LONDON (ShareCast) - (ShareCast News) - Digital marketing firm Jaywing saw a small increase in its revenue over the first half of the trading year, but higher expenses resulted in wider losses that sent shares tumbling on Tuesday morning.
Jaywing's gross profit increased from £17.1m to £17.8m for the six months leading to 30 September amid difficult trading conditions, as the downturn in consumer-led businesses across the UK since the snap election in June led several clients to cut back on marketing costs.

Also as a result of the lower marketing spend by clients, the group's EBITDA margin shrank from 12.5% to 8.25%, dragging EBITDA down to £1.45m from the £2.13m reported a year earlier.

Yet operating expenses grew from £16.44m to £17.1m, adding to the pressure on operations and sending pre-tax losses down to £309,000 from the £204,000 recorded a year before.

Net debt rose from £3.39m to £8m due to planned earn-out payments and a negative movement in working capital versus the strong debtors' position at the end of Jaywing's previous trading year.

Looking forward, chief executive Rob Shaw, said "We continue to actively pursue our strategy to scale the business by looking at complementary acquisitions in other territories and the UK. Adding new capabilities to our successful Australian business is a priority as is adding new services to our online media and data science offerings."

Jaywing announced a basic loss per share of 0.44p, a slight improvement on the 0.45p posted a year earlier.

Martin Boddy, chairman of Jaywing, said, "With limited exposure to growth in overseas markets to offset this, our UK H1 financial performance has been adversely impacted and we expect profits to be substantially below market expectations for the full financial year."

Boddy also said that despite the less-than-desirable results, the group remained "encouraged" with the strong performance of its media and analysis segment during the half, thanks to a strong demand for its data science consultancy services.

"We have experienced strong growth in our Australian operation and have secured some excellent new business wins across the UK business, including a rapidly growing company in the UK financial services sector," he added.

As of 1045 GMT, shares had fallen 24.41% to 24.00p.

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