Jaywing reports strong growth, announces possible acquisition

Marketing and data science company Jaywing said in a trading update on Thursday that its net revenue for the year ended 31 March was expected to have risen 16% to £23.3m, as it also announced the possible acquisition of Midisi.

The AIM-traded firm reported strong growth in retail, financial and professional services, and in Australia.

It said its new business wins and pipeline continued to be strong, with new client wins including Rush Hair and Beauty, Hallmark Cards, Cox Automotive, CityFibre and Skipton Building Society.

Combined with “careful cost management”, Jaywing said that had enabled a “significant improvement” in underlying profitability, with adjusted EBITDA broadly in line with market expectations.

Jaywing also announced that it was in discussions with the shareholders of Midisi, a marketing software development business which owns the intellectual property rights for the ‘Decision’ software which Jaywing currently sells under licence, over the potential acquisition of Midisi.

The board said that, while discussions were ongoing over the terms of any acquisition and there could be “no certainty” as to the outcome, it expected that it would comprise a “substantial transaction” under the AIM rules.

Partly in anticipation of the potential transaction, and to provide further working capital, Jaywing said it had increased the headroom in its existing short-term finance facility by £1m, through a variation of the existing agreement with its lenders, DSC Investment Holdings and 1798 Volantis Fund.

If the Midisi acquisition is completed, that would cover the initial transaction costs, with subsequent payments funded out of the company's cash flows.

The firm also announced that it was in discussions with its lenders over potentially rescheduling the existing debt arrangements.

“I am pleased to report that Jaywing has entered the new financial year on the back of a strong outturn,” said chief executive officer Andrew Fryatt.

“The combination of double-digit revenue growth and a more efficient cost base has enabled us to increase underlying profitability, giving us confidence for the year ahead.

“Whilst we remain cautious about the overall economic outlook, our pipeline of new business is stronger than at any time in the last three years, and we are continuing to win new clients in both the UK and Australia.”

Jaywing said it would release its results for the 12 months ended 31 March in early September, with its annual general meeting following by the end of that month.

At 0926 BST, shares in Jaywing were flat at 10.25p.

Reporting by Josh White at Sharecast.com.