Marketing agency’s profit falls amid uncertain first half of the year

Sheffield headquartered marketing agency Jaywing has made seen gross profit for six months to the 30 September 2019 down by 20% to £11,996,000.

The firm noted that the first quarter of the year was very weak with a modest improve in the second quarter.

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

“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. However, trading in our Australia operation continued to show profitable growth with EBITDA increasing by 40%.

“Overall, like for like Gross Profit for the half year fell by 20% to £12m but the impact on EBITDA was mitigated through cost management and efficiencies resulting in a like for like EBITDA loss of £551k. Despite this, we have generated a small positive cashflow from operations.

“On 2 October 2019, following the half year period, we announced that entities associated with two of our major shareholders had acquired the Company’s existing secured loan facility of £5.2 million owed to Barclays Bank plc. The major shareholders immediately provided the Company with additional secured facilities by increasing the Jaywing Facility by £3.0 million to £8.2 million, which enabled the Company to repay its outstanding overdraft and provided it with additional working capital.

“By successfully tackling the Group’s funding challenge Jaywing is now in a financially stronger position.”

The firm has also confirmed plans “reshape and re-engineer the organisation” to meet the need of clients and how they want work with agencies.

The announcement also highlighted that Adrian Lingard, Chief Operating Officer, has also left his role on the Board of Jaywing with immediate effect,