20th Dec 2019 12:26
(Alliance News) - Jaywing PLC on Friday announced the departure of its chief operating officer and a much wider interim loss caused by an especially weak first quarter in which clients restricted their discretionary spending.
Shares in Jaywing were down 14% at 4.00 pence in London at midday.
Jaywing said it has reviewed its board composition and COO Adrian Langard is departing with immediate effect "by mutual agreement".
Chair Martin Boddy said: "On behalf of the board I would like to thank him for his contribution over the past four years."
For the six months ended September 30, Jaywing's pretax loss was GBP1.5 million, almost tripled from its GBP567,000 loss a year before, as revenue fell 26% to GBP13.8 million from GBP18.7 million.
Boddy explained that: "Trading in the UK in the first quarter of the year was very weak with a modest improvement in the second quarter. With the political and economic uncertainty in the period, many clients have been focused on their short term marketing spend and where this spend is discretionary, it has been running at a level well below that seen in previous years."
In Australia, however, profitable growth was seen and earnings before interest, tax, depreciation, and amortisation rose by 40%.
In October, entities associated with two major Jaywing shareholders acquired its GBP5.2 million loan facility owed to Barclays Bank PLC and increased the size of the loan to GBP8.2 million, meaning Jaywing could repay its outstanding overdraft and had access to further working capital. This has put the company in a stronger financial position.
The company is also undertaking a plan aimed at restoring UK profitability and cash generation in the short term.
"Since September management has been focused on executing the plan, and I am pleased to say that we are making good progress. We have improved the management of our working capital, materially realigned our cost base and adopted a new and contemporary agency model that drives revenue and creates efficiencies in delivering even higher quality and effective work for clients. All of this is now being reflected in a stronger financial run rate," said Boddy.
Further ahead, the company is assessing different strategic options to return the firm to "highly accretive revenue growth".
By Anna Farley; [email protected]
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