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Jaywing PLC (JWNG)

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Tuesday 10 July, 2018

Jaywing PLC

Final Results - Replacement

RNS Number : 1533U
Jaywing PLC
10 July 2018
 

The following amendments have been made to the 'Final Results' announcement released on 10 July 2018 at 7.00am under RNS No 0835U:

 

In the Chief Executive's Statement, it was incorrectly stated that the Agency Segment generated gross profit of £21.4 million and EBITDA of £6.0 million for the financial year ended March 2018. This has been corrected to state gross profits and EBITDA generated of £15.3 million and £2.3 million respectively.

 

In the Chief Executive's Statement, it was incorrectly stated that the Media and Analysis Segment generated gross profit of £15.3 million and EBITDA of £2.3 million for the financial year ended March 2018. This has been corrected to state gross profits and EBITDA generated of £21.4 million and £6.0 million respectively.

 

In the cash flow statement, the net cash flow from operating activities has been corrected form £681k to £788k.

 

All other details remain unchanged.

 

The full amended text is shown below.

 

 

 

 

Date:                  10 July 2018

On behalf of:      Jaywing plc ("the Company")

Embargoed:     0700hrs 10 July 2018

 

Jaywing plc

Preliminary Results 2018

 

Jaywing plc (AIM: JWNG), the data driven, insight and creative agency, is pleased to announce its audited preliminary results for the year ended 31 March 2017

 

Financial highlights from continuing operations

 

 

 

Year to 31 March 2018

£'000

Year to 31 March 2017

£'000

Revenue

47,541

44,537

Gross profit*

36,715

35,977

Adjusted EBITDA**

3,025

4,860

Adjusted EBITDA margin***

8.2%

13.5%

(Loss) / profit after tax

(1,133)

(2,981)

Basic EPS on adjusted EBITDA#

3.2p

5.6p

Basic EPS

(1.25p)

(3.42p)

Net debt

(5,918)

(3,534)

 

* Revenue less direct costs of sale

** Before share based charges, exceptional items and acquisition related costs

*** As a percentage of gross profit

# Following issue of shares for Frank Digital acquisition

 

Highlights

·      Acquired Frank Digital PTY to continue growth and development in Australia

·      Secured new international contracts

·      Launched new AI powered products including Archetype and Decision

·      Revenue increased by 6.7% (6.3% increase on a like for like basis)

·      Gross profit increased by 2.0% (3.1% reduction on a like-for-like basis)

·      Re-aligned cost base in response to challenging market conditions

·      Reduced loss before tax

·      Increased collaboration across Jaywing with 68% of our top 50 clients taking more than one of our service lines

 

 

Outlook

We have started the year with good new business wins from larger clients where we clearly demonstrated the value of our integrated 'One Jaywing' approach in a competitive process.

 

Whilst there is still caution in the UK market we believe we are well positioned to achieve our market expectation, especially with the continued growth in Australia enhanced by our most recent acquisition.

 

Commenting on the results, Martin Boddy, Chairman of Jaywing, said:

 

 

"After four consecutive years of growth fuelled by a strong data science-led proposition, we have endured a period of challenging market conditions in the UK.  We have taken the necessary actions to recover our EBITDA margin going forward whilst ensuring that we still have the necessary resources to grow our client base so we can return our EBITDA to previous levels by the financial year ending March 2020.

 

Despite these challenges it has been a year of progress in terms of expanding our fast-growing Australian operation through the acquisition of Frank Digital, plus we have launched innovative technology incorporating the use of Artificial Intelligence for clients in the UK and beyond.

 

Clients are increasingly looking for more data, digital and technology focused agencies and consultancies with collaborative operating models.  This is very much the sweet spot for Jaywing, so we remain excited and optimistic about our future potential.".

 

 

Enquiries:

 

Jaywing plc

 

Michael Sprot (Finance Director)

Tel: 0114 281 1200

 

 

Cenkos Securities plc (Nominated Adviser)

 

Nicholas Wells

Tel: 020 7397 8900

 

 

 

 

Chairman's Statement

 

Whilst the well-publicised adverse market conditions have impacted Jaywing during the financial year, we have nevertheless made good progress in a number of areas.

 

We launched a suite of Artificial Intelligence (AI) based products and have strengthened our fast growing Australian business with the acquisition of Frank Digital. We also gained a social audiences platform through the acquisition of Head Offfice, which has now been fully integrated. Over and above all of that we have produced some exceptional work which has delivered exceptional results for our clients and has involved many innovative applications of data science.

 

As I have previously explained, trading conditions in the UK have been challenging on a number of fronts following the election in June 2017.  We saw a 3% reduction in like for like gross profit (GP) during the year.  Consequently, a far greater focus has been placed on cost management, particularly in the second half of the year. On a more positive note, in recent months it has been encouraging to see a marked improvement in our sales pipeline, some excellent new business wins and lower levels of client churn. 

 

Looking more broadly at our sector, it is hard to remember a period where there has been such turbulence.

 

Digital media has been in the headlines for all the wrong reasons.  Ads appearing alongside unsavoury YouTube content led to several brands pausing their spend until the problem was fixed. The lack of transparency in programmatic media buying undertaken by the global agency networks came under scrutiny with brands such as P&G taking that function in house. Then there was the Cambridge Analytica episode concerning their use of Facebook data, which coincided with GDPR coming into force.   

 

The network agency model has come under pressure with WPP in the spotlight.  Too great a focus on traditional advertising, opaque charging practices, lack of client focus and competition from Management Consultancies have led a number of these agency groups launching new strategies.  The common themes here are to adopt a more client centred and collaborative operating model with a single P&L and to place a greater focus on data, digital and technology. 

 

So, what does this all mean for Jaywing?

 

We have been operating a "One Jaywing" model for the past 5 years and understand that this is not just about managing a matrix and incentivising through a single profit measure, it's about creating a truly collaborative culture internally and in our relationships with clients. We have a transparent charging model and are focused in data science, digital marketing and technology, the spend for all of which is predicted to grow, albeit perhaps more slowly in the UK in the next year or so.  In general, we don't work for large multi-national clients who have the resources to create in-house teams and we don't find ourselves competing with the management consultancies, indeed we sometimes work alongside them to provide specialist skills. GDPR has been and will continue to be an opportunity for us as clients recognise the importance of working with a partner who understands data and how to create positive engagements with consumers.

 

So, there is a good opportunity for Jaywing in the medium term but the near term focus is to recover after a difficult period of trading that has created financial constraints for us to manage within and put on hold our plans for further acquisitions and paying a dividend.

 

Our objective is to exit the current financial year (ending March 2019) at a run rate that puts us back on our original track for the following year. We anticipate that market conditions in the UK may not improve markedly in the short term but feel that with a realigned cost base, differentiated proposition and strong growth in Australia we will achieve our market expectation.

 

Our colleagues - the "Jaywingers" are a resilient, talented and optimistic bunch and on behalf of the Board, I would like to thank them all for their continuing support, hard work and enthusiasm.

 

 

 

 

 

Martin Boddy

Chairman

 

 

 

Chief Executive's Report

 

Data science has never been more important to our customers and our marketplace.  Jaywing operates in three main ways, as a consultancy, an agency and following the launch of Jaywing Intelligence, a technology business.  Our skill is to combine these three disciplines to create solutions that our competition cannot match and our clients find indispensable.

 

Our collaborative 'One Jaywing' operating model is the essential foundation on which the broad range of specialist skills across Jaywing can be brought together to build innovative solutions that deliver superior results for our clients. 

 

As a company that has been championing this operating model for many years now, it has been interesting to see that the large network agencies are beginning to talk about adopting a similar model.  Our experience shows us that this transition isn't easy but we continue to realise its benefits and saw a further 2% increase (from 66% to 68%) in the number of our top 50 clients taking more than one of our service lines.  This broader relationship with clients is also improving client retention as we become more valuable to them across a variety of disciplines. 

 

I'm pleased to say that our operating model was once again recognised in the Prolific North Awards where Jaywing was awarded the Best Integrated Agency title for the second year in a row.  It was also endorsed by Palo Alto based Sugar CRM, one of the world largest CRM software providers who recently awarded us their global marketing account that will involve work across a number of our divisions. 

 

 

A challenging first year

 

My first year as CEO started with a great deal of optimism throughout the Company on the back of record Q4 trading the previous year.  However, market conditions for UK B2C businesses deteriorated markedly after the election in June 2017 and this impacted on several of our clients.  The knock-on effect was that our own trading suffered. Consequently, instead of focusing on accelerating our growth a great deal of my time has had to be devoted to realigning our cost base.  This is never an easy task in a people business and we have been mindful not to impact our ability to return to and exceed previous levels of growth and profitability by cutting costs too deep.

 

Whilst like for like gross profit was only down by 3% on the previous year, EBITDA fell to £3,025k resulting in a higher net debt position of £5.9m at the year end.  Our bank has been very supportive throughout the period and has agreed to re-structure our facilities, which will now run until 2021 and will give us the necessary headroom whilst our profitability recovers.

 

 

State of play

 

 

Agency Segment

 

Our Agency Segment generated gross profit of £15.3 million (up 6% on previous year) and EBITDA of £2.3 million (down 13% on previous year, primarily due to change in mix of business). Following the delay in spend that we experienced with one of our major FMCG clients, we have reduced our exposure to this sector by re-focussing parts of our Agency segment on more sustainable revenues and creating broader relationships with larger clients.  This is evidenced by new wins including Centerparcs and Berghaus as well as continued engagements with companies including Castrol Oil and First Direct.

 

 

Media & Analysis Segment

 

Our Media and Analysis Segment generated gross profit of £21.4 million and EBITDA of £6.0 million for the financial year ended March 2018, a decrease of 1% and 18% respectively on the previous financial year. Over recent months our performance marketing division has seen an improvement in its sales performance with a stronger pipeline both in terms of the number and quality of opportunities (the majority of which are for monthly recurring revenues). This follows us being named Search Agency of the Year at the UK Agency Awards in September 2017.  As well as a focus on new business we have worked hard to reduce client churn and this year saw a 55% reduction in lost clients ensuring more repeat revenue streams in the coming years.

 

Our consulting division, grounded in data science, continues to be at the heart of the work we deliver for clients.  The level of insight given by our consultants ensures that work delivered by other parts of Jaywing is informed and relevant.  Our consultancy team is a key element of our 'One Jaywing' model and new clients adopting more integrated solutions are generating new revenues across both Agency and Media & Analysis segments. 

 

A large part of the revenues in the consulting division are project based, albeit with long standing clients.  Work on one of our larger financial services projects is being scaled down following the completion of a successful project spanning 17 months and the focus now is on securing new work for that team of people.  This has been supported by the creation of a number of new technology solutions plus new propositions for GDPR and IRB (Internals Rating Base), which are helping grow our sales pipeline. 

 

 

Technology

 

Our technology brand, Jaywing Intelligence, continues to generate high levels of interest with a number of innovative new products launched.  Applications such as Almanac that takes complex sets of customer data to bridge the gap between on-line and offline behaviour has been adopted by brands including Mazda UK and Swinton Insurance to more accurately deliver their marketing spend and to understand how to tailor their activity to meet their customer's needs.  We also launched our AI powered risk modelling solution Archetype (patent pending) this year, which is generating interest in the Credit Risk community.

 

Our paid search management platform - Decision (also built on AI principles and technology) has begun to secure new clients and is currently being integrated into our existing performance marketing operations which will provide a strong point of differentiation in the market.

 

Finally, our consulting services in credit risk have been enhanced by technology with the creation of the Echelon application for improving the speed of credit applications and Horizon which allows lenders to quickly model their Expected Credit Loss (ECL) IFRS9 requirements.  Both of these tools which have recently been launched are generating new opportunities in our sales pipeline.

 

 

International

 

Following our acquisition of Digital Massive in Australia in 2016 (now re-branded as Jaywing) our Australian operation has continued to go from strength to strength in a very active market.  Revenues grew by 42% this year and we expect Australia to represent 10% of our overall income in the year ahead.

 

Even with the geographic and time differences, our Australian business fully integrates with our UK operations and services a variety of shared clients including Anytime Fitness, Wedgewood Worldwide and now Sugar CRM.

 

We further expanded our overseas operations with the acquisition of Frank Digital in Sydney which is a great complement to our existing operations and brings with it strong digital development skills, a quality management team and relationships with large clients that we are presenting our 'One Jaywing' solution to. Frank Digital now operates from our offices in North Sydney.

 

 

Outlook

 

We believe that our integrated operating model and challenger brand approach position us well in the medium term as we target our return to previous levels of performance and this has been endorsed by the quality of recent client wins since the start of the new financial year.  Our focus is on delivering for our clients, retaining and growing our client base, managing our overheads carefully to underpin our recovery and playing to our strengths with data science at the core of all we do.

 

With so much disruption in the large agency networks and traditional service models being challenged I believe we are ideally placed to capitalise on our integrated approach. Whilst UK market conditions may remain unhelpful in the short term we are well positioned to achieve our market expectation, which will give us the exit rate to get back to previous levels of profitability the following year.

 

 

 

 

 

 

 

Rob Shaw

Chief Executive Officer

Jaywing plc

 

 

 

 

Strategic Report

 

 

Business review

 

 

Gross profit grew by 2% to £36.7m, an increase of £0.7m from the prior year (2017: £36.0m). If the impact of acquisitions is excluded, there was a reduction of 3%, from £33.5m to £32.4m. The adjusted operating performance line, before interest, tax, depreciation, amortisation, impairment, share based payment charges, loss before tax on disposal, exceptional items and acquisition related costs, shows EBITDA of £3.0m (2017: £4.9m).

 

The consolidated cash flow statement shows Jaywing to have generated cash from operating activities of £1.4m (2017: £3.9m) after changes in working capital. This is shown in the table below.

 

 

 

2018

2017

 

 

£'000

£'000

(Loss) / profit after tax

 

(1,133)

(2,981)

Adjustments for:

 

 

 

Depreciation, amortisation and impairment

 

2,588

5,140

Movement in provision

 

(22)

6

Foreign exchange

 

(39)

16

Financial expenses & income

 

203

32

Share-based payment expense

 

238

1,141

Taxation charge

 

(83)

43

Changes in working capital

 

(208)

482

 

 

 

 

Operating cash flow after changes in working capital

 

1,544

3,879

 

A loss after tax of £0.6m has been generated (2017: £3.0m). The prior financial year was impacted by the impairment in the carrying value of goodwill in our Contact Centre.

 

We incurred £0.3m of one-off costs from the acquisition of Frank Digital, which is included within the loss after tax.  

 

Jaywing continues to be cash generative from operating activities as shown in the table. Net debt has increased from the prior year by £2.4m and is now £5.9m (2017: £3.5m). This follows deferred consideration payments of £2.4m during the year.

 

Banking facilities comprise a term loan for £3.0m, a revolving credit facility for £3.5m and a bank overdraft of £2.0m. There was headroom of £2.6m at the year end. As noted in the Chief Executive's statement, the facility has been re-structured after the year end.

 

The business operates in three segments: Agency Services, Media & Analysis and Central Costs. The segmental performance of our business in these practice areas is shown in Note 1 to the Consolidated Financial Statements, together with the comparative performance from the previous year.

 

The Media and Analysis segment which represents just under 60% of total Gross Profit saw a 1% reduction from £21.6m to £21.4m. EBITDA fell by 18% from £7.3m to £6.0m. The Agency Services segment has grown gross profit which has increased by 6%. However EBITDA has reduced by 13%, impacted by the mix of work.

 

The table below shows the adjusted operating profit of Jaywing analysed between the two half years and adjustments made against the reported numbers:

 

 

Full year to

31 March 2018

Six months to

31 March 2018

Six months to

30 September 2017

 

 

£'000

£'000

£'000

Reported loss before tax

 

(1,216)

(633)

(583)

 

 

 

 

 

Interest

 

203

124

79

Amortisation

 

2,033

1,023

1,010

Depreciation

 

555

301

254

Share based payment charge

 

193

(85)

278

Acquisition related costs

 

827

511

316

Exceptional costs

 

494

348

146

Adjusted operating profit

 

3,089

1,589

1,500

 

 

 

 

 

Deduct other income

 

(64)

(18)

(46)

 

 

 

 

 

Adjusted operating profit before other income

3,025

1,571

1,454

 

Excluding other income, Jaywing produced £1.6m adjusted operating profit after interest in the six months to 31 March 2018 and £1.4m in the first half.

 

 

 

The table below shows the trend of gross profit and EBITDA over the last four six-monthly periods:

 

 

Continuing business EBITDA

 

Six months to 31 March 2018

Six months to 30 Sept 2017

Six months to 31 March 2017

Six months to 30 Sept 2016

 

£'000

£'000

£'000

£'000

Revenue

24,075

23,466

23,642

20,895

Direct costs

(5,195)

(5,631)

(4,779)

(3,781)

Gross profit

18,880

17,835

18,863

17,114

Operating expenses excluding depreciation, amortisation, exceptional items, acquisition related costs and (credit)/charges for share based payments

(17,309)

(16,381)

(16,135)

(14,982)

Operating profit before depreciation, amortisation, exceptional items, acquisition related costs and (credit)/charges for share based payments

1,571

1,454

2,728

2,132

 

 

 

Impairment

 

As required by IAS 36, we have carried out an impairment review of the carrying value of our intangible assets and goodwill. We calculated our weighted average cost of capital 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. Based on this calculation, a rate of 11.5% (2017: 10.6%) has been derived. This is applied to cash flows for each of the business units using growth rates in perpetuity of 2% from 2020/21. As a result of these calculations the Board has concluded that no impairment is required (2017: £2.9m).

 

 

Dividend Policy

 

As noted in the Chairman's Statement, we have delayed implementing a dividend policy.

 

 

Key performance indicators

 

Over the last 12 months, the key areas of focus have been:

-       Increased collaboration

-       Cost reduction

-       International expansion

-       Technology development

 

Progress against these is described in the Chief Executive's report.

 

 

 

 

 

 

By order of the Board.

 

 

 

Michael Sprot

Chief Financial Officer

 

 

 

 

 

 

Consolidated statement of comprehensive income

 

For the year ended 31 March

 

 

2018

2017

Continuing operations

Note

 

£'000

£'000

 

 

 

 

 

 

 

 

 

 

Revenue

1

 

47,541

44,537

Direct costs

 

 

(10,826)

(8,560)

Gross profit

 

 

36,715

35,977

 

 

 

 

 

Other operating income

2

 

64

26

Operating expenses

3

 

(37,792)

(38,909)

Operating (loss) / profit

 

 

(1,013)

(2,906)

Finance income

 

 

-

165

Finance costs

 

 

(203)

(197)

Net financing costs

 

 

(203)

(32)

(Loss) / profit before tax

 

 

(1,216)

(2,938)

Tax expense

4

 

83

(43)

(Loss) / profit for the year from continuing operations

 

 

(1,133)

(2,981)

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

Items that will be reclassified subsequently to profit or loss

 

Exchange differences on retranslation of foreign operations

 

 

(39)

16

 

 

 

 

 

Total comprehensive income for the period attributable to equity holders of the parent

 

 

(1,172)

(2,965)

 

 

 

 

 

 

 

 

 

 

(Loss) / profit per share

5

 

 

 

Basic (loss) / profit per share

 

 

(1.25p)

(3.42p)

 

 

 

 

 

Diluted (loss) / profit per share

 

 

(1.25p)

(3.42p)

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated balance sheet

 

 

 

 

 

As at 31 March

 

 

2018

2017

2016

 

Note

 

£'000

£'000

£'000

Non-current assets

 

 

 

Restated

Restated

Property, plant and equipment

 

 

1,443

1,095

744

Goodwill

7

 

34,496

33,722

30,446

Other intangible assets

8

 

5,962

7,230

6,562

 

 

 

41,901

42,047

37,752

Current assets

 

 

 

 

 

Trade and other receivables

 

 

11,754

11,311

10,150

Cash and cash equivalents

9

 

632

2,216

347

 

 

 

12,386

13,527

10,497

 

 

 

 

 

 

Total assets

 

 

54,287

55,574

48,249

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Other interest-bearing loans and borrowings

9

 

4,750

4,750

4,612

Trade and other payables

 

 

12,545

12,296

8,072

Current tax liabilities

 

 

249

557

452

Provisions

 

 

151

173

167

 

 

 

17,695

17,776

13,303

Non-current liabilities

 

 

 

 

 

Other interest-bearing loans and borrowings

9

 

1,800

1,000

1,063

Deferred consideration

 

 

-

2,314

-

Deferred tax liabilities

 

 

951

1,229

1,387

 

 

 

2,751

4,543

2,450

 

 

 

 

 

 

Total liabilities

 

 

20,446

22,319

15,753

 

 

 

 

 

 

Net assets

 

 

33,841

33,255

32,496

 

 

 

 

 

 

Equity attributable to owners of the parent

 

 

 

 

 

Share capital

10

 

34,992

34,657

34,139

Share premium

 

 

10,088

9,108

6,608

Capital redemption reserve

 

 

125

125

125

Shares purchased for treasury

 

 

(25)

(25)

(25)

Share option reserve

 

 

736

504

146

Minority interest

 

 

1,718

1,513

-

Foreign currency translation reserve

 

 

(20)

19

3

Retained earnings

 

 

(13,773)

(12,646)

(8,500)

 

 

 

 

 

 

Total equity

 

 

33,841

33,255

32,496

 

 

 

 

 

 

 

 

 

 

Consolidated cash flow statement

For the year ended 31 March

 

2018

2017

 

Note

£'000

£'000

 

 

 

 

Cash flow from operating activities

 

 

 

Loss after tax

 

(1,133)

(2,981)

Adjustments for:

 

 

 

Depreciation, amortisation and impairment

 

2,588

5,140

Movement in provision

 

(22)

6

Foreign exchange arising from translation of foreign subsidiary

 

(39)

16

Financial income

 

-

(165)

Financial expenses

 

203

197

Share-based payment expense

 

238

1,141

Taxation charge

 

(83)

43

 

 

 

 

Operating cash flow before changes in working capital

 

1,752

3,397

Increase in trade and other receivables

 

(360)

(281)

(Decrease) / increase in trade and other payables

 

152

763

Cash generated from operations

 

1,544

3,879

 

 

 

 

Interest received

 

-

1

Interest paid

 

(203)

(197)

Tax paid

 

(553)

(549)

Net cash flow from operating activities

 

788

3,134

 

 

 

 

Cash flow from investing activities

 

 

 

(Payment) / receipt of deferred consideration

 

(2,528)

151

Acquisition of subsidiaries net of cash acquired

6

(647)

(3,694)

Acquisition of intangible assets

 

(448)

-

Acquisition of property, plant and equipment

 

(865)

(815)

Net cash outflow from investing activities

 

(4,488)

(4,358)

 

 

 

 

Cash flow from financing activities

 

 

 

Increase in borrowings

 

800

75

Proceeds from issue of share capital

 

1,316

3,018

Net cash inflow from financing activities

 

2,116

3,093

 

 

 

 

Net (decrease) / increase in cash and cash equivalents

 

(1,584)

1,869

Cash and cash equivalents at beginning of year

 

2,216

347

Cash and cash equivalents at end of year

 

632

2,216

 

 

 

 

Cash and cash equivalents comprise:

 

 

 

Cash at bank and in hand

 

632

2,216

Bank overdrafts

9

-

-

Cash and cash equivalents at end of year

 

632

2,216

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity

 

 

 

 

 

Share capital

Share premium account

Capital redemption reserve

Treasury Shares

Minority interest

Share option reserve

Foreign currency translation reserve

Retained earnings

Total  equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 31 March 2016 (restated)

34,139

6,608

125

(25)

-

146

3

(8,500)

32,496

Issue of share capital

518

2,500

-

-

-

-

-

-

3,018

Acquisition of subsidiaries

-

-

-

-

1,513

-

-

(1,165)

348

Charge in respect of share based payments

-

-

-

-

-

358

-

-

358

Transactions with owners

518

2,500

-

-

1,513

358

-

(1,165)

3,724

Loss for the period

-

-

-

-

-

-

-

(2,981)

(2,981)

Retranslation of foreign currency

-

-

-

-

-

-

16

-

16

Total comprehensive income for the period

-

-

-

-

-

-

16

(2,981)

(2,965)

Balance at 31 March 2017

34,657

9,108

125

(25)

1,513

504

19

(12,646)

33,255

 

 

 

 

 

 

 

 

 

 

Issue of share capital

335

980

-

-

-

-

-

-

1,315

Acquisition of subsidiaries

-

-

-

-

211

-

-

-

211

Charge in respect of share based payments

-

-

-

-

-

232

-

-

232

Transactions with owners

335

980

-

-

211

232

-

-

1,758

Loss for the period

-

-

-

-

(6)

-

-

(1,127)

(1,133)

Retranslation of foreign currency

-

-

-

-

-

-

(39)

-

(39)

Total comprehensive income for the period

-

-

-

-

-

-

(39)

(1,127)

(1,172)

Balance at 31 March 2018

34,992

10,088

125

(25)

1,718

736

(20)

(13,773)

33,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal accounting policies

 

Jaywing plc is a Company incorporated in the UK and is AIM listed.

 

The financial information set out in this preliminary announcement does not constitute statutory information as defined in section 434 of the Companies Act 2006.

 

The consolidated balance sheet at 31 March 2018 and the consolidated statement of comprehensive income, consolidated cash flow statement, consolidated statement of changes in equity and associated notes for the year then ended have been extracted from the Group's 2018 statutory financial statements upon which the auditor's opinion is unmodified and does not include any statement under section 498 (2) or (3) of the Companies Act 2006.

 

Those financial statements have not yet been delivered to the registrar of companies.

 

The consolidated financial statements consolidate those of the Company and its subsidiaries (together referred to as the 'Group').

 

The consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU (Adopted IFRSs). The consolidated financial statements have been prepared under the historical cost convention, except for certain financial instruments that are held at fair value.

 

The accounting policies set out in the most recently published statutory financial statements have been followed. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these consolidated financial statements.

 

Judgements made by the Directors in the application of these 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 in note 11.

                                                                       

Going concern

The Directors have reviewed the forecasts for the period up to 30 September 2019 which have been adjusted to take account of the current trading environment.  The Directors consider the forecasts to be prudent and have assessed the impact of them on the Group's cash flow, facilities and headroom within its banking covenants.  Furthermore, the Directors have assessed the future funding requirements of the Group and compared them with the level of available borrowing facilities. Based on this work, the Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future.  For this reason they continue to adopt the going concern basis in preparing the financial statements.

 

 

1.     Segmental analysis

 

The Group reports its business activities in two areas: Agency Services and Media & Analysis, its two primary business activities. Central Costs represents the Group's head office function, along with intragroup transactions.

 

The Group primarily derives its revenue from the provision of digital marketing services in the UK. Approximately £1,843,000 of sales were made to clients in Australia. During the year one customer included within the Media & Analysis sector accounted for greater than 10% of the Group's revenue (2017: No customers).

 

 

 

 

 

 

For the year ended 31 March 2018

 

 

Agency Services

Media & Analysis

Central Costs

Total

 

£'000

£'000

£'000

£'000

Revenue

18,025

31,565

(2,049)

47,541

Direct costs

(2,718)

(10,157)

2,049

(10,826)

Gross profit

15,307

21,408

-

36,715

Operating expenses excluding depreciation, amortisation, loss before tax on disposal, exceptional items, acquisition related costs and charges for share based payments

(12,979)

(15,449)

(5,262)

(33,690)

Operating profit before depreciation, amortisation, loss before tax on disposal, exceptional items, acquisition related costs and charges for share based payments

2,328

5,959

(5,262)

3,025

Other operating income

64

-

-

64

Depreciation

(222)

(231)

(102)

(555)

Amortisation

(1,293)

(740)

-

(2,033)

Exceptional costs

(12)

(282)

(200)

(494)

Acquisition related costs

-

-

(827)

(827)

Charges for share based payments

(51)

(4)

(138)

(193)

Operating (loss) / profit

814

4,702

(6,325)

(1,013)

Finance income

 

 

 

-

Finance costs

 

 

 

(203)

Loss before tax

 

 

 

(1,216)

Tax expense

 

 

 

83

Loss for the period

 

 

 

(1,133)

 

For the year ended 31 March 2017

 

 

Agency Services

Media & Analysis

Central Costs

Total

 

£'000

£'000

£'000

£'000

Revenue

17,297

27,877

(637)

44,537

Direct costs

(6,296)

637

(8,560)

Gross profit

14,396

21,581

-

35,977

Operating expenses excluding depreciation, amortisation, loss before tax on disposal, exceptional items, acquisition related costs and charges for share based payments

(14,333)

(5,052)

(31,117)

Operating profit before depreciation, amortisation, loss before tax on disposal, exceptional items, acquisition related costs and charges for share based payments

2,664

7,248

(5,052)

4,860

Other operating income

26

-

-

26

Depreciation

(280)

(147)

(46)

(473)

Amortisation

(1,046)

(715)

-

(1,761)

Impairment to the carrying value of goodwill

(2,906)

-

-

(2,906)

Exceptional costs

(187)

(30)

(179)

(396)

Acquisition related costs

-

-

(1,115)

(1,115)

Charges for share based payments

(107)

(135)

(899)

(1,141)

Operating (loss) / profit

(1,836)

6,221

(7,262)

(2,906)

Finance income

 

 

 

165

Finance costs

 

 

 

(197)

Loss before tax

 

 

 

(2,938)

Tax expense

 

 

 

(43)

Loss for the period

 

 

 

(2,981)

 

 

Year ended 31 March 2018

 

 

 

 

 

 

 

Agency Services

Media &

Analysis

Central Costs

               Total

 

 

£'000

£'000

£'000

£'000

 

 

 

 

 

 

Assets

 

28,408

32,278

(6,399)

54,287

Liabilities

 

(3,536)

(7,069)

(9,841)

(20,446)

 

 

 

 

 

 

Capital employed

 

24,872

25,209

(16,240)

33,841

 

Year ended 31 March 2017

 

 

 

 

 

 

 

Agency Services

Media &

Analysis

Central Costs

               Total

 

 

£'000

£'000

£'000

£'000

 

 

 

 

 

 

Assets

 

29,404

31,722

(5,542)

55,584

Liabilities

 

(3,536)

(7,494)

(11,299)

(22,329)

 

 

 

 

 

 

Capital employed

 

25,868

24,228

(16,841)

33,255

 

Unallocated assets and liabilities consist predominantly of cash, external borrowings and deferred tax liabilities on intangible assets which have not been allocated to the business segments. All of the Group's assets are based in the UK.

 

Capital additions; Property, plant and equipment

 

 

Agency

Media & Analysis

Central Costs

               Total

 

Services

 

 

 

 

£'000

£'000

£'000

£'000

 

 

 

 

 

Year ended 31 March 2018

298

354

213

865

 

 

 

 

 

Year ended 31 March 2017

145

367

303

815

 

 

 

 

 

2.     Other operating income

 

2018

2017

 

£'000

£'000

 

 

 

Other operating income

64

26

 

During the years to 31 March 2017 and 31 March 2018 the Group received money from the administrator of a client for a contractual obligation to perform services on their behalf. During the year the Group received a further distribution of £64,000. It is anticipated there may be further distributions in the future but the Board is unaware of the quantum or timing of these potential receipts.

 

3.     Operating expenses

 

2018

2017

Continuing operations:

£'000

£'000

 

 

 

Wages and salaries

25,656

24,809

Share based payments

193

1,141

Depreciation

555

473

Exceptional items

275

310

Amortisation

2,033

1,761

Impairment to the carrying value of goodwill

-

2,906

Other operating expenses

8,861

7,423

 

37,573

38,823

 

 

 

Compensation for loss of office

219

86

 

219

86

 

37,792

38,909

                                                                                                                                             

Wages and salaries include £547,000 (2017: £305,000) of post-acquisition employment costs relating to the purchase of Massive Group PTY.

 

 

4.     Tax expense

 

2018

2017

 

£'000

£'000

Recognised in the consolidated statement of comprehensive income:

 

 

Current year tax

262

533

Origination and reversal of temporary differences

(345)

(490)

Total tax charge

(83)

43

 

 

 

Reconciliation of total tax charge:

 

 

Loss before tax

(1,216)

(2,938)

 

 

 

Taxation using the UK Corporation Tax rate of 19% (2017: 20%)

(231)

(588)

Effects of:

 

 

Non deductible expenses

112

402

Share based payment charges

36

229

Total tax charge

(83)

43

 

5.     (Loss) / profit per share

 

2018

2017

 

Pence per

Share

Pence per

Share

 

 

 

Basic

(1.25p)

(3.42p)

Diluted

(1.25p)

(3.42p)

 

(Loss) / profit per share has been calculated by dividing the (loss) / profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year.

 

The calculations of basic and diluted (loss) / profit per share are:

 

2018

2017

 

£'000

£'000

 

 

 

(Loss) / profit for the year attributable to shareholders

(1,172)

(2,965)

 

Weighted average number of ordinary shares in issue:

 

2018

2017

 

Number

Number

 

 

 

Basic

93,432,217

86,709,898

Adjustment for share options

6,126,322

7,959,291

Diluted

99,558,539

94,669,189

The basic and diluted earnings per share are the same due to the Group being loss making.

Adjusted earnings per share

 

2018

2017

 

Pence per

Share

Pence per

Share

From continuing and discontinued operations:

 

 

Basic adjusted earnings per share

1.73p

3.95p

Diluted adjusted earnings per share

1.62p

3.62p

 

Adjusted earnings per share have been calculated by dividing the profit attributable to shareholders before amortisation, charges for share options and acquisition related costs during the year by the weighted average number of ordinary shares in issue during the year. The numbers used in calculating the basic and diluted adjusted earnings per share are reconciled below:

 

 

 

2018

2017

 

£'000

£'000

 

 

 

(Loss) / profit before tax

(1,172)

(2,965)

Amortisation

2,033

1,761

Impairment to the carrying value of goodwill

-

2,906

Acquisition related costs

827

1,115

Charges for share based payments

193

1,141

Adjusted profit attributable to shareholders

1,881

3,958

Current year tax charge

(262)

(533)

 

1,619

3,425

 

 

6.     Acquisition of subsidiaries

 

During the year the Group made two acquisitions. On 30 August 2017 Jaywing plc acquired 100% of the ordinary shares in Head Offfice Limited ("Head Offfice") for cash consideration of £109,000 (excluding legal and professional fees of £11,000 which have been expensed through the statement of comprehensive income in administration expenses in the year). Up to a further £400,000 is payable for performance in the two years ending 30 August 2019.

HeadOfffice builds social communities through the creation of its own titles, reaching and engaging people on their terms and creating environments where brands can interact with ready-made, active and engaged communities. HeadOfffice also provides creative services and produces branded content in support of its publishing, working in partnership with brands, publishers and audiences. Founder, Gaz Battersby, comes with 15 years of experience and was a member of Epiphany's senior management team during the 2014 Jaywing acquisition, before setting up the independent digital consultancy.

Head Offfice was fully integrated into Epiphany on the date of acquisition and as a result the performance is not separately identifiable. The assets and liabilities acquired were as follows:

 

Book value

Fair value adjustments

 

£'000

£'000

£'000

 

 

 

 

Property, plant & equipment

7

-

7

Trade and other receivables

22

-

22

Cash and cash equivalents

(3)

-

(3)

Trade and other payables

(26)

-

(26)

Corporation tax repayable

-

-

-

Deferred tax

-

-

-

Net identifiable assets and liabilities

 

 

-

Goodwill on acquisition

 

 

112

 

 

 

112

 

Summary of net cash outflow from acquisitions:

Cash paid

 

 

109

Cash acquired

 

 

3

Net cash outflow

 

 

112

 

 

 

 

Fair value of consideration transferred

 

 

 

Amount settled in cash

 

 

112

 

 

 

The fair value of trade and other receivables are equal to the gross contractual amounts receivable and at the acquisition date all amounts were expected to be collected.

 

The goodwill amount represents intangible assets that do not qualify for recognition through the separability criterion or the contractual-legal criterion. This consists of cross-selling opportunities and expected synergies.

 

 

 

On 14 March 2018 Jaywing plc acquired 75% of the ordinary shares in Frank Digital PTY Limited ("Frank") for cash consideration of AUS$978,000 (£551,000) (excluding legal and professional fees of £185,000 which have been expensed through the statement of comprehensive income in administration expenses in the year). This was all paid on completion. Additional consideration is payable, separate to the acquisition costs, for the continuing employment and future services provided by the former owner of Frank. Further amounts are payable as they are earned up to a maximum amount of AUS$1,200,000, up until September 2020.

The 25% of the share capital owned by management is subject to a put / call option from September 2020. This will be valued at a multiple of the average audited EBITDA for the previous two financial years ending 30 June, subject to a maximum total consideration payable of $AUS4,750,000 for the entire acquisition.

Since the acquisition of Digital Massive in July 2016, Jaywing has experienced strong growth in Australia, alongside increasing demand from customers for a wider range of products and services. This strategic acquisition of Frank Digital serves to meet this customer demand and will further consolidate Jaywing's position in the growing Australian market, delivering additional scale and augmenting its existing services with website and digital campaign expertise.

The improved offering, with a broader set of products and services, is supported by current client opportunities and allows Jaywing greater opportunity for cross-sales. In the UK, Jaywing has seen success in cross-selling its products and services. In July 2017, Jaywing announced that it had increased the proportion of clients taking more than one service line from 1 in 4 in the previous year, to 1 in 3 of its top 50 clients.

The Directors believe that by being part of Jaywing, Frank Digital can accelerate its growth by leveraging strategic and operational support from the UK.

In the period since acquisition the subsidiary contributed £61,000 to Group revenues, £6,000 to EBITDA and £6,000 to the consolidated profit attributable to shareholders for the year ended 31 March 2017. The assets and liabilities acquired were as follows:

 

Book value

Fair value adjustments

 

£'000

£'000

£'000

 

 

 

 

Intangible assets

-

317

317

Property, plant & equipment

32

-

32

Trade and other receivables

82

-

82

Cash and cash equivalents

16

-

16

Trade and other payables

(293)

-

(293)

Corporation tax asset

-

-

-

Deferred tax

-

(54)

(54)

Net identifiable assets and liabilities

 

 

100

Goodwill on acquisition

 

 

451

 

 

 

551

 

Summary of net cash outflow from acquisitions:

Cash paid

 

 

551

Cash acquired

 

 

(16)

Net cash outflow

 

 

535

 

 

 

 

Fair value of consideration transferred

 

 

 

Amount settled in cash

 

 

551

Minority interest

 

 

211

 

 

 

762

 

 

 

The above figures are provisional. The fair value of trade and other receivables are equal to the gross contractual amounts receivable and at the acquisition date all amounts were expected to be collected.

 

The goodwill amount represents intangible assets that do not qualify for recognition through the separability criterion or the contractual-legal criterion. This consists of cross-selling opportunities and expected synergies.

 

The results for the Group had the acquisition during the year been at the beginning of the year can be analysed as follows:

 

 

Agency Services

Media & Analysis

Central Costs

Total

 

£'000

£'000

£'000

£'000

Revenue

18,025

32,762

(2,049)

48,738

Direct costs

(2,718)

(10,214)

2,049

(10,883)

Gross profit

15,307

22,548

-

37,855

Operating expenses excluding depreciation, amortisation, loss before tax on disposal, exceptional items, acquisition related costs and charges for share based payments

(12,979)

(16,412)

(5,262)

(34,653)

Operating profit before depreciation, amortisation, loss before tax on disposal, exceptional items, acquisition related costs and charges for share based payments

2,328

6,136

(5,262)

3,202

Other operating income

64

45

-

109

Depreciation

(222)

(273)

(102)

(597)

Amortisation

(1,293)

(742)

-

(2,035)

Exceptional costs

(12)

(282)

(200)

(494)

Acquisition related costs

-

-

(280)

(280)

Charges for share based payments

(51)

(4)

(138)

(193)

Operating (loss) / profit

814

4,880

(5,982)

(288)

Finance income

 

 

 

8

Finance costs

 

 

 

(280)

Loss before tax

 

 

 

(556)

Tax expense

 

 

 

81

Loss for the period

 

 

 

(475)

 

 

 

Note:

This information is based on the management accounts for Frank Digital.

 

 

 

 

 

 

 

7.     Goodwill

 

 

 

Goodwill

 

 

 

£'000

Cost and net book value

 

 

 

At 1 April 2017

 

 

33,722

Additions

 

 

774

Impairment

 

 

-

At 31 March 2018

 

 

34,496

 

Goodwill is attributed to the following cash generating units:

 

2018

2017

2016

 

£'000

£'000

£'000

 

 

 

 

Agency Services

 

 

 

Digital Media & Analytics Limited

438

438

438

Scope Creative Marketing Limited

5,550

5,550

5,550

Jaywing Central Limited

5,817

5,817

5,817

HSM Limited

295

295

3,201

Gasbox Limited

273

273

273

Bloom Media (UK) Limited

4,287

4,287

-

Media & Analysis

 

 

 

Epiphany Solutions Limited

5,937

5,825

5,825

Alphanumeric Limited

9,342

9,342

9,342

Massive Group PTY

1,895

1,895

-

Frank Digital PTY

662

-

-

 

34,496

33,722

30,446

 

Goodwill and other intangible assets have been tested for impairment by assessing the value in use of the relevant cash generating units.  The value in use calculations were based on projected cash flows in perpetuity.  Budgeted cash flows for 2016/17 to 2019/20 were used. These were based on a one year budget with growth rates of 5% to 10% applied for the following three years.  Subsequent years were based on a reduced rate of growth of 2% into perpetuity.

 

The average year on year growth in earnings before interest, tax, depreciation and amortisation (EBITDA) which 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

 

 

 

 

2016/17

5.0% - 10%

 

2017/18

5.0% - 10%

 

2018/19

2.5% - 10%

 

Perpetuity

2.0%

 

 

These growth rates are based on past experience and market conditions and discount rates are consistent with external information. 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 discount rate used to test the cash generating units was the Group's pre-tax Weighted Average Cost of Capital ("WACC") of 11.5% (2017:10.6%). The individual cash generating units were assessed for risk variances from the WACC, but in the absence of geographical risk, currency risk and any significant price risk variations, the same WACC was used for all the cash generating units.

 

As a result of these tests an impairment of £Nil was considered necessary (2017: £2,906,000).

 

The Directors have performed a sensitivity analysis in relation to the WACC used, which showed that no impairment would be required for WACCs of up to 16% in other CGU's.

 

The Directors have also performed a sensitivity analysis in relation to the year on year growth in EBITDA. If the growth rates were to be reduced by 1% in each CGU no impairment charge would be required.

 

 

 

8.     Other intangible assets

 

 

Customer

relationships

 

Order books

 

Trademarks

Development

costs

Total

 

£'000

£'000

£'000

£'000

£'000

Cost

 

 

 

 

 

At 1 April 2016

21,348

1,457

1,025

235

24,065

Additions during the year from acquisitions

1,821

-

55

493

2,369

Additions during the year

-

-

-

60

60

Disposal

-

-

-

-

-

At 31 March 2017

23,169

1,457

1,080

788

26,494

Additions during the year from acquisitions

317

-

-

-

317

Additions during the year

-

-

-

448

448

Disposal

-

-

-

-

-

At 31 March 2018

23,486

1,457

1,080

1,236

27,259

 

 

 

 

 

 

Amortisation

 

 

 

 

 

At 1 April 2016

15,743

1,457

104

199

17,503

Amortisation charge for the year

1,584

-

67

110

1,761

Disposals

-

-

-

-

-

At 31 March 2017

17,327

1,457

171

309

19,264

Amortisation charge for the year

1,852

-

79

102

2,033

Disposals

-

-

-

-

-

At 31 March 2018

19,179

1,457

250

411

21,297

 

 

 

 

 

 

Net book amount

 

 

 

 

 

At 31 March 2018

4,307

-

830

825

5,962

At 1 April 2017

5,842

-

909

479

7,230

At 1 April 2016

5,605

-

921

36

6,562

 

The cost of brought forward customer relationships was determined as at the date of acquisition of the subsidiaries by professional valuers. The valuations used the discounted cash flow method, assuming rates of customer attrition at 10% and sales growth at 2% each year. The discount rate applied at that time to the future cash flows were specific to each subsidiary and were all in the range 14.6% to 15.5%.

 

Trademarks represent the trading names used by the company. These are estimated to have an economic life of 20 years. The valuation used the discounted cash flow method, assuming an estimated royalty rate of 2% and sales growth of 2% each year. The valuation assumes that each year 80% to 90% of revenues are generated using the Trademark and applied a discount rate of 19%.

 

The order book represents contracted revenues over the next 12 months. The valuation used the discounted cash flow method, assuming a net operating profit margin of 30.5%. The discount rate applied was 15.8%.

 

Goodwill and other intangible assets have been tested for impairment. The method, key assumptions and results of the impairment review are detailed in note 14. On the basis of this review, it has been concluded that there is no need to impair the carrying value of these intangible assets (2017: £Nil).

 

 

9.     Bank and overdraft, loans and borrowings

 

2018

2017

2016

 

 

£'000

£'000

£'000

 

 

 

 

 

 

Summary

 

 

 

 

Borrowings

6,550

5,750

5,675

 

 

6,550

5,750

5,675

 

Borrowings are repayable as follows:

 

 

 

 

Within one year

 

 

 

 

Borrowings

4,750

4,750

4,612

 

Total due within one year

4,750

4,750

4,612

 

 

 

 

 

 

In more than one year but less than two years

1,800

1,000

1,063

 

In more than two years but less than three years

-

-

-

 

In more than three years but less than four years

-

-

-

 

Total amount due

6,550

5,750

5,675

 

 

 

 

 

 

 

Average interest rates at the balance sheet date were:

 

%

%

%

 

 

 

 

 

Term loan

 

2.25

2.61

3.56

Revolver loan

 

2.25

2.51

3.51

             


As the loans are at variable market rates their carrying amount is equivalent to their fair value.

 

The additional borrowing facilities available to the Group at 31 March 2018 was £2.0 million (2017: £2.0 million) and, taking into account cash balances within the Group companies, there was £2.6 million (2017: £4.2 million) of additional available borrowing facilities.


A Composite Accounting System is set up with the Group's bankers, which allows debit balances on overdraft to be offset across the Group with credit balances.

 

Reconciliation of net debt

 

 

1 April 2017

Cash flow

Non-cash items

31 March 2018

 

£'000

£'000

£'000

£'000

 

 

 

 

 

Cash and cash equivalents

2,216

(1,584)

-

632

 

2,216

(1,584)

-

632

Borrowings

(5,750)

(800)

-

(6,550)

Net debt

(3,534)

(2,384)

-

(5,918)

 

 

 

 

 

 

 

10.   Share capital

Authorised:

 

 

 

 

45p deferred shares

5p ordinary shares

 

£'000

£'000

Authorised share capital at 31 March 2017 and at 31 March 2018

45,000

10,000

                              

Allotted, issued and fully paid:

 

 

 

 

 

45p deferred shares

5p ordinary shares

 

 

Number

Number

£'000

At 31 March 2017

67,378,520

86,709,898

34,657

Issue of share capital

-

6,536,450

326

Issue of share options

-

185,869

9

At 31 March 2018

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 will also be incapable of transfer and no share certificates will be issued in respect of them.

 

 

11.   Accounting estimates and judgements

Accounting estimates

 

Impairment of goodwill and other intangible assets

                                                           

The carrying amount of goodwill is £34,496,000 (2017: £33,722,000) and the carrying amount of other intangible assets is £5,962,000 (2017: £7,230,000). 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.

 

Share based payment


On 4 May 2016 and 30 September 2016, share options were granted to employees in order to incentivise performance. These share options will vest based upon conditions which relate to either EBITDA performance in the period commencing 1 April 2016, or the share price at various future dates.

 

The share based payment charge consists of two elements, the charge for the fair value at the date of grant and a charge for the employer's NI. The fair value charge has been assessed using an external valuation company, and judgement has been made on the number of shares expected to vest based on the achievement of EBITDA and share price targets.

 

Accounting judgements

 

Recognition of revenue as principal or agent

 

The Directors consider that they act as a principal in transactions where the Group assumes the credit risk. Where this is via an agency arrangement and the Group assumes the credit risk for all billings it therefore recognises gross billings as revenue.

 

 

12.   Annual reports and accounts

Copies of the annual report and accounts for the year ended 31 March 2018 together with the notice of the Annual General Meeting will be issued to shareholders shortly and will be available to view and download from the Company's website: jaywingplc.com.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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