REG - Jaywing PLC - Trading update, Loan Facility and Strategic Review

JaywingAnnouncement

04/03/2024 07:00

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RNS Number : 3545F  Jaywing PLC  04 March 2024

Certain information contained within this Announcement is deemed by the
Company to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.

Jaywing plc

("Jaywing" or "the Company")

 

Trading update, Increase in Loan Facility and Strategic Review

 

Jaywing Plc (AIM: JWNG), the marketing and data science business specialising
in integrated marketing and risk and data consulting.

 

As set out in our interim results strong trading in Australia and our Risk
Consulting business has continued to offset the much publicised weakness in
the UK Agency market. We have continued to cut costs, particularly in the UK
which will ensure that we have maximum operational leverage as we emerge from
this softer market.  Whilst market conditions continuing to be challenging
there are encouraging signs of recovery.  The business has built a strong
pipeline of opportunities, and has recently won significant new contracts,
including with Subaru Europe, Crocs (Asia Pacific) and with Homes England.  A
number of further opportunities are in process, particularly for UK Agency.
We also have a number of new opportunities for our AI-based Decision software,
which is beginning to build momentum at high margins.

 

As at 31(st) January net debt was slightly reduced, at £11,769k, down from
£11,925k at 30(th) September 2023.   It is expected that the Company will
generate operating cashflow throughout 2024 and beyond and with limited
further restructuring required and no material Capex forecast the business
should naturally deliver and emerge with a much stronger balance sheet.  In
order to not place undue strain on the Company's working capital in the short
term the Company announces that it has increased its existing loan facility
("the Loan Facility") with the Company's two lenders, DSC Investment Holdings
Limited and Lombard Odier Asset Management (Europe) Limited* (jointly, "the
Lenders") by £566,500, taking the total facility to £9,766,500.

 

Strategic Review

 

The Lenders remain extremely supportive of the business, its improving
operating performance  and strong prospect list, but have requested that as
the Company's expected recovery materialises throughout 2024, it should seek
to refinance the Loan Facility, which was originally provided on a short-term
interim basis in August 2019, with a more appropriate longer term capital
base. The Company has invested significantly in broadening its geographic and
technical capabilities to best serve the increasingly globalised demands of
its customer base for cost effective solutions underpinned by technical
insight and measurable return on marketing spend.  In order to continue to
build on this platform and reflecting the Lenders desire to see the business
recapitalised, the Company will explore all strategic options, including a
possible sale of the Company as it continues to recover its profitability to
ensure that its client service can be delivered and that the ongoing support
of the Loan Facility can be repaid.

As the Company is subject to the City Code and one of the possible outcomes of
the strategic review is a sale of the Company, it is considered to be in an
"offer period" as defined in the City Code, and the dealing disclosure
requirements as set out further below will apply.

The Company confirms that is not in receipt of any approach, nor in
discussions with any potential offeror, at the date of this announcement.

 

Board Changes

Under the revised loan agreement each lender has the right to appoint two
directors to the Board.  Lombard Odier has requested that Henry Turcan and
Rob Giles be appointed. DSC has requested that David Beck be appointed as a
director. These appointments are subject to the usual regulatory due diligence
and are expected to join the board as soon as this process is complete. A
further announcement will be made in due course.  As part of the board
restructuring Philip Hanson will resign with immediate effect but will
continue to support the Company in an advisory capacity with the benefit of
his strong industry background and networks . The board would like to thank
Philip for his valued contribution and service to the Company as a director.
The Company intends to appoint an additional independent non-executive
director as and when appropriate.

Related party transaction

The additional capital being lent by the Lenders is being provided on the same
terms as the existing Loan Facility.  As each of the Lenders, being DSC
Investment Holdings Limited ("DSC" and Lombard Odier Asset Management (Europe)
Limited ("Lombard Odier"), are considered related parties because of their
respective shareholdings in the Company, the provision of this capital by
entities associated with each of them is deemed to comprise related party
transactions for the purposes of Rule 13 of the AIM Rules for Companies. The
Independent Director (being Andrew Fryatt) considers, having consulted with
the Company's nominated adviser, SPARK Advisory Partners Limited, that the
terms of the transaction are fair and reasonable insofar as the Company's
shareholders are concerned.

*acting in its capacity as discretionary investment manager or sub-adviser for
and on behalf of certain funds and accounts managed by it and/or as agent of
Lombard Odier Asset Management (USA) Corp (LOAM USA) acting in its capacity as
discretionary investment manager for and on behalf of certain funds and
accounts managed by it ("Lombard Odier").

 

-Ends-

 For any further enquiries, please contact:

 

For further information on the Company, please visit www.jaywing.com or
contact:

 

Jaywing plc

Christopher Hughes (Company Secretary)

T: +44 (0)333 370 6500

 

 

SPARK Advisory Partners Limited (Nominated and Financial Adviser)

Matt Davis / James Keeshan

T: +44 (0) 20 3368 3552

 

Turner Pope (Broker)

James Pope / Andy Thacker

T: +44 (0) 20 3657 0050

 

Notice related to the financial adviser

SPARK Advisory Partners Limited, which is regulated by the Financial Conduct
Authority in the United Kingdom, is acting exclusively for Jaywing and no one
else in connection with the matters referred to in this announcement and will
not be responsible to anyone other than Jaywing for providing the protections
afforded to clients of SPARK Advisory Partners Limited, or for providing
advice in relation to the matters referred to in this announcement.

The City Code

The City Code applies to quoted public companies which have their registered
office in the UK, the Channel Islands or the Isle of Man and, in addition,
unquoted public companies which have their registered office in the UK, the
Channel Islands, or the Isle of Man and whose central management and control
remain in the UK, the Channel Islands or the Isle of Man. Accordingly, the
City Code applies to the Company. Under the City Code, if an acquisition of
Ordinary Shares or interests therein were to increase the aggregate holding of
the acquirer and its concert parties to interests in shares carrying 30 per
cent. or more of the voting rights in the Company, the acquirer and, depending
on circumstances, its concert parties would be required (except with the
consent of the Panel) to make a cash offer for the outstanding shares in the
Company at a price not less than the highest price paid for interests in
shares by the acquirer or its concert parties during the previous 12 months.

This requirement would also be triggered by any acquisition of New Ordinary
Shares and/or interest therein by a person holding (together with its concert
parties) Ordinary Shares carrying between 30 and 50 per cent. of the voting
rights in the Company if the effect of such acquisition was to increase that
person's percentage of the total voting rights of the Company.

Disclosure requirements of the City Code

Under Rule 8.3(a) of the City Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th business day following the announcement in which any
securities exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.

Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested
in 1 per cent. or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 pm (London time) on the business day following the date of the
relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

 

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