Jaywing makes board changes amid mixed trading
By Josh White
Date: Monday 13 May 2024
(Sharecast News) - Jaywing announced a number of changes to its board on Monday, with chief executive officer Andrew Fryatt having resigned, effective immediately.
The AIM-traded firm said that at the same time, its chief financial officer Christopher Hughes would assume a broader role encompassing operations as a combined chief operating officer and CFO.
Hughes would join the board with immediate effect.
David Beck, who joined the board in April, would meanwhile take on the role of executive chairman, succeeding Ian Robinson.
Robinson would transition to a non-executive director role, retaining his position on the board.
Looking at its trading, Jaywing said that despite challenging market conditions in the past financial year, it anticipated reporting flat year-on-year revenue in the 2024 financial year on a constant currency basis, with a slight decrease in real terms.
The company said its Australia division saw robust growth, with revenue increasing nearly 30% in local currency.
It ended the financial year to 31 March by securing several major contracts in the UK and Australia, including significant work from an existing Australian client in the UK.
The positive impact of those wins, coupled with cost reductions implemented in the UK agency division in 2024, was expected to be reflected in the full-year results.
Conversely, the UK consulting division reported an unexpectedly weak performance in the last quarter of the year and into the first quarter of the current year due to scheduled work with a major customer not materialising.
Jaywing said that revenue shortfall, combined with increased operating expenses and the need for further reductions, had strained the company's working capital.
As a result, it intended to initiate discussions with its lenders, DSC Investment Holdings and Lombard Odier Asset Management Europe, represented on the board, to explore increasing the existing facility.
While market conditions remained challenging, the industry outlook was showing signs of improvement.
Jaywing said it remained focussed on demonstrating the effectiveness of its data-led offerings, which were resonating strongly with both new and existing customers.
The company said it was aiming to achieve operational efficiencies, margin improvement, and enhanced financial results once its working capital had normalised.
On 4 March, Jaywing announced its exploration of strategic options, including a possible sale of the company, in response to the lenders' desire to recapitalise the business.
However, given the easing of tough trading conditions over the last few years and increased business confidence, coupled with cost-cutting measures, the board said it had concluded that a sale of the company was not in the best interests of stakeholders.
As a result, the board had terminated the strategic review under the Takeover Code, and was no longer in an offer period.
"Andrew has led the business through a challenging period and the board would like to thank him for his contribution in his four years with the group," said chairman Ian Robinson.
"After nearly three years with the group, Christopher Hughes is ready to step up to the COO role; the three CEOs of the group's operating businesses will report to him.
"David Beck is an experienced executive with both relevant industry experience and a strong track record, he will focus on helping the executive team to build and grow the business."
At 1137 BST, shares in Jaywing were down 14.32% at 2.7p.
Reporting by Josh White for Sharecast.com.
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