REG - Jaywing PLC - Trading Update

JaywingAnnouncement

16/02/2023 07:00

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RNS Number : 0763Q  Jaywing PLC  16 February 2023

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Date:                16 February 2023

On behalf of:    Jaywing plc ("Jaywing", "the Company" or "the Group")

Embargoed:      0700 hrs on 16 February 2023

 

Jaywing plc

Trading update February 2023

Jaywing plc (AIM: JWNG), the integrated agency powered by data science, today
announces a trading update for the current financial year ending 31 March
2023.

Since the announcement of the Company's half year results, Jaywing has
continued to successfully implement cost saving measures in light of the
ongoing uncertainties within domestic markets and the global economy. Whilst
the pipeline of new business remains encouraging, Jaywing has seen a softening
of demand over the past two months with certain clients seeking to defer their
marketing spend, both in the UK and Australia, until the economic situation
settles or improves.  This has been particularly evident with consumer-facing
brands as they tighten their own cost management in the short term.

The Company is confident that this reduction in marketing spend is temporary
and represents delayed rather than lost revenues to the Group. However,
significant project revenues previously expected to commence in Q4 are
unlikely to now commence by 31 March 2023.

The Company therefore expects full year net revenues for the year end 31 March
2023 to be between £22.0m and £22.5m, with adjusted EBITDA ahead of last
year as a result of a 5% reduction in overall Group costs, but below market
expectations.  Over the last 3 years the Group has restructured its
operations and cost base, increasing revenue per head by 27% and reducing
premises costs by 19%.  The Company believes that it has balanced the
reductions in costs with the need for appropriate specialist resources to
support future growth.

The Company believes that it is well positioned to benefit when economic
conditions improve and that this will be reflected in Jaywing's performance.
We have recently signed a significant new client in Australia - Online
Education Services, which has appointed Jaywing Australia as its creative
agency in a deal which alone is expected to increase Group revenues by c.5% in
the year ending 31 March 2024, but will start too late to have a significant
impact on the current year.  Projections for the Australian economy suggest
that it will recover sooner than the UK, and Jaywing Australia is well placed
to benefit from that.

Significant new UK wins include data modelling & management for LHV, fraud
& financial modelling for Fair4All Finance, and brand/creative work for
University of East Anglia.  The benefits of the acquisition of the Decision
software last year are on track, with four new clients added since completion,
and a number of additional client prospects in discussion.

The overall opportunity pipeline continues to build in both countries,
although the lead times for both decision-making and start dates have
lengthened.

Andrew Fryatt, CEO commented:

"Whilst we are disappointed to see some clients spending less than expected in
the fourth quarter of the financial year, we expect this to recover as
conditions improve, and we are delighted by the substantial win in Australia.
 Our cost management has mitigated the impact of this revenue shortfall,
allowing us to continue growing adjusted EBITDA, and has also ensured that the
Group is appropriately structured to operate in these challenging market
conditions."

 

Enquiries:

 Jaywing plc
 Christopher Hughes (CFO/Company Secretary)  Tel: 0333 370 6500
 Cenkos Securities plc
 Callum Davidson                             Tel: 020 7397 8920

 Nicholas Wells

 

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