Acquisitions cost Jaywing as it dips into the red

Search marketing agency Jaywing enter the red, partly due to the cost of acquisitions.

After making £1m in pre-tax profits in the year ended in 2016, for the year to 31 March 2017, the company made a loss of £2.98m.

They said they had incurred £2.90m of goodwill impairment charges relating to its contact centre, following the loss of a major client in the year and a challenging outlook due to cost increases from a rent review, the national living wage and the apprenticeship levy.

£1.11m of costs relate to acquisitions, including that of Bloom in September 2016 and Sydney’s Digital Massive in July 2016.

The business is also working on the development of new marketing technology that incorporates the use of artificial intelligence and virtual reality, under the Jaywing Intelligence brand.

Ian Robinson, chairman of Jaywing also announced that a progressive dividend policy would start in 2018, meaning that dividends would go up in relation to earnings per share, but would not necessarily reduce if earnings per share falls.

He said: “It has been another year of significant progress for Jaywing. In the year ended 31 March 2017 we achieved growth in gross profit and EBITDA of 13% and 12% respectively, whilst net debt reduced by £1.8m on the back of strong cash generation and free cash flow of £2.9m. Our two acquisitions have provided the business with a dedicated Marketing Technology division and the first step in our international expansion.

“We are also pleased to announce that we intend to implement a progressive dividend policy starting from the financial year ending 31st March 2018.”