Jaywing reports resilient performance as its explores options

Integrated marketing, risk and data consultant Jaywing reported resilient performance in a trading update on Monday, despite challenges in the UK agency market.

The AIM-traded firm said its interim figures showed robust trading in Australia and continued strength in its risk consulting business, effectively mitigating the UK's market downturn.

It said cost-cutting measures, particularly in the UK, had been instrumental in maintaining operational efficiency amidst market softness.

Encouraging signs of recovery were said to be emerging, with Jaywing securing significant new contracts, including partnerships with Subaru Europe, Crocs Asia-Pacific, and Homes England.

Furthermore, the company said it was actively pursuing additional opportunities, notably in the UK agency sector and its AI-based Decision software segment, which the board said promised high margins and momentum.

As of 31 January, Jaywing's net debt saw a slight reduction to £11.77m from £11.93m in September.

Operating cash flow generation was expected throughout 2024 and beyond, with limited restructuring requirements and no significant capital expenditure forecasted, positioning the company for a stronger balance sheet.

To bolster working capital without undue strain, Jaywing said it had increased its existing loan facility by £0.57m, bringing the total facility to £9.77m.

While the company's lenders expressed continued support for its improving performance, they reportedly advised Jaywing to refinance the loan facility to establish a more suitable long-term capital base.

As a result, Jaywing was exploring strategic options, including a potential sale of the company, to ensure sustained client service delivery and loan facility repayment.

Board restructuring was accompanying the strategic shifts, with the appointment of new directors as per the revised loan agreement.

Henry Turcan and Rob Giles were nominated by Lombard Odier, while David Beck was nominated by DSC.

Philip Hanson was resigning from the board, but would continue to provide advisory support to Jaywing.

The additional capital injection by the lenders, DSC Investment Holdings and Lombard Odier Asset Management Europe, constituted related party transactions.

Jaywing said its independent director, Andrew Fryatt, after consultation with Spark Advisory Partners, deemed the transaction terms fair and reasonable for shareholders.

At 0918 GMT, shares in Jaywing were up 4.7% at 3.46p.

Reporting by Josh White for Sharecast.com.