a
transaction that is not a business combination and at the time of the
transaction affects neither accounting nor taxable profit.
Deferred tax liabilities are not discounted.
Deferred and contingent consideration
Deferred consideration is recorded at amortised costs and is estimated using a
present value technique, discounted at 3.5%, which is the risk free rate.
Contingent consideration is recorded at fair value using the
probability-weighted estimated future cash flows using a present value
technique. The consideration is discounted at 11.5% which is the prior year
Weighted Average Cost of Capital. The effects on the fair value of risk and
uncertainty in the future cash flows are dealt with by adjusting the estimated
cash flows rather than adjusting the discount rate.
Post-employment benefits and short-term employee benefits
Short-term employee benefits
Short-term employee benefits, including holiday entitlement, are current
liabilities included in pension and other employee obligations, measured at
the undiscounted amount that the Company expects to pay as a result of unused
entitlement.
Post-employment benefit plans
Contributions to defined contribution pension schemes are charged to profit or
loss in the year to which they relate. Prepaid contributions are recognised as
an asset. Unpaid contributions are reflected as a liability.
Share based payment transactions
The fair value for the share price options was calculated using the Monte
Carlo Model for the LTIP scheme and the
Black-Scholes model for CSOP scheme. This is charged to profit or loss over
the vesting period of the award. The charge to profit or loss takes account of
the estimated number of shares that will vest. Where the options do not have
any market conditions attached, the number expected to vest is reassessed at
each reporting period. All share-based remuneration is equity-settled.
Profit from operations
Profit from operations comprises the results of the Company before interest
receivable and similar income, interest payable and similar charges,
corporation tax and deferred tax.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial
instruments and non-financial assets. This involves developing estimates and
assumptions consistent with how market participants would price the
instrument. Management bases its assumptions on observable data as far as
possible, but this is not always available. In that case, management uses the
best information available. Estimated fair values may vary from the actual
prices that would be achieved in an arm's length transaction at the reporting
date.
Significant judgement in applying accounting policies and key estimation
uncertainty
When preparing the Financial Statements, management makes a number of
judgements, estimates and assumptions about the recognition and measurement of
assets, liabilities, income and expenses.
The following are significant management judgements in applying the accounting
policies of the Company that have the most significant effect on the Financial
Statements.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at
each reporting date, based on the expected utility of the assets.
Uncertainties in these estimates relate to technological obsolescence that may
change the utility of certain software and IT equipment.
Valuation of investments
Management reviews the carrying value of investments at each reporting date,
based on the future cash flows of those investments.
IFRS 16
Under IFRS 16 the Company is required to make a judgement in determining the
discount rate to be used in calculating the present value of lease payments
when recognising the lease liabilities and right of use asset. For the
discount rate the Company has used the lessee's incremental borrowing rate,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right of use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Company, where possible, uses
recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party
financing was received. The right of use asset is depreciated over the term of
the lease. The term has been determined with reference to the lease agreements
and any expected extension beyond the end of the lease end date specified in
the lease agreement.
Business combinations
Management uses valuation techniques when determining the fair values of
certain assets and liabilities acquired in a business combination (see Note 32
of the consolidated accounts). In particular, the fair value of contingent
consideration is dependent on the outcome of the acquirees' future revenues
(see Note 32 of the consolidated accounts).
2. Other operating charges
2024 2023
£'000 £'000
Impairment of investment (note 11) 11,856 8,747
Fair value adjustment on contingent consideration (402) -
Depreciation of owned fixed assets 57 67
Depreciation of right of use assets 250 246
Other operating expenses 911 1,215
Total administrative expenses 12,672 10,275
3. Other income
2024 2023
£'000 £'000
Other income 7,852 505
The 2024 other income balance of £7,852k relates to an intercompany dividend
received in the year. Within the other income balance in 2023 is a settlement
of £505k in relation to previously incurred legal costs following the
dismissal of the claimant's case in April 2022, associated with the 2016
acquisition of Bloom Media (UK) Limited.
4. Finance costs
2024 2023
£'000 £'000
Bank interest payable 1,160 748
Withholding tax on borrowings interest expense 274 180
Interest on lease liability (note 10) 40 47
Interest on deferred and contingent consideration 188 125
Total 1,662 1,100
5. Tax
2024 2023
The tax credit/(charge) is based on the loss for the year and represents:
£'000 £'000
UK corporation tax at 25% (2023: 19%) - -
Total current tax - -
Deferred tax:
Origination and reversal of timing differences (326) (125)
Total tax credit (326) (125)
2024 2023
The tax credit can be explained as follows:
£'000 £'000
Loss before tax (6,482) (10,870)
Tax using the UK corporation tax rate of 25% (2023: 19%) (1,621) (2,065)
Effect of:
Non-taxable income - (505)
Recognition of unused losses (77) 330
Impairment of investments 2,964 1,662
Non-deductible (credits)/ expenses (1,592) 453
Current year credit (326) (125)
6. Auditor's remuneration
Details of remuneration paid to the auditor by the Company are shown in Note 7
to the Consolidated Financial Statements.
7. Directors and employees
2024 2023
Average number of staff employed by the Company 5 5
2024 2023
Aggregate emoluments (including those of Directors): £'000 £'000
Wages and salaries 530 453
Social security costs 61 53
Pension contribution 15 12
Share based payments (note 20) 15 -
Total emoluments 621 518
Further information in respect of Directors is given in the Directors'
Remuneration Report.
Remuneration in respect of Directors was as follows:
2024 2023
£'000 £'000
Emoluments receivable 345 342
Fees paid to third parties for Directors' services 30 30
Company pension contributions to money purchase pension schemes 9 9
384 381
The highest paid Director received remuneration of £239k (2023: £236k).
8. Dividends
The Directors do not recommend the payment of a dividend for the current year
(2023: £Nil).
9. Tangible fixed assets
ROU assets: Buildings Leasehold Improvements Office equipment Total
£'000 £'000 £'000 £'000
Cost at 31 March 2023 1,574 389 411 2,374
Disposals - - (191) (191)
Cost at 31 March 2024 1,574 389 220 2,183
Depreciation at 31 March 2023 661 242 317 1,220
Disposals - - (191) (191)
Charge for the year on owned assets - 39 18 57
Charge on right of use assets 227 - 23 250
Depreciation at 31 March 2024 888 281 167 1,336
Net book value at 31 March 2024 686 108 53 847
Net book value at 31 March 2023 913 147 94 1,154
10. Leases
The company has lease contracts for the offices occupied in Sheffield and
printers. The amounts recognised in the financial statements in relation to
the leases are as follows:
(i) Amounts recognised in the statement of financial position
The balance sheet shows the following amounts relating to leases:
2024 2023
£'000 £'000
Right of use assets
Buildings 686 913
Office equipment 50 73
736 986
Lease liabilities
Current 125 135
Non-current 421 604
546 739
(ii) Amounts recognised in profit and loss
The profit and loss account shows the following amounts relating to leases:
2024 2023
£'000 £'000
Depreciation charge of right of use assets
Buildings 227 223
Office equipment 23 23
250 246
Interest expense (included in finance cost) 40 47
(iii) Future minimum lease payments
The lease liabilities are secured by the related underlying assets. Future
minimum lease payments at 31 March 2024 were as follows:
Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years After 5 years Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Lease Payments 175 233 208 - - - 616
Finance Charges (32) (23) (15) - - - (70)
Net present values 143 210 193 - - - 546
The Company has elected not to separate lease and non-lease components and
instead accounts for these as a single lease component. The lease agreements
do not impose any covenants other than the security interests in the leased
assets that are held by the lessor. Leased assets may not be used as security
for borrowing purposes.
11. Investments
Subsidiaries
£'000
Cost at 31 March 2023 64,793
Additions -
Cost at 31 March 2024 64,793
Impairment at 31 March 2023 44,336
Impairment in year 11,856
Impairment at 31 March 2024 56,192
Net book value at 31 March 2024 8,601
Net book value at 31 March 2023 20,457
The Company has carried out an impairment review of the carrying amount of the
investments in Subsidiaries. The impairment review of investments was
performed using the same cash flows and assumptions as were used in the
Group's Financial Statements for the impairment review of goodwill, details of
which can be found in Note 14 in the Group's Financial Statements. This review
has concluded that no impairment was required to the carrying value of the
Company's remaining investments based upon sensitivities applied to forecast
EBITDA. The impairment charge in the year is due to the dissolution of
multiple group entities which was not finalised prior to the period end. The
entities included in the dissolution are: Alphanumeric Limited, Bloom Media
(UK) Limited, Epiphany Solutions Limited, Gasbox Limited, Jaywing Innovation
Limited and Midisi Limited.
At 31 March 2024 the Company held either directly or indirectly, 20% or more
of the allotted Share Capital of the following companies:
Proportion held
Class of share By parent By the Nature of
capital held Company Group Business
Alphanumeric Limited Ordinary 100% 100% Non-trading
Bloom Media (UK) Limited Ordinary 100% 100% Dormant
Epiphany Solutions Limited Ordinary 100% 100% Non-trading
Frank Digital PTY Limited Ordinary 100% 100% Website design and build
Gasbox Limited Ordinary 100% 100% Non-trading
Jaywing Central Limited Ordinary 100% 100% Non-trading
Jaywing Innovation Limited Ordinary 100% 100% Non-trading
Jaywing Australia PTY Limited Ordinary 100% 100% Search Engine Optimisation
Jaywing UK Limited Ordinary 100% 100% Direct marketing
Midisi Limited Ordinary 100% 100% Non-trading
All the companies listed above have been consolidated.
All the companies listed above are incorporated in England and Wales with the
following exceptions:
Company Country of Incorporation Address
Frank Digital PTY Limited Australia 36 Hickson Road, Millers Point, NSW 2000
Jaywing Australia PTY Limited Australia 36 Hickson Road, Millers Point, NSW 2000
The companies incorporated in England and Wales all have their registered
office at Albert Works, Sidney Street, Sheffield, S1 4RG. The companies
incorporate in Australia all have their registered office at 36 Hickson Road,
Millers Point, NSW 2000.
12. Debtors due within one year
2024 2023
£'000 £'000
Amounts due from Group undertakings 289 192
Prepayments 114 128
Other taxation and social security 21 122
424 442
Amounts due from Group undertakings attract no interest and are repayable on
demand.
13. Creditors: amounts falling due within one year
2024 2023
£'000 £'000
Trade creditors 360 352
Amounts owed to Group undertakings 6,625 13,509
Other taxation and social security 53 60
Other creditors 3 6
Accruals 170 172
Lease liability 125 135
Deferred consideration payable on acquisition of subsidiary undertakings 528 414
Contingent consideration payable on acquisition of subsidiary undertakings 268 109
8,132 14,757
Amounts owed to Group undertakings attract no interest and are repayable on
demand.
14. Creditors: amounts falling due in more than one year
2024 2023
£'000 £'000
Lease liability 421 604
Deferred consideration payable on acquisition of subsidiary undertakings 393 770
Contingent consideration payable on acquisition of subsidiary undertakings 749 1,251
1,563 2,625
15. Provisions
The carrying amounts and the movement in the provision account are as follows:
Dilapidations
£'000
At 31 March 2023 and 31 March 2024 290
The dilapidations provision of £290k (2023: £290k) has been recognised for
the head office held within Jaywing Plc.
The dilapidations provision will be settled at the end of the lease period,
which is greater than one year.
16. Borrowings
2024 2023
£'000 £'000
Summary:
Borrowings 13,420 11,435
2024
2023
Borrowings are repayable as follows:
£'000 £'000
Within one year:
Borrowings 13,420 11,435
Total due within one year 13,420 11,435
As the loans are at variable market rates their carrying amount is equivalent
to their fair value.
Interest is calculated at 3 month LIBOR plus a margin.
17. Share capital
Allotted, issued and fully paid:
45p deferred shares 5p ordinary shares
Number Number £'000
At 31 March 2023 67,378,520 93,432,217 34,992
At 31 March 2024 67,378,520 93,432,217 34,992
The 5 pence ordinary shares have the same rights (including voting and
dividend rights and rights on a return of capital) as the 50 pence ordinary
shares. Holders of the 45 pence deferred shares do not have any right to
receive notice of any General Meeting of the Company or any right to attend,
speak or vote at any such meeting. The deferred shareholders are not entitled
to receive any dividend or other distribution and shall, on a return of assets
in a winding up of the Company, entitle the holders only to the repayment of
the amounts paid up on the shares, after the amount paid to the holders of the
new ordinary shares exceeds £1,000,000 per new ordinary share. The deferred
shares are also incapable of transfer and no share certificates have been
issued in respect of them.
18. Reserves
Called-up Share Capital - represents the nominal value of shares that have
been issued.
Share Premium Account - includes any premiums received on issue of Share
Capital. Any transaction costs associated with the issuing of shares are
deducted from Share Premium.
Profit and Loss Account - includes all current and prior period retained
profits and losses.
Treasury Shares - shares in the company that have been acquired by the
company.
Capital Redemption Reserve - represents amounts transferred from Share Capital
on redemption of issued shares.
Share Option Reserve- fair value charge for share options in issue
19. Treasury shares
2024 2023
£'000 £'000
At start and end of year (99,622 shares) (25) (25)
Treasury shares represent the nominal value of the shares purchased by the
Company.
20. Share-based payments
Share-based payment charge is as follows:
2024 2013
£'000 £'000
Share-based payment 15 -
Details of the share options issued and the basis of calculation of the
share-based payments, which all relate to share options granted, are given in
Note 10 to the Consolidated Financial Statements.
21. Deferred tax asset
A deferred tax asset is provided for in the financial statements and consists
of the following:
2024 2023
£'000 £'000
Accelerated capital allowances 44 68
Unused losses 999 649
Deferred tax asset 1,043 717
The amount of deferred tax recognised in profit or loss was as follows:
2024 2023
£'000 £'000
Accelerated capital allowances (24) (16)
Unused losses 350 141
Total 326 125
Deferred tax assets are recognised to the extent that it is probable that the
underlying tax loss or deductible temporary difference will be utilised
against future taxable income. This is assessed based on the Group's forecast
of future operating results, adjusted for significant non-taxable income and
expenses and specific limits on the use of any unused tax loss or credit.
22. Contingent liabilities
There is a cross guarantee between members of the Jaywing plc group of
companies on all overdrafts and borrowings with the group's lenders. At 31
March 2024 the amount thus guaranteed by the company was £9,766,500 (2023:
£9,200,000).
23. Related parties
The Company is exempt from the requirements of FRS 101 to disclose
transactions with other 100% members of the Jaywing plc group of companies.
Transactions with other related parties are disclosed in Note 30 to the
Consolidated Financial Statements.
24. Ultimate controlling related party
At the year end, the Directors considered that the Company had no ultimate
controlling party.
25. Financial risk management objectives and policies
Details of Group policies are set out in Note 32 to the Consolidated Financial
Statements.
26. Retirement benefits
Defined Contribution Schemes
The Company operates a defined contribution pension scheme. The assets of
the scheme are held separately from those of the Company in an independently
administered fund. The pension cost charge represents contributions payable by
the Company to the fund and amounted to £15,000 (2023: £12,000) with the
financial year end pension creditor being £3,000 (2023: £3,000).
27. Post balance sheet events
On the 28 May 2024 Jaywing announced that it had increased its existing loan
facility with the Company's two lenders, DSC Investment Holdings Limited and
Lombard Odier Asset Management (Europe) Limited by £1,030,000, which includes
an arrangement fee of £30,000 payable to the Lenders. The additional capital
being lent by the two lenders is being provided on the same terms as the
existing Loan Facility. The new funds, which will be used for working capital
purposes, are available in two equal tranches, the first of which was drawn
down in May 24 and the second was drawn down in June 24.
Shareholder Information
General Meeting
A General Meeting will be held on 26 September 2024 at the offices of Jaywing
plc, Albert Works, Sidney Street, Sheffield, S1 4RG at 2:00pm.
Dividend
There is no dividend payable.
Multiple accounts on the shareholder register
If you have received two or more copies of or notifications about this
document, this means that there is more than one account in your name on the
Shareholders Register. This may be caused by your name or address appearing on
each account in a slightly different way. For security reasons, the Registrars
will not amalgamate the account without your written consent, so if you would
like any multiple accounts to be combined into one account, please write to
Neville Registrars at the address given below.
Documents
The following documents, which are available for inspection during normal
business hours at the registered office of the Company on any weekday
(Saturdays, Sundays and public holidays excluded), will also be available for
inspection at the place of the General Meeting from at least 15 minutes prior
to the meeting until its conclusion.
§ Copies of the Executive Directors' service agreements and the
Non-Executive Directors' letters of appointment;
§ The memorandum and articles of association of the Company; and
§ Register of Directors' interests in the Share Capital of the
Company maintained under Section 809 of the Companies Act 2006.
Particulars of the Directors' interest in shares are given in the Remuneration
Report, which is contained in the Report and Accounts for the year ended 31
March 2024.
Issued Share Capital
As at 23 August 2024 (being the last practicable date before the publication
of this document), the Company's issued Share Capital comprised 93,432,217
ordinary shares of 5p each, of which 99,622 are held in Treasury. Therefore,
as at 23 August 2024 the total voting rights in the Company were 93,332,595.
On a vote by show of hands, every member who is present in person or by proxy
has one vote. On a poll, every member who is present in person or by proxy has
one vote for every ordinary share of which he or she is a holder.
Shareholder enquiries
Neville Registrars Limited maintain the register of members of the Company. If
you have any queries concerning your shareholding, or if any of your details
change, please contact the Registrars:
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen, B62 8HD
Shareholder Helpline: 0121 5851131, fax: 0121 5851132.
Website address www.nevilleregistrars.co.uk
Website
Information on the Group is available at https://investors.jaywing.com
(https://investors.jaywing.com) .
Company Information
Registered Office
Albert Works
71 Sidney Street
Sheffield
S1 4RG
Registered Number: 05935923
Country of incorporation: England
Auditor
Cooper Parry Group Limited
Statutory Auditor
Sky View
Argosy Road
East Midlands Airport
DE74 2SA
Nominated adviser
Spark Advisory Partners
5 St.Johns Lane
London
EC1M 4BH
Turner Pope
8 Frederick's Place
London
EC2R 8AB
Registrars
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Solicitors
Fieldfisher LLP
No 1 Spinningfields
Hardman Street
Manchester
M3 3EB
Company Secretary
Christopher Hughes
Albert Works
71 Sydney Street
Sheffield
S1 4RG
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