‘Disappointing’ year for listed marketing agency, before pandemic struck
Sheffield-headquartered marketing agency Jaywing says the year ended 31 March 2020 has been difficult for the business, with tough market conditions impacting its trading and cash flow performance in the first half.
It adds a restructuring plan delivered a turnaround in second half performance, but notes the Covid-19 outbreak in March 2020 then cut its revenues by around 20% in the first quarter of the new financial year.
Measures taken to secure the company’s financial position during the pandemic have included voluntary salary cuts for all employees and use of the Government’s furlough scheme for around 50 members of staff.
The firm’s audited results for the year ended 31 March 2020 report net revenue of £24m, down from £30m the previous year.
Jaywing made a pre-tax loss from continuing operations of £9.4m (2019: £1.1m loss).
Cashflow generated from operations including IFRS 16 amounted to £1m (£0.3m excluding IFRS 16) compared with £2.4m for the prior year excluding IFRS 16.
The adjusted EBITDA loss amounted to £0.2m (a loss of £0.9m excluding IFRS 16) compared with a profit of £2.6m for the prior year (excluding IFRS 16).
Andrew Fryatt, chief executive officer, said: “In the face of Covid-19, significant reductions in marketing spend across the industry have severely impacted many businesses, and, with the rate of recovery continuing to be unclear, it is difficult to confidently assess the outlook for FY 21.
“Our broad client mix means we are less reliant on any one specific sector and more able to manage variations in market conditions.
“Some clients have already returned to pre-pandemic spend levels, but others continue to defer expenditure.
“We have nonetheless continued to win new business and have a good pipeline of new opportunities.
“The actions taken to support the business through the pandemic have very effectively protected profitability and cashflow, but we believe we are still at least six months away from revenues returning to pre-pandemic levels in the UK.
“In Australia, where the pandemic seems to now be more controlled, revenues are already close to quarter four’s level, which is very encouraging.”
Ian Robinson, the business’s non-executive chairman, said he was pleased to see the Australian arm of the business continue to perform well throughout the year delivering strong net revenue and cash flow generation.
He added: “I am pleased to see the results of the actions taken to improve profitability and cash flow performance and would like to thank our people throughout the group both in the UK and Australia for their dedication and achievements during these challenging times.
“Whilst the general business outlook remains uncertain, I believe the actions we have taken have placed us in a better position to adapt to change.”