Jaywing plc
Annual Report and Accounts
For the year ended 31 March 2019
Company number 05935923
Contents
Business Overview
Financial highlights from continuing operations
Chairman’s statement
Chief Executive's Report
CFO statement
(Strategic Report)
Board of directors
Advisers
Principal risks and uncertainties
Directors’ report
Directors’ remuneration report
Corporate governance
Directors’ responsibilities statement
Report of the Independent Auditor to the Members of Jaywing plc
Consolidated financial statements
Company financial statements
Shareholder information
QCA Corporate Governance Index
2
4
5
6
8
10
11
12
14
16
20
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29
62
77
78
1 Jaywing plc Annual Report and Accounts 2019
Business Overview
Jaywing is an award-winning data science led performance marketing agency and consulting business operating in the UK and
Australia.
Jaywing helps its clients find smart solutions to deliver profit growth and build brand value. It uses its unique expertise to create
compelling insights from complex customer behaviour and builds these into effective digital marketing, customer engagement and
portfolio management activities.
The company employs around 350 highly skilled people, including c.40 in Australia, in a wide range of specialisms working in a
highly collaborative operating model and culture.
Revenue Model
Framework agreements (1 to 2 year) and
projects revenues with long standing clients plus
recurring revenues from license sales of
technology product
Data,
Analytics
and
Technology
(26% of GP)
12-18 month contracts with
committed monthly billings ranging
from £6k to £50k
Online
Performance
(branded
Epiphany)
(43% of GP)
Brand
Performance
(31% of GP)
Framework agreements (2 to 3
year) and projects revenues with
long standing clients
The strategic direction of travel is towards
deeper engagements with clients via ongoing
licensed services. This strategy and proposition
is called ‘One Jaywing’
2 Jaywing plc Annual Report and Accounts 2019
Clients
In the UK, target clients are typically the B2C Divisions of FTSE 250 companies, other large corporates and entrepreneurially-led
high growth B2C businesses. Jaywing works with clients across a wide range of sectors developing and sharing best practice.
Client concentration risk is relatively low, with the largest client accounting for only c.6% of annual Gross Profit and the largest
industry sector accounting for c.25% (Financial Services, where work is undertaken for both marketing and risk functions thereby
reducing the concentration risk).
Gross profit from Australia now accounts for 13% of overall Jaywing GP. We expect this number to grow further as we continue to
demonstrate the value of the agencies we have acquired and integrated in Sydney.
People
“Jaywingers” are high calibre specialists and collaborators, many with scarce skill sets. They include:
• home grown talent recruited through sponsored degree courses with University of Leeds and University of Sheffield, providing the
best of the intake who can hit the ground running
• experienced London agency staff looking to relocate and attracted by the nature of Jaywing’s challenger positioning
• specialists who have reached the glass ceiling working in client-side organisations and see an opportunity to further develop their
career in an agency role with Jaywing
• PhDs with backgrounds in data science and artificial intelligence.
3 Jaywing plc Annual Report and Accounts 2019
Financial highlights from continuing operations
Revenue
Gross profit*
Adjusted EBITDA** (note 1)
Adjusted EBITDA margin***
Loss after tax from continuing operations
Basic EPS on adjusted EBITDA
Basic EPS from continuing operations
Net debt
Year to 31 March 2019
£’000
35,554
29,845
3,329
11.2%
(935)
3.6p
(1.15p)
(4,960)
Year to 31 March 2018
£’000
41,511
30,849
2,889
9.4%
(992)
3.1p
(1.06p)
(5,918)
* Revenue less third party direct costs of sale
** Before share-based charges, exceptional items and acquisition related costs
*** As a percentage of gross profit
Highlights:
• Grew adjusted EBITDA by 15% in challenging market conditions
Increase in adjusted EBITDA margin from 9.4% to 11.2%
•
Reduction in net debt of nearly £1.0m
•
Sale of non-core, lower margin contact centre business HSM Limited used to part fund re-structuring costs
•
Slow trading conditions in the UK in Q4 of FY19 and the first quarter of FY20, leading to a requirement for additional
•
funding
The Company remains in constructive dialogue with its debt and certain equity holders with regards to the Company’s
financing requirements
•
Commenting on the results, Martin Boddy, Chairman of Jaywing, said,
"During the year, overall demand in the UK was relatively soft and at times unpredictable. Despite this, margins improved
significantly, with adjusted EBITDA increasing by 15% despite an overall 3% reduction in Gross Profit (GP). Encouragingly, in the
UK we saw a return to top line growth in our Online Performance segment, with GP growing by 10%. But it was in Australia where
we experienced the strongest growth and our Australian operation now accounts for 13% of the overall GP.
The quality of income also improved with nearly 70% of our top 50 clients now buying more than one service line and 50% of
revenues being visible beyond 6 months.
“The disposal of a non-core call centre business (HSM Limited) has allowed management to concentrate on the core business. It
provided the cash to undertake some re-structuring and sharpen our proposition to clients whose main priority is driving efficiency in
marketing. With its data, digital and technology focus all delivered through a collaborative operating model, Jaywing is well
positioned to take advantage of any hardening in marketing spend as and when it comes.
Trading in the final quarter of FY19 and the first quarter of the new financial year was particularly challenging and, whilst improving
during the second quarter, the ongoing uncertain economic and political outlook is likely to continue to impact client activity. The
Company remains in constructive dialogue with its debt and certain equity holders with regards to the Company’s financing
requirements with a view to obtaining an enlarged working capital facility.”
4 Jaywing plc Annual Report and Accounts 2019
Chairman’s Statement
A leaner and more focused Jaywing with the right business model for the future
The last financial year has seen our adjusted EBITDA margin recover significantly, from 9.4% to 11.2% on a like-for-like basis. This
was achieved through initiatives including selective re-structuring, cost reduction and the disposal in January of a non-core and
lower margin contact centre business (HSM Limited). HSM Limited is accounted for as a discontinued operation.
Overall, on a like-for-like basis, our Gross Profit (GP) reduced by £1.0m year-on-year, making the adjusted EBITDA margin
improvement all the more impressive. The fall in GP was in the main related to clients whose spend with us is discretionary, rather
than on monthly performance marketing contracts. Our Online Performance segment experienced strong growth in GP in both the
UK and Australia.
The disposal of the legacy contact centre business was a key strategic step for us. It has allowed management to focus on the core
business and provides the cash to carry out some re-structuring to improve margins. We have sharpened our proposition and this
has made it easier for clients to understand what we do and where we can uniquely add value. Additionally, I hope that the new
segmental reporting will help existing and potential investors gain a greater insight into what we do and how we are performing.
Our ‘One Jaywing’ strategy, proposition and client-centric operating model is fundamental to our future growth and it is pleasing to
see that c.70% of our top 50 clients now buy more than one service line from us. Enabling our services with technology and creating
a stream of recurring license fee revenues is also going to be key. Our investment in AI-powered technology over the past two years
is starting to bear fruit, with most new business pitches now featuring at least one of these tools. Finally, expanding our engagement
model with clients to open up more opportunities to provide strategic solutions, by combining our data, analytics, AI and digital
marketing specialisms, is an increasing focus for us now that we have a growing number of compelling case histories.
In the marketing industry, clients are forcing a major redesign of the traditional network agency model. This creates space for a
credible challenger such as Jaywing with the right specialisms and technology allied to a collaborative operating model. Whilst the
very short-term outlook in the UK is going to be impacted by economic uncertainty and therefore difficult to predict, the mid-term
outlook is far more appealing, with most market commentators and industry surveys predicting healthy growth rates in online
marketing in particular. As confidence returns to clients, and their longer-term marketing plans, Jaywing is well placed to compete
for this spend with its AI-powered technology and collaborative ‘One Jaywing’ operating model.
During the year we have sought to embrace rather than simply comply with the QCA’s Corporate Code of Governance and my aim
is to build on the initiatives that we have already taken.
Our people - the ‘Jaywingers’ - are a talented and determined group of specialists, who represent scarce resources in our industry.
On behalf of the Board, I would like to thank them all for their continuing support, hard work and enthusiasm.
Martin Boddy
Chairman
5 Jaywing plc Annual Report and Accounts 2019
Chief Executive’s Report
More focused and more relevant than ever
The sale of HSM Limited has allowed us to reposition Jaywing as an integrated performance marketing agency and consulting
business, delivering smart and joined-up solutions that generate measurable results across diverse marketing channels.
Fundamental to this is our increasingly consultancy-led approach, our underpinning of services with our AI-powered technology and
our ‘One Jaywing’ operating model and proposition.
It is no surprise that this is finding favour with clients and prospects alike as driving efficiency in marketing is the priority for CMOs,
according to a study by Forbes Insights in November 2018. Furthermore, there has been growing dissatisfaction with the traditional
network agency model. Instead, marketers are favouring new agency models, including greater use of specialists, greater
collaboration and the use of in-house teams (according to World Federation of Advertisers in December 2018).
We are also seeing our top 50 clients increasingly realising the benefits of our ‘One Jaywing’ proposition, with nearly 70% of them
taking more than one service, and with some taking up to six. In the coming year, we will expand this initiative further and target our
top 100 clients as well as new prospects.
Delivering improved margins in challenging times
Our financial focus has been on improving our EBITDA margin in a UK trading environment where top line growth has been
challenging. Adjusted EBITDA was £3.3m, representing an increase of 15% on the previous year, and this was achieved despite a
£1m reduction in Gross Profit (GP). Re-structuring and planned cost reductions have led to an annualised cost saving to the
business of around £2.5m. As with any re-structuring, there is a cash impact to executing this and this has been funded in part from
the sale proceeds of HSM Limited.
Opportunities for growth
Whilst the ongoing political and economic uncertainty is supressing growth in adspend, the latest Advertising Association/WARC
expenditure report produced in January 2019 still predicts overall growth in 2019 of 4.6% in the UK. However, the latest and more
recent IPA Bellwether report has revealed findings in the UK market that correlate with the challenges Jaywing has been facing with
UK clients. Marketing budgets have flattened in calendar Q2 2019, caused by caution and delayed decision making.
In the medium-term, cumulative annual growth rate (CAGR) is predicted to be 6.8% (Internet Advertising Bureau/PWC forecast
produced in June 2018) with 75% of this relating to growth in pay-per-click (PPC) advertising, due to better use of AI and integration
with retail (Zenith Media study in September 2018). With our AI-powered PPC platform, Decision, Jaywing will be even better placed
to benefit from this growth once it is fully integrated into our Epiphany Search Marketing operation.
Improved Segmental Reporting
Following the sale of HSM Limited in January 2019, we have created new segments that will be used in our future reporting. These
segments more closely reflect how we operate our business and how these three areas work together to deliver our ‘One Jaywing’
proposition to clients.
Our three trading segments will now be shown as:
• Online Performance;
•
•
Data, Analysis and Technology; and
Brand Performance.
Any good marketing campaign must make use of creativity and brand (Brand Performance), online channels and techniques (Online
Performance), all underpinned by Data to demonstrate solid, measurable, results enhanced by the latest technology (Data, Analysis
and Technology).
We believe that these new segments will allow us to track the performance of the three most important elements of any modern
marketing campaign and how well they all work together.
Across each of these segments, we can also identify further opportunities to grow our recurring revenue streams, which is one of
the key value drivers for the Group at large.
Online Performance
The Online Performance segment has seen good growth this year from our search marketing brand Epiphany and our operations in
Australia as clients continue to invest in online advertising channels. GP has increased by £1.2m to £12.7m (10%) and EBITDA has
increased by £1.4m to £2.7m (113%). Revenue from this segment is largely recurring, with contracts running from between 12 and
18 months. Epiphany is responsible for placing approximately £50m of media spend with Google and other advertising platforms,
although our policy is that this is invoiced directly by the platform to our clients.
Although the length of the sales cycle markedly increased in Q4 in the UK, the sales pipeline remains strong. In paid search (PPC)
specifically, going forward we feel there is a significant opportunity for us to take greater share of this fast-growing area of marketing
spend by fully integrating our paid search technology (‘Decision’) into the Epiphany operation.
Data, Analysis and Technology
Jaywing’s 60 data scientists represent a scarce resource in the industry and we believe provide the Company with a major source of
competitive advantage.
6 Jaywing plc Annual Report and Accounts 2019
With a key project for one of our largest financial services clients coming to an end last year and moving to a more modest retainer,
we have focused heavily on our marketing consulting capabilities, showing how our consulting insight can be used to analyse the
data from complex marketing campaigns. It was pleasing to see this capability recognised when we were chosen earlier this year by
Asda to work with them on measuring the effectiveness of their marketing and understanding how their investment can be attributed
across a number of advertising channels, clearly showing what results their marketing spend is delivering.
We have spent much of the last 12 months ensuring that the cost base and management structure of our technology division
(Jaywing Intelligence) was appropriate and have seen a significant year-on-year swing in the profitability of this area.
According to Econsultancy in July 2018, digital marketing has been among the top early applications of Artificial Intelligence.
However, less than one-tenth of companies’ digital budgets goes toward AI - though respondents overwhelmingly expect AI
investments will increase in the coming years (71% say so). Consequently, we have high hopes for its future growth.
The value of the technology within Jaywing Intelligence was demonstrated recently when it won awards for its work driving the
performance of paid search for Domino’s Pizza, which has had a dramatic contribution to their recent trading performance.
Our use of Artificial Intelligence has also been proven in the credit risk space, where we have strong consultancy credentials, with
our Archetype product being adopted by companies including Shawbrook Bank, Nationwide Building Society and Hitachi Capital.
This technology can significantly improve the credit risk scorecards used by large lenders, reducing their exposure to bad debt.
Brand Performance
Our Brand Performance segment generated £9.2m of GP and £1.0m of EBITDA. Both of these show a reduction from the prior year,
partly because we did not see the usual increase in discretionary spend from clients with December year ends who would typically
look to spend their new budgets in January, February and March. We continue to work with many high-profile brands including
Pepsi, Doritos and Castrol as well as securing new clients including Goodyear and SimplyBe.
Revenues in this segment tend to be more discretionary in nature and often project based, so whilst it is disappointing to see GP
falling, it’s not entirely surprising in an environment with such high levels of economic and political uncertainty. Our ‘One Jaywing’
approach and increase in selling multiple services into clients is reducing our dependency on this project-based work and increases
the likelihood of ongoing repeat revenues
International
Our business in Australia, which is predominantly reported under the Online Performance segment, continues to grow well; it was
the fastest growing area within Jaywing over the past 12 months and shows no sign of slowing down. On an organic only basis,
EBITDA has grown by 83%. When the acquisition of Frank Digital is added, EBITDA growth increases to 131%.
The market in Australia is strong and attractive to us for a number of reasons. For example, digital marketing is lagging some way
behind the UK, and procurement functions are less prevalent in marketing services. Consequently, Jaywing can generate
opportunities by showcasing our UK work and enjoy shorter sales cycles.
It has been heartening to see our integrated performance marketing services being adopted so readily by new clients and the sales
pipeline continues to build.
Revenues from Australia now account for 13% of overall Jaywing GP and as we continue to demonstrate the value of the agencies
we have acquired and integrated in Sydney, we expect this number to grow further.
Outlook
In a period of such political and economic uncertainty in the UK, many clients are at present struggling to make long-term decisions
on marketing investment. Our experience in the first quarter of our new financial year points to another year when meaningful top
line growth will be elusive. So, even at this relatively early stage in the year and with a significant amount (typically 50%) of
revenues being recurring, it is unlikely that the current year’s profit will match last year’s. We will push hard on all fronts and take
advantage of any hardening in marketing spend as and when it comes; in the meantime we will manage our cost base
appropriately.
Trading in the final quarter of FY19 and the first quarter of the new financial year was particularly challenging and, whilst improving
during the second quarter, the ongoing uncertain economic and political outlook is likely to continue to impact client activity. The
Company remains in constructive dialogue with its debt and certain equity holders with regards to the Company’s financing
requirements with a view to obtaining an enlarged working capital facility.
Rob Shaw
Chief Executive Officer
Jaywing plc
7 Jaywing plc Annual Report and Accounts 2019
CFO Statement
Business review
Like many of its peers, Jaywing has endured challenging trading conditions in the UK for the past two years. Consequently,
management has been forced to turn its focus from growth to restructuring and cost reduction.
In the last 18 months, annualised cost savings of £2.5m have been achieved. A non-core and low margin subsidiary in HSM Limited
has been disposed of, which has helped in achieving a net debt reduction of £2.2m since the interim results in September 2018.
These two actions have led to an increase in EBITDA margin from 9.4% to 11.2%. They have also resulted in the adjusted EBITDA
increasing by 15.2% from £2.9m to £3.3m excluding HSM Limited.
This increase in EBITDA has been delivered on a Gross Profit (GP) number of £29.8m, compared to £30.8m in the previous financial
year, demonstrating the impact of the cost actions.
Overall, the Income Statement shows a loss after tax from continuing operations of £0.9m (2018: loss of £1.0m).
The consolidated cash flow statement shows Jaywing to have generated cash from operating activities of £2.4m (2018: £1.5m) after
changes in working capital. This is shown in the table below.
Loss after tax
Adjustments for:
Depreciation, amortisation and impairment
Loss on sale of HSM Limited
Movement in provision
Foreign exchange
Financial expenses & income
Share-based payment expense
Taxation charge
Changes in working capital
2019
£’000
(2,545)
3,440
1,370
-
20
301
177
(175)
(146)
2018
£’000
(1,133)
2,588
-
(22)
(39)
203
238
(83)
(247)
Operating cash flow after changes in working capital
2,422
1,544
Jaywing continues to be cash generative from operating activities as shown in the table. Net debt has decreased from the prior year
by just under £1.0m and is now less than £5.0m (2018: £5.9m). This is after deferred consideration payments of £0.7m made during
the year.
Banking facilities comprise a term loan for £5.65m and a bank overdraft of £2.0m. There was headroom of £2.7m at the year end.
Based on trading at the start of the financial year, and scheduled repayments of the term loan, this headroom position will reduce
significantly in H1 of FY20.
The business operates in three trading segments: Brand Performance, Online Performance and Data Analytics & Technology, which
are supported by Central Costs. The segmental performance of our business in these practice areas is shown in Note 1 to the
Consolidated Financial Statements, together with the comparative performance from the previous year.
The table below shows the adjusted operating profit of Jaywing analysed between the two half years and adjustments made against
the reported numbers:
Reported loss before tax
Interest
Amortisation
Depreciation
Impairment to the carrying value of goodwill
Share-based payment charge
Acquisition related costs
Loss on disposal of HSM Limited
Exceptional costs
Adjusted operating profit
Deduct other income
Adjusted operating profit before other income
Full year to
31 March 2019
£'000
(2,720)
Six months to
31 March 2019
£'000
(2,152)
Six months to
30 September 2018
£'000
(568)
301
1,795
412
1,050
177
(411)
1,610
1,128
3,342
(13)
3,329
144
909
193
1,050
(20)
(558)
1,610
792
1,968
(13)
1,955
157
886
219
-
197
147
-
336
1,374
-
1,374
8 Jaywing plc Annual Report and Accounts 2019
Excluding other income, Jaywing produced £2.0m adjusted operating profit after interest in the six months to 31 March 2019 and
£1.4m in the first half.
The table below shows the trend of gross profit and EBITDA over the last four six-monthly periods:
Continuing business EBITDA
Revenue
Direct costs
Gross profit
Operating expenses excluding depreciation,
amortisation, exceptional items, acquisition
related costs and (credit)/charges for share-
based payments
Operating profit before depreciation,
amortisation, exceptional items, acquisition
related costs and (credit)/charges for share-
based payments
Key Performance Indicators/Value Drivers
Six months to
31 March 2019
£’000
Six months to
30 Sept 2018
£’000
Six months to
31 March 2018
£’000
16,823
(1,957)
14,866
18,731
(3,752)
14,979
20,827
(5,207)
15,620
Six months to
30 Sept 2017
£’000
20,684
(5,455)
15,229
(12,898)
(13,605)
(14,130)
(13,830)
1,968
1,374
1,490
1,399
Over the last 12 months, focus has been on what the Board view as the six long-term value drivers for Jaywing. These are:
1.Top line GP growth
2. Recurring revenue
3. Recurring licence
revenue
4. Margin
5. Client relationship
depth and breadth
6. Capabilities and
innovation
Impairment
The overall top line growth has stalled due to the challenging UK trading environment, despite
strong growth in the Online Performance segment and Australian division.
Recurring revenues provide resilience, aid cashflow and are a key building block in creating a
sustainable growth model. In the media agencies sector, levels of recurring revenues tend to be
relatively modest. Jaywing’s performance is significantly better with c.50% of revenues visible
beyond 6 months.
Jaywing has invested heavily over recent years in its AI-powered technology products. These
have been sold into existing clients and the challenge now is to sell these more broadly and
implement them more deeply in our own operations.
EBITDA margins in the media agencies sector typically range between 10% and 15%. Jaywing
has previously achieved the top end of this range (when HSM Limited is removed) but more
recently margins have been suppressed in response to a fall in revenues.
Margins are now improving as evidenced by the increase from 9.4% in the prior financial year to
11.2% in the current financial year.
In a growth scenario, the conversion of GP to EBITDA is high due to efficiencies to be gained
from a lower cost base and so will have a disproportionately positive impact on EBITDA growth.
Broader and deeper client relationships lead to lower client attrition, organic growth and
improved cashflow. Jaywing has operated a collaborative operating model for several years and
has an impressive track record with almost 70% of the top 50 clients and over 50% of the top
100 clients now buying more than one service line.
Jaywing comprises some highly sought-after capabilities, including data science and analysis, AI,
conversion rate optimisation and technical SEO. The collaboration with the Data Science
Institute at Imperial College London is also something that sets Jaywing apart from its peers.
As required by IAS 36, we have carried out an impairment review of the carrying value of our intangible assets and goodwill. We
calculated our weighted average cost of capital with reference to long-term market costs of debt and equity and the Company’s own
cost of debt and equity, adjusted for the size of the business and risk premiums. Based on this calculation, a rate of 10.2% (2018:
11.5%) has been derived. This is applied to cash flows for each of the business units using growth based on expected growth rates
in each unit. As a result of these calculations the Board has concluded that an impairment of £1,050k is required (2018: £Nil).
Principal risks and uncertainties
The principal risks and uncertainties of the Company are outlined on page 12. As detailed further in the Directors Report, following
slow trading conditions in the UK in Q4 of FY19 and the first quarter of FY20 and the impact on the results of the Group in those
periods, the Group’s forecasts indicate that further funds are required to enable the Group to continue to meet its obligations as they
fall due until 30 September 2020. The Company remains in constructive dialogue with its debt and certain equity holders with
regards to the Company’s financing requirements with a view to obtaining an enlarged working capital facility.
By order of the Board.
Michael Sprot
Chief Financial Officer
Date: 27 September 2019
9 Jaywing plc Annual Report and Accounts 2019
Board of directors
Martin Boddy, Executive Chairman (54)
Martin was previously Marketing Director of Guardian Royal Exchange Group and a member of the senior marketing team that
launched first direct. He went on to spend a number of years consulting on customer marketing in the UK and internationally before
founding data analytics consultancy Alphanumeric Limited, now part of Jaywing plc, in 1999. Before becoming Chairman, Martin was
CEO at Jaywing plc. He is an active networker, and has a wealth of high level business connections with CMOs, entrepreneurs,
technology businesses, investors and M&A communities.
Rob Shaw, Chief Executive (48)
Rob has over 30 years’ experience in the technology sector, particularly in the fields of digital and search marketing. Initially working
in software development, Rob was responsible for the management of some of the UK’s largest application developments, including
the O2 mobile billing platform and the Student Loans system during his time as IT Director for Ventura, part of Next PLC. Before
becoming Jaywing’s CEO, Rob was the CEO of Epiphany Solutions Limited, which was recognised as one of the fastest growing
digital marketing agencies in the UK, with headcount rising from 26 to over 160 during his time as CEO. Epiphany was acquired by
Jaywing plc in March 2014. Previously he was Managing Director of Latitude White, and Technology Director of the Latitude Group.
Rob is a Non-Executive Director for Run for All, which was established by the late Jane Tomlinson CBE. Rob has previously sat on
Google’s Advisory Board and maintains his technical and market expertise through the ongoing relationhip with Google as a premium
partner agency and as a judge on a number of industry sector awards, including the BMAs and the Prolific North Awards.
Adrian Lingard, Chief Operating Officer (47)
Adrian joined Jaywing from first direct in 2000 and has spent his career understanding how to use data and decision science across
a wide range of business problems and opportunities and in a wide range of market sectors. Adrian headed up Jaywing’s Consulting
business from 2010, until his appointment as COO in 2015. He has considerable commercial management and planning experience
and handles many of Jaywing’s large-scale contract negotiations. Adrian started out at Yorkshire Bank and has broad banking and
lending experience, having since worked with most of the UK’s high street banks advising Senior Executives, Boards and Credit
Committees on the use of data, insight, models and reporting to meet regulatory requirements and improve business performance.
Adrian maintains a strong network with senior clients and colleagues, ensuring he is always up to date with the regulatory and
legislative environment affecting both Jaywing plc and clients.
Michael Sprot, Chief Financial Officer (39)
Michael joined the Company in February 2013 as Group Financial Controller and Company Secretary. Prior to joining Jaywing, he
was Head of Commercial Finance at Vasanta Group, a multi-channel distributor of business supplies and services. Michael also
gained experience of central and local government through his work at learndirect and South Yorkshire PTE after gaining his ACA
qualification from PricewaterhouseCoopers (now PwC) in Sheffield. He was appointed CFO in July 2015. He works constantly in
partnership with Jaywing’s tax advisers, lawyers and health and safety consultants to ensure he is fully informed of all relevant current
regulation and legislation.
Mark Carrington, Non-Executive Director (35)
Member of Audit & Risk, Remuneration and Nomination Committee
Mark is a Fellow of the Association of Chartered Certified Accountants. He is a non-executive Director of a number of privately-
owned businesses both in the UK and Overseas. He is also involved in the provision of management services to a number of other
privately-owned and AIM quoted businesses, ensuring he is always abreast of the most recent regulatory changes and associated
best practice. Mark is a non-executive Director of Political Holdings Limited US and Shutdown Maintenance Services Limited. He is
also the non-executive Chairman of Devonshire Club Limited and Devonshire Club (Holdings) Limited.
Philip Hanson, Non-Executive Director (62)
Chair of Remuneration and Nomination Committees, member of Audit & Risk Committee
Philip has extensive experience in marketing and e-commerce both in the UK and internationally, having held a number of senior
roles in the FMCG and retail financial services sectors – latterly as Global Marketing & e-commerce Director for Travelex. He is also
non-executive Director of the Bettys & Taylors Group. He is a Director of the French and Australian entities of the Goelet family wine
business (SCEA Domaine de Nizas and Red Earth Nominees Pty Ltd respectively) where he regularly travels to understand the
business, its changing markets and resultant challenges and to provide counsel to the executive directors. Philip was a Director of
Travelex Card Services Ltd until December 2015
Ian Robinson, Deputy Chairman (72)
Chair of Audit & Risk Committee, member of Audit & Risk and Nomination Commitees
Ian is a non-executive director of Gusbourne plc. He is also a director of a number of privately-owned businesses and has previously
held a number of other senior financial appointments both in the UK and overseas. Ian keeps up to date with financial and regulatory
changes through his Fellowship of the Institute of Chartered Accountants in England & Wales. He also holds an honours degree in
economics from the University of Nottingham.
10 Jaywing plc Annual Report and Accounts 2019
Advisers
Auditor
Grant Thornton UK LLP
1 Holly Street
Sheffield
S1 2GT
Registrars
Link Asset Services
34 Beckenham Road
Beckenhem
Kent, BR3 4TU
Registered Office
Albert Works
71 Sidney Street
Sheffield
S1 4RG
Nominated adviser and broker
Cenkos Securities plc
6.7.8 Tokenhouse Yard
London
EC2R 7AS
Solicitors
FieldFisher LLP
5th Floor Free Trade Exchange
37 Peter Street, Manchester
M2 5GB
Registered number: 05935923
Country of incorporation: England
11 Jaywing plc Annual Report and Accounts 2019
Principal Risks and Uncertainties
Over the last twelve months, Jaywing has developed its risk reporting framework. This has been done in conjunction with the
Managing Directors of the divisions so that risk management becomes embedded in processes across the business. Below is a
summary of the current key risks. The matrix shows how each risk is rated pre-mitigation.
1. Additional funding is required due to general economic and
business conditions leading to a reduction in marketing spend
2. Inability to recruit or retain key staff leaves us without the
expertise required to service our clients and drive innovation
3. We fail to deliver our strategy or articulate it effectively to key
stakeholders
4. Clients switch some or all of their spend to competitors
5. We fail to develop new products and services which keep our
offer relevant and competitive
6. Failure to maintain relationships with key stakeholders leads to a
lack of capital and support for growth
K
S
I
R
F
O
D
O
O
H
I
L
E
K
I
L
H
G
H
I
I
M
U
D
E
M
W
O
L
1
2/5
3/6
8
4/7
LOW
MEDIUM
HIGH
IMPACT OF RISK
7. Failure to remain compliant with changing regulations leads to financial and/or reputational damage (for Jaywing or its clients)
8. Unexpected events prevent access to our buildings or systems
Executive
ownership
All
COO, Adrian
Lingard
Risk
1. Additional funding is required due to general
economic and business conditions leading to a
reduction in marketing spend
The UK sector in which the Group operates is sensitive
both to general economic and business conditions and
has been affected, along with others, by the
performance of specific sectors such as financial
services and retail.
Continued uncertainty over the UK’s exit from the
European Union risks delays or reductions in the
marketing spend of some clients.
Following slow trading conditions in the UK in Q4 of
FY19 and the first quarter of FY20 and the impact on the
results of the Group in those periods, further funds are
required to enable the Group to continue to meet its
obligations as they fall due.
2. Inability to recruit or retain key staff leaves us
without the expertise required to service our clients
and drive innovation
Jaywing operates in a specialised sector, and it is
dependent on its ability to recruit personnel with
adequate experience and technical expertise. However,
as the supply of such personnel is limited, Jaywing can
encounter significant competition for the recruitment of
suitably experienced and skilled personnel.
3. We fail to deliver our strategy or articulate it
effectively to key stakeholders
Jaywing offers a range of services to clients across
several divisions. It is important that these offerings are
clear, and that the ongoing development strategy for the
business is communicated to all stakeholders including
clients and staff, to ensure maximum engagement
Chairman,
Martin
Boddy
Mitigation
This risk is partly mitigated by actions detailed below
around retention/spend of key clients and innovation
in products & services.
Jaywing works in the digital sector and undertakes
campaigns for clients that show tangible returns on
investment, as well as advising some clients on the
effectiveness of their marketing spend with other
agencies. There is also ongoing development of the
business model to create more licence/recurring
revenue streams. Jaywing’s international operation
in Australia provides revenues from another market.
The Company remains in constructive dialogue with
its debt and certain equity holders with regards to
the Company’s financing requirements with a view to
obtaining an enlarged working capital facility.
Jaywing continues to move toward its ‘One Jaywing’
culture, driven by its desire to remain a place where
people want to work across skillsets.
The key leaders in our business participate in the
Performance Share Plan share options programme
and the Annual Bonus Programme, both of which
reward performance and loyalty to Jaywing.
The expertise of our people is a key source of
competitive advantage and we, therefore, put a lot of
effort into retention.
The sale of HSM Limited has allowed Jaywing to
change the segmental reporting to reflect better the
way the business is managed. This will allow all
stakeholders to have a more structured and
insightful view of the performance of the business.
There is also additional information on the revenue
model, clients and people of Jaywing in the annual
report, and key leaders of the business meet
regularly to ensure communication is strong.
12 Jaywing plc Annual Report and Accounts 2019
4. Clients switch some or all of their spend to
competitors
Jaywing has three main contractual relationships with
clients. Contracts of between six months and five years
(typically 12–18 months) with monthly recurring
revenues; contracts for specific projects; and framework
agreements, typically for a three-year term but with no
commitment from the client to spend.
5. We fail to develop new products and services
which keep our offer relevant and competitive
The digital marketing industry is characterised by
constant change in terms of technology, online media
and data. In this environment, it is vital to be at the
forefront of this change, otherwise it is easy to get left
behind and experience falling demand for outdated
products and services. Jaywing’s future success will
depend on its ability to adopt new technology, exploit
new online media and harness the power of new data
sets.
6. Failure to maintain relationships with key
stakeholders leads to a lack of capital and support
for growth
It is important to maintain relationships and dialogue with
investors, the bank and employees to engage them in
the strategy and vision of Jaywing. This will also provide
Jaywing with the opportunity to access capital and
support for ongoing trading and business
growth/development.
7. Failure to remain compliant with changing
regulations leads to financial and/or reputational
damage (for Jaywing or its clients)
As a listed business, Jaywing must comply with
standards and regulations across a number of areas,
including financial, taxation, AIM, GDPR and
employment. Some of the regulations change regularly,
and so it is important always to be up to date with
current regulation and legislation and ensure that
Jaywing remains compliant. Jaywing must also ensure
compliance of all the initiatives it provides for its clients.
8. Unexpected events prevent access to our
buildings or systems
It is essential that we are able to deliver a continuous
service to our clients and have solutions in place to
cover any unexpected events that prevent access to any
of our buildings.
CEO, Rob
Shaw
CEO, Rob
Shaw
CEO,
Rob Shaw
CFO,
Michael
Sprot
The focus has been to increase the number of
services a client purchases from Jaywing, and the
proportion of recurring revenues from clients. The
intention is to continue to increase these. To mitigate
the risk of clients on framework agreements
reducing or suddenly halting their spend, a well-
structured and experienced account management
function is in place, which works closely with our
clients. Client concentration risk is low.
Jaywing is committed to innovating in data science
led products and services and is actively dedicating
resources to this through Jaywing Intelligence, as
well as in other areas of the business. We have
close relationships with online media owners
(Google, Microsoft, Sky, etc.) and we get early sight
of Google’s new product developments as a
consequence of the significant online media budgets
that we manage on behalf of our clients. We have a
strong team focused on the use of technology whose
brief is to keep themselves abreast of new
developments through their own research and
through their relationships with technology providers.
Jaywing receives market support from Cenkos as
NOMAD and meets with institutional investors and
the bank on a regular basis to keep them updated on
financial and strategic progress. Senior staff are
updated at the annual ‘Big Picture’ event and
employee views are sought through an annual
survey. To meet retail investors, Jaywing attends the
annual Cenkos Innovation & Growth Forum, as well
as presenting at other relevant events during the
year.
Jaywing engages advisers across all these areas to
assist with compliance. Grant Thornton UK LLP
provides auditors and tax advisors, Cenkos is the
NOMAD.
The Board members also keep up to date with
developments in their specialist areas and share
those with other Board members as necessary.
Experts in business areas are able to ensure client
initiatives are all compliant, alongside external input
where appropriate.
COO, Adrian
Lingard
There is a developed and tested business continuity
plan in place across the main Jaywing sites. All data
is backed up off-site, and recovery processes have
also been tested.
13 Jaywing plc Annual Report and Accounts 2019
Directors’ Report
The Directors have pleasure in submitting their report and the audited financial statements for the year ended 31 March 2019.
Principal activity
The principal activity of the Company, and Group, during the year under review is that of data science led performance marketing
agency and consulting services.
Results and dividend
The Group’s profit after taxation from continuing operations for the year ended 31 March 2019 was a loss of £0.9 million (2018: loss
of £1.0 million). The Directors do not propose to pay a dividend.
Future developments
The future developments of the Group are referred to in the Chief Executive’s Report on page 6 and the CFO Statement on page 8.
Going concern
Following slow trading conditions in the UK in Q4 of FY19 and the first quarter of FY20 and the impact on the results of the Group in
those periods, the Group’s forecasts indicate that the Group is likely to require additional funds to continue to meet its obligations as
they fall due until 30 September 2020.
The Company remains in constructive dialogue with its debt and certain equity holders with regards to the Company’s financing
requirements with a view to obtaining an enlarged working capital facility.
Notwithstanding positive indications of support for an enlarged working capital facility there is a risk that the Group will not have
sufficient cash to meet its requirements for the next twelve months and the Directors have concluded that these circumstances
represent a material uncertainty which may cast significant doubt on the Group’s ability to continue as a going concern.
Nonetheless, the Directors expect that the Group will be able to obtain the additional funding required to enable it to continue to adopt
the going concern basis in preparing the financial statements. These financial statements do not include any adjustments that would
arise if the going concern basis of preparation was not considered appropriate.
Political donations
No political donations were made during the year (2018: £Nil).
Directors’ interests
The present membership of the Board, together with biographies on each, is set out on page 10. All those Directors served throughout
the year or from appointment. The Directors’ interests in shares in the Company are set out in the Directors’ remuneration report on
page 16.
Directors’ third-party indemnity provisions
The Group maintains appropriate insurance to cover Directors’ and Officers’ liability. The Group provides an indemnity in respect of
all the Group’s Directors. Neither the insurance nor the indemnity provides cover where the Director has acted fraudulently or
dishonestly.
Employees
The Group is an Equal Opportunities Employer and no job applicant or employee receives more or less favourable treatment on the
grounds of age, gender, marital status, sexual orientation, race, colour, religion or belief.
It is the policy of the Group that individuals with disabilities, whether registered or not, should receive full and fair consideration for all
job vacancies for which they are suitable applicants. Employees who become disabled during their working life will be retained in
employment wherever possible and will be given help with any necessary rehabilitation and retraining.
Employees of the Group and its subsidiaries are regularly consulted by local managers and kept informed of matters affecting them
and the overall development of the Group. We also conduct an annual employee survey.
The Group is committed to maintaining high standards of health and safety for its employees, customers, visitors, contractors and
anyone affected by its business activities. Health and safety is on the agenda for all regularly scheduled Board meetings.
Financial instruments
Details of the financial risk management objectives and policies of the Group, including hedging policies, are given in Note 34 to the
consolidated financial statements.
Share capital
Details of the Company’s share capital, including rights and obligations attaching to each class of share, are set out in Note 22 of the
consolidated financial statements.
14 Jaywing plc Annual Report and Accounts 2019
There are no restrictions on the transfer of ordinary shares in the capital of the Company, other than customary restrictions contained
within the Company’s Articles of Association and certain restrictions which may be required from time-to-time by law, for example,
insider trading law. In accordance with the Model Code which forms part of the Listing Rules of the Financial Services Authority,
certain Directors and employees are required to seek the prior approval of the Company to deal in its shares.
The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities and/or
voting rights. The Company’s Articles of Association contain limited restrictions on the exercise of voting rights.
The Company’s Articles of Association may only be amended by special resolution at a general meeting of shareholders. The
Company is not aware of any significant agreements to which it is party that take effect, alter or terminate upon a change of control of
the Company following a takeover.
Major interests in shares
As at 1 July 2019 the Company had been notified, in accordance with chapter 5 of the Disclosure and Transparency Rules, of the
following voting rights as shareholder of the Company:
Lord Michael Ashcroft
Lombard Odier Investment Managers Group
Hargreave Hale Limited
J & K Riddell
A Gardner
M Boddy
Miton UK Microcap Trust PLC
H & J Spinks
Number of voting rights
23,919,737
22,020,709
5,513,000
5,372,638
5,034,470
5,016,667
3,569,249
3,508,772
2019
%
25.6
23.6
5.9
5.8
5.4
5.4
3.8
3.8
2018
%
25.6
26.8
5.9
5.8
5.4
5.4
3.8
3.8
Corporate social responsibility
The Board recognises the growing awareness of social, environmental and ethical matters and it endeavours to take account of the
interests of the Group’s stakeholders, including its investors, employees, suppliers and business partners when operating the
business.
Annual General Meeting
Your attention is drawn to the Notice of Meeting either enclosed with this Annual Report or online at https://investors.jaywing.com,
which sets out the resolutions to be proposed at the forthcoming Annual General Meeting.
Auditor
The Directors at the date of approval of this Annual Report confirm that:
•
•
so far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
The auditor, Grant Thornton UK LLP, has indicated its willingness to remain in office, and a resolution that it be re-appointed will be
proposed at the Annual General Meeting.
By Order of the Board
Michael Sprot
Director
Dated: 27 September 2019
15 Jaywing plc Annual Report and Accounts 2019
Directors’ Remuneration Report
In preparing this report, we have followed the spirit of the QCA’s Corporate Code of Governance and drawn on best practice available
as well as those aspects of the UK Corporate Governance Code which we consider to be relevant to the Group.
The Remuneration Committee
During the year the Remuneration Committee comprised:
Philip Hanson (Chairman)
Ian Robinson
Mark Carrington
The Code recommends that a remuneration committee should be composed of entirely independent non-executive directors. Ian
Robinson and Mark Carrington (who are both affiliated with a major shareholder) are not regarded as independent under the Code.
The Board does consider them to act independently with respect to remuneration issues.
The Committee met two times during the year.
The Committee seeks input from the Company Secretary. The Committee makes reference to external evidence of pay and
employment conditions in other companies and is free to seek advice from external advisers.
Remuneration policy
The Group’s policy on remuneration for the current year and, so far as is practicable, for subsequent years is set out below. However,
the Remuneration Committee believes that it should retain the flexibility to adjust the remuneration policy in accordance with the
changing needs of the business. Any changes in policy in subsequent years will be detailed in future reports on remuneration. The
Group must ensure that its remuneration arrangements attract and retain people of the right calibre in order to ensure corporate
success and to enhance shareholder value. Its overall approach is to attract, develop, motivate and retain talented people at all levels,
by paying competitive salaries and benefits to all its staff and encouraging its staff to hold shares in the Group. Pay levels are set to
take account of contribution and individual performance, wage levels elsewhere in the Group and with reference to relevant market
information. The Group seeks to reward its employees fairly and give them the opportunity to increase their earnings by linking pay to
achieving business and individual performance targets. The Board believes that share ownership is an effective way of strengthening
employees’ involvement in the development of the business and bringing together their interests and those of shareholders. Executive
Directors are rewarded on the basis of individual responsibility, competence and contribution and salary increases also take into
account pay awards made elsewhere in the Group as well as external market benchmarking.
During the year to 31 March 2019 there were four Executive Directors on the Board in the roles below.
Martin Boddy (Executive Chairman)
Rob Shaw (Chief Executive Officer)
Michael Sprot (Chief Financial Officer)
Adrian Lingard (Chief Operating Officer)
The Executive Directors participate in a pension scheme but do not participate in any healthcare arrangements.
Performance-related elements form a part of the total remuneration packages and are designed to align Directors’ interests with those
of shareholders. In line with best practice and to bring Directors’ and shareholders’ interests further into line, Executive Directors and
the management team are encouraged to maintain a holding of ordinary shares in the Company.
Non-Executive Directors’ fees
Fees for Non-Executive Directors are determined by the Board annually, taking advice as appropriate and reflecting the time
commitment and responsibilities of the role. The Deputy Chairman receives an annual fee of £50,000. Non-Executive Directors’ fees
currently comprise a basic fee of £30,000 per annum.
Non-Executive Directors do not participate in the annual bonus plan, pension scheme or healthcare arrangements. The Company
reimburses the reasonable expenses they incur in carrying out their duties as Directors.
Remuneration components – Executive Directors
A proportion of each Executive Director’s remuneration is performance related. The main components of the remuneration package
for Executive Directors are:
i.
ii.
iii.
Basic salary
Annual bonus plan
Share options
16 Jaywing plc Annual Report and Accounts 2019
Basic salary
Basic salary is set by the Remuneration Committee by taking into account the responsibilities, individual performance and experience
of the Executive Directors, as well as the market practice for executives in a similar position. Basic salary is reviewed (but not
necessarily increased) annually by the Remuneration Committee.
Annual bonus plan
The Executive Directors are eligible to participate in the annual bonus plan. The range of award is based on annual salary.
The performance requirements, for the ability to earn a bonus, are set by the Committee annually and are quantitative related
measures based on stretching profit before tax targets.
Share options
The Committee believes that the award of share options aligns the interests of participants and shareholders. Awards are made to
the Executive Directors with demanding performance criteria.
Directors’ remuneration
The total amounts of the remuneration of the Directors of the Company for the years ended 31 March 2019 and 2018 are shown
below:
31 March
Aggregate emoluments
Sums paid to third parties for Directors’ services
2019
£
841,771
30,000
871,771
2018
£
1,190,912
2,500
1,193,412
The emoluments of the Directors are shown below:
31 March
2019
2019
2019
2019
2018
Fees
and
salary
£
179,104
7,234
107,833
240,000
201.600
Martin Boddy
Andy Gardner^
Michael Sprot
Rob Shaw
Adrian Lingard
Mark Carrington~#
30,000
Stephen Davidson*
-
Ian Robinson
Philip Hanson+
Total
50,000
40,000
855,771
Benefits
in kind
£
-
-
-
-
-
-
-
-
-
-
Bonus
£
Total
£
Total
£
4,000
183,104
196,104
-
7,234
205,000
4,000
4,000
4,000
111,833
119,000
244,000
343,050
205,600
241,373
-
-
-
-
30,000
-
50,000
40,000
2,500
2,782
47,500
36,103
16,000
871,771
1,193,412
2019
Gain on
exercise of
share
options
2018
Gain on
exercise of
share
options
2019
2018
Pension
contributions
Pension
contributions
£
-
-
-
-
-
-
-
-
-
-
£
-
-
-
-
-
-
-
-
-
-
£
20,000
579
39,610
20,000
16,800
-
-
-
-
£
20,000
7,600
39,341
2,500
42,438
-
-
-
-
96,989
111,879
^ resigned 25 April 2018
+ appointed 27 April 2017
~ paid to a third party for the Director’s services
# appointed 27 February 2018
* resigned 27 April 2017
17 Jaywing plc Annual Report and Accounts 2019
Directors’ service agreements and letters of appointment
Contracts of service are negotiated on an individual basis as part of the overall remuneration package. The contracts of service are
not for a fixed period. Details of these service contracts are set out below:
Martin Boddy
Michael Sprot
Adrian Lingard
Rob Shaw
Date of contract
Notice period
Company with whom contracted
1 March 2012
20 December 2012
1 April 2010
17 March 2014
3 months
3 months
6 months
6 months
Jaywing plc
Jaywing plc
Jaywing plc
Jaywing plc
In the event of termination of their contracts, each director is entitled to compensation equal to their basic salary and bonus for their
notice period.
Non-executive Directors have letters of appointment, the details of which are as follows:
Ian Robinson
Philip Hanson
Mark Carrington
Date of contract
Notice period
Company with whom contracted
21 May 2014
27 April 2017
21 March 2018
3 months
3 months
3 months
Jaywing plc
Jaywing plc
Jaywing plc
Directors’ interests in shares
The Directors’ interests in the share capital of the Company are set out below:
31 March
Martin Boddy
Ian Robinson
Rob Shaw
Adrian Lingard
Philip Hanson
Michael Sprot
2019
Number of shares
5,016,667
470,267
174,869
111,000
109,462
68,519
2018
Number of shares
5,016,667
470,267
174,869
111,000
109,462
68,519
The table below sets out options granted under the PSP scheme:
At 31 March
2019
At 31 March
2018
Exercise
price
Normal date
from which
exercisable
Expiry date
Martin Boddy
Michael Sprot
Adrian Lingard
Rob Shaw
254,106
532,386
919,227
1,294,733
496,000
710,000
1,156,303
1,591,054
5p
5p
5p
5p
1-Aug-2016
1-Aug-2016
1-Aug-2016
1-Aug-2016
30-Sep-2020
30-Sep-2020
30-Sep-2020
30-Sep-2020
Pensions
The Group operates a stakeholder pension scheme for staff. All of the Executive Directors received a contribution to a pension
scheme.
18 Jaywing plc Annual Report and Accounts 2019
Non-Executive directorships
The Company allows its Executive Directors to take a limited number of outside directorships. Individuals retain the payments received
from such services since these appointments are not expected to impinge on their principal employment.
Other related party transactions
No Director of the Group, except for Rob Shaw, has, or had, a disclosable interest in any contract of significance subsisting during or
at the end of the year.
Disclosable transactions by the Company under IAS 24, Related Party Disclosures, are set out in Note 32. There have been no other
disclosable transactions by the Company and its subsidiaries with Directors of the Company or any of the subsidiary companies and
with substantial shareholders since the publication of the last Annual Report.
Share price performance
The share price performance from 1 April 2016 to 31 March 2019 is shown in the following table:
Share price
Month
)
p
(
e
c
i
r
P
50
45
40
35
30
25
20
15
10
5
0
By Order of the Board
Philip Hanson
Dated: 27 September 2019
19 Jaywing plc Annual Report and Accounts 2019
Corporate Governance
This report is prepared by the Board and describes how the principles of corporate governance are applied. The Board has adopted
the QCA Corporate Governance Code and considers that Jaywing complies with each of the principles of the code.
The Board
At 31 March 2019, the Board comprised the Executive Chairman Martin Boddy, Non-Executive Deputy Chairman Ian Robinson, Non-
Executive Directors Philip Hanson and Mark Carrington, Chief Executive Officer Rob Shaw, Chief Financial Officer Michael Sprot and
Chief Operating Officer Adrian Lingard. Short biographical details of each of the Directors are set out on page 10. The Board is
responsible to the shareholders for the proper management of the Group and meets at least five times a year to set the overall
direction and strategy of the Group. All strategic operational and investment decisions are subject to Board approval.
The roles of Chief Executive Officer and Chairman are separate and there is a clear division of their responsibilities. All Directors are
subject to re-election at least every three years.
Board committees
Remuneration Committee
The Remuneration Committee comprises Philip Hanson (Chair), Ian Robinson and Mark Carrington. The Remuneration Committee,
on behalf of the Board, meets as and when necessary to review and approve as appropriate the contract terms, remuneration and
other benefits of the Executive Directors and senior management and major remuneration plans for the Group as a whole.
The Code recommends that a remuneration committee should be composed of entirely independent non-executive directors. Ian
Robinson and Mark Carrington (who are affiliated with a major shareholder) are not regarded as independent under the Code. The
Board does consider them to act independently with respect to remuneration issues.
The Remuneration Committee approves the setting of objectives for all of the Executive Directors and authorises their annual bonus
payments for achievement of objectives. The Remuneration Committee approves remuneration packages sufficient to attract, retain
and motivate Executive Directors required to run the Group successfully, but does not pay more than is necessary for this service.
The Remuneration Committee is empowered to recommend the grant of share options under the existing share option plan and to
make awards under the long-term incentive plans. The Remuneration Committee considers there to be an appropriate balance
between fixed and variable remuneration and between short-term and long-term variable components of remuneration. All the
decisions of the Remuneration Committee on remuneration matters in the year ended 31 March 2019 were reported to and endorsed
by the Board.
Further details of the Group’s policies on remuneration and service contracts are given in the Directors’ Remuneration report on pages
16 to 19.
Audit & Risk Committee
The Audit & Risk Committee comprises Ian Robinson (Chair), Mark Carrington and Philip Hanson. By invitation, the meetings of
the Audit & Risk Committee may be attended by the other Directors and the auditor. The Committee meets not less than twice
annually. The Audit & Risk Committee oversees the monitoring of the adequacy and effectiveness of the Group’s internal controls,
accounting policies and financial reporting and provides a forum for reporting by the Group’s external auditor. Its duties include
keeping under review the scope and results of the audit and its cost effectiveness, consideration of management’s response to
any major audit recommendations and the independence and objectivity of the auditor.
Nomination Committee
The Nomination Committee comprises a majority of Non-Executive Directors. It is responsible for nominating to the Board candidates
for appointment as Directors, having regard for the balance and structure of the Board. The terms of reference for all committees are
available on the Group’s website.
Company Secretary
The Company Secretary is responsible for advising the Board through the Chairman on all governance issues. All Directors have
access to the advice and services of the Secretary.
Board performance and evaluation
In addition to the re-election of Directors every three years, the Board has a process for evaluation of its own performance and
that of its committees and individual Directors, including the Chairman.
20 Jaywing plc Annual Report and Accounts 2019
Attendance at Board and Committee meetings
The Directors attended the following Board and Committee meetings during the year ended 31 March 2019.
Total meetings held
Ian Robinson
Philip Hanson
Mark Carrington
Martin Boddy
Andy Gardner* (resigned 25 April 2018)
Michael Sprot
Rob Shaw
Adrian Lingard
Board
6
Remuneration
2
Audit & Risk
3
Nomination
-
6
6
5
6
-
6
6
6
2
2
1
1
-
1
1
-
3
3
2
2
-
3
-
-
-
-
-
-
-
-
-
-
Relationships with shareholders
The Board recognises the importance of effective communication with the Company’s shareholders to ensure that its strategy and
performance is understood and that it remains accountable to shareholders. The Company communicates with investors through
Interim Statements, audited Annual Reports, press releases and the Company’s website: https://investors.jaywing.com.
Shareholders are welcome at the Company’s AGM (notice of which is provided with this Report) where they will have an
opportunity to meet the Board. The Company obtains feedback from its broker on the views of institutional investors on a non-
attributed and attributed basis and any concerns of major shareholders would be communicated to the Board.
Internal controls
The Board acknowledges its responsibility for establishing and maintaining the Group’s system of internal controls and will
continue to ensure that management keeps these processes under regular review and improves them where appropriate.
Management structure
There is a clearly defined organisational structure throughout the Group with established lines of reporting and delegation of
authority based on job responsibilities and experience.
Financial reporting
Monthly management accounts provide relevant, reliable, up-to-date financial and non-financial information to management and
the Board. Annual plans, forecasts and performance targets allow management to monitor the key business and financial activities
and the progress towards achieving the financial objectives. The annual budget is approved by the Board.
Monitoring of controls
It is intended that the Audit Committee receives regular reports from the auditor and assures itself that the internal control
environment of the Group is operating effectively. There are formal policies and procedures in place to ensure the integrity and
accuracy of the accounting records and to safeguard the Group’s assets. Significant capital projects and acquisitions and disposals
require Board approval.
Corporate social responsibility
The Board recognises the growing awareness of social, environmental and ethical matters and it endeavours to take into account
the interests of the Group’s stakeholders, including its investors, employees, suppliers and business partners when operating the
business.
Employment
At a subsidiary level, each individual company has established policies which address key corporate objectives in the management
of employee relations, communication and employee involvement, training and personal development and equal opportunity. The
Board recognises its legal responsibility to ensure the wellbeing, safety and welfare of its employees and to maintain a safe and
healthy working environment for them and for its visitors. Health and Safety is on the agenda for regularly scheduled plc Board
and Operations Board meetings.
Environment
By their nature, the Group’s regular operations are judged to have a low environmental impact and are not expected to give rise
to any significant inherent environmental risks over the next 12 months.
By Order of the Board
Michael Sprot
Dated: 27 September 2019
21 Jaywing plc Annual Report and Accounts 2019
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Directors’ Report, the Strategic Report and the financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected
to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs), as adopted by the
European Union, and have elected to prepare the parent Company Financial Statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law, including FRS101 “Reduced
Disclosure Framework”). Under company law, the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and accounting estimates that are reasonable and prudent;
•
state whether applicable UK Accounting Standards/IFRSs as adopted by the EU have been followed, subject to any material
departures disclosed and explained in the financial statements; and
•
prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and the
Company’s transactions, and disclose with reasonable accuracy at any time the financial position of the Group and the Company and
enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Group and the Company and hence, for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
By Order of the Board
Michael Sprot
Dated: 27 September 2019
22 Jaywing plc Annual Report and Accounts 2019
Independent auditor’s report to the members of Jaywing plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Jaywing plc (the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 31 March 2019 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated Balance Sheet, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in
Equity, the Company Profit and Loss Account, the Company Balance Sheet, the Company Statement of Changes
in Equity, and notes to the financial statements, including a summary of significant accounting policies. The
financial reporting framework that has been applied in the preparation of the Group financial statements is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The
financial reporting framework that has been applied in the preparation of the parent company financial statements
is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 March 2019 and of the group’s loss and parent company’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by
the European Union;
the parent company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’
section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the disclosure on page 14 of the financial statements, which indicates that the directors, having prepared
forecasts, have concluded that the Group will require additional funds to enable the Group to continue to meet its obligations as they
fall due until 30 September 2020. As described, the Company remains in constructive dialogue with its debt and certain equity
holders with regards to the Company’s financing requirements with a view to obtaining an enlarged working capital facility. The
directors expect that the Group will be able to obtain the additional funding required.
These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to
continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable
to continue as a going concern. Our opinion is not modified in respect of this matter.
23 Jaywing plc Annual Report and Accounts 2019
Overview of our audit approach
• Overall materiality: £159,000, which represents 10.5% of the group's earnings before
tax (EBT);
•
The key audit matters were identified as material uncertainty related to going
concern, revenue recognition and the valuation of put/call options; and
• We have assessed the components within the group and performed a full scope audit
on the financial statements of Jaywing plc and on the financial information of all non-
dormant UK components. We have performed a combination of targeted and
analytical procedures on the financial information of the Australian components.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those that had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. In addition to the matter described in the material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter – Group
How the matter was addressed in the audit – Group
Revenue recognition
Revenue is a major driver of the business and under ISA
(UK) 240 ‘The Auditor’s Responsibilities Relating to Fraud
in an Audit of Financial Statements’, there is a presumed
risk of fraud in revenue recognition that could result in
material misstatements.
Our audit work included, but was not restricted to:
•
Assessing whether the revenue recognition
policy is in accordance with International
Financial Reporting Standard (IFRS) 15
‘Revenue from Contracts with Customers’;
As described on page 33 the group adopted IFRS 15
•
Comparing a sample of contract revenue to the
‘Revenue from Contracts with Customers’ in the current
group’s accounting policy to determine whether
year, choosing to apply the “cumulative effect” modified
it has been recognised in line with the policy by;
retrospective method of transition. There is significant
judgement required in applying the standard’s five step
model to the Group’s contracts, including:
•
Identifying the relevant contract(s) requires judgement
in determining at what point an agreement with a
customer creates enforceable rights and obligations
•
Identifying the performance obligations in the contract
requires judgement as to whether the Group is
obligated to provide a single service or multiple
distinct services
• Determining the transaction price requires judgement
in assessing the best estimate of variable
consideration that is due
• Allocating the transaction price to the performance
obligations in the contract requires judgement in
allocating the amount of revenue in respect of each
performance obligation
o Confirming that a valid contract existed with
the customer by reference to evidence such
as written agreements
o Challenging whether the identification of the
performance obligations within the contract
by management is appropriate
o Challenging the appropriateness of the
transaction price ascertained by
management by reference to relevant
contract(s)
o Determining whether the allocation of
transaction price to performance obligations
is appropriate
o Challenging whether management’s
assessment as to whether performance
obligations have been met, including the
percentage of completion assessment made
• Recognising revenue when (or as) the entity satisfies
by management where performed over time,
a performance obligation requires judgement as to
is appropriate in light of relevant evidence,
whether revenue should be recognised at a point in
including time records and customer
time, or over time. Where revenue is recognised over
acceptance records
time, management judgement is required in assessing
the expected contract outcome and stage of
completion at each reporting date.
•
Agreeing a sample of revenue transactions to
customer payments, remittances and evidence
of performance of the service;
24 Jaywing plc Annual Report and Accounts 2019
We therefore identified revenue recognition as a
•
Analytically reviewing sales, including trend and
significant risk, which was one of the most significant
ratio analysis comparing results to prior year;
assessed risks of material misstatement.
and
•
Testing cut-off procedures have been
appropriately applied.
The Group's accounting policy on revenue recognition is
shown on page 33 and related disclosures are included in
note 1 to the financial statements.
Key observations
Based on our audit work, we did not identify any material
misstatement in revenue recognition. Revenue was
recognised in accordance with the Group’s accounting
policy and IFRS 15 ‘Revenue from Contracts with
Customers.’
How the matter was addressed in the audit – Group
and Parent
Key Audit Matter – Group and Parent
Valuation of put/call option
Put/call options were issued as part of the Frank Digital
Our audit work included, but was not restricted to:
acquisition on 18 March 2018.
Due to the complexities of valuing the options and the
proximity to the 2018 year end, provisional values were
reported in the 2018 financial statements, with finalised
figures required for the financial statements for the year
ended 31 March 2019.
• Assessing whether the business combinations
policy is in accordance with IFRS 3 ‘Business
Combinations’.
• Assessing whether the financial instruments policy
is in accordance with IFRS 9 ‘Financial Instruments’
• Documentation and assessment of the design and
implementation of controls around the valuation
We therefore identified the value of the put/call options
as a significant risk, which was one of the most
significant assessed risks of material misstatement.
and recording of the put/call options
• Assessment of the appropriateness of the
assumptions used in the valuation
• Use of our internal valuation experts to assess the
reasonableness of the assumptions used in the
calculation and the methodology applied by
reference to market practice
The Group's accounting policy on put/call options is
shown on page 37 and related disclosures are included
in note 19 to the financial statements.
The Group's accounting policy on financial instruments
is shown on page 37 and related disclosures are
included in note 34 to the financial statements.
Key observations
Based on our audit work, we did not identify any
material misstatements in business acquisitions.
Business acquisitions are accounted for in accordance
with the Group’s accounting policies and IFRS 3
‘Business Combinations’. Based on our work, we did
not identify any material misstatements in financial
instruments. Financial instruments have been
accounted for in accordance with the Group’s
accounting policies and IFRS 9 ‘Financial Instruments’.
25 Jaywing plc Annual Report and Accounts 2019
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature,
timing and extent of our audit work and in evaluating the results of that work.
Materiality was determined as follows:
Materiality measure
Group
Parent
Financial statements as a
£159,000 which represents 10.5% of
whole
earnings before tax. This benchmark is
considered the most appropriate because
EBT is a key performance indicator for
the group
The materiality for the group financial
statements for the year ended 31 March
2018 as a whole was set at £156,000
which was 10% of the group’s average
£143,000, which represents 1% of the
company’s total assets, capped at 90% of
group materiality. This benchmark is
considered the most appropriate given
the activities of the parent company,
primarily being that of a holding company
and its major activities relate to fixed
assets included in the financial
statements.
earnings before tax based on the
Materiality for the current year is higher
previous 3 years. In 2019, we have
than the level that we determined for the
reconsidered the appropriateness of this
year ended 31 March 2018 as a result of
basis and determined that earnings
the amendment to basis for the group
before tax for the year provides a more
materiality calculation.
appropriate basis to calculate materiality.
Materiality for the current year is higher
than the level that we determined for the
year ended 31 March 2018 for the
reasons outlined above.
Performance materiality
75% of financial statement materiality.
75% of financial statement materiality.
used to drive the extent
of our testing
Specific materiality
We also determine a lower level of
specific materiality for directors’
remuneration and related party
transactions.
We also determine a lower level of
specific materiality for directors’
remuneration and related party
transactions.
Communication of
£119,000 and misstatements below that
£107,250 and misstatements below that
misstatements to the
threshold that, in our view, warrant
threshold that, in our view, warrant
audit committee
reporting on qualitative grounds.
reporting on qualitative grounds.
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the Group's business, its environment and
risk profile and in particular included the following:
• evaluation by the Group audit team of identified components to assess the significance of that component and to determine the
planned audit response based on a measure of materiality. We assessed significance as a percentage of the Group's total
assets, revenues and earnings before tax;
• a full scope statutory audit of the financial statements of the parent Company and of the financial information of all other non-
dormant UK based Group entities;
• a combination of full scope and targeted procedures on the Australian components;
•
there has been no change in the overview of the scope of the current year audit from the scope of that of the prior year;
• 86% of Group revenue was subjected to full scope procedures, and 14% of Group revenue was subjected to targeted
procedures; and
26 Jaywing plc Annual Report and Accounts 2019
• audit work on all components in the UK was performed by the Group audit team. The audit work on all components in Australia
was carried out by Grant Thornton Australia under the direction and supervision of the Group audit team.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report and accounts, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
•
•
•
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 22, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
27 Jaywing plc Annual Report and Accounts 2019
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state
to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Donna Steel
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
SHEFFIELD
27 September 2019
28 Jaywing plc Annual Report and Accounts 2019
Consolidated statement of comprehensive income
For the year ended 31 March
Continuing operations
Note
£'000
£’000
2019
2018
Restated
Revenue
Direct costs
Gross profit
Other operating income
Operating expenses
Operating profit/(loss) from continuing
operations
Finance income
Finance costs
Net financing costs
Loss before tax from continuing operations
Tax expense
1
2
3
4
5
6
Profit/(loss) after tax from continuing
operations
Loss for the year from discontinued operations
12
Loss for the year
Loss for the year is attributable to:
Non-controlling interests
Owners of the parent
Other comprehensive income
Items that will be reclassified subsequently
to profit or loss
Exchange differences on retranslation of foreign
operations
28
Total comprehensive income for the period
Total comprehensive income is attributable
to:
Non-controlling interests
Owners of the parent
Profit/(loss) per share
Basic profit/(loss) per share from continuing
operations
Basic loss per share from discontinued operations
7
Total
Diluted profit/(loss) per share from continuing
operations
Diluted loss per share from discontinued
operations
Total
35,554
(5,709)
29,845
41,511
(10,662)
30,849
13
64
(30,667)
(31,785)
(809)
4
(305)
(301)
(1,110)
175
(935)
(1,610)
(2,545)
140
(2,685)
(2,545)
(872)
-
(203)
(203)
(1,075)
83
(992)
(141)
(1,133)
(6)
(1,127)
(1,133)
20
(2,525)
(39)
(1,172)
140
(2,665)
(2,525)
(1.15p)
(1.72p)
(2.87p)
(1.15p)
(1.72p)
(2.87p)
(6)
(1,166)
(1,172)
(1.06p)
(0.15p)
(1.21p)
(1.06p)
(0.15p)
(1.21p)
The accompanying notes form part of these Consolidated Financial Statements.
The 2018 numbers have been restated to show the non-controlling interest.
29 Jaywing plc Annual Report and Accounts 2019
Consolidated balance sheet
As at 31 March
Note
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Other interest-bearing loans and borrowings
Trade and other payables
Current tax liabilities
Provisions
Non-current liabilities
Other interest-bearing loans and borrowings
Deferred tax liabilities
Total liabilities
Net assets
Equity
Equity attributable to owners of the parent
Share capital
Share premium
Capital redemption reserve
Shares purchased for treasury
Share option reserve
Foreign currency translation reserve
Retained earnings
Equity attributable to owners of the parent
Non-controlling interest
Total equity
14
15
16
17
18
19
20
18
21
22
23
25
24
26
28
29
27
2019
£'000
1,015
33,054
4,364
38,433
8,256
690
8,946
2018
£'000
1,443
34,496
5,962
41,901
11,754
632
12,386
47,379
54,287
1,800
9,546
205
42
11,593
3,850
656
4,506
4,750
12,545
249
151
17,695
1,800
951
2,751
16,099
20,446
31,280
33,841
34,992
10,088
125
(25)
838
-
(15,889)
30,129
34,992
10,088
125
(25)
736
(20)
(13,773)
32,123
1,151
1,718
31,280
33,841
These financial statements were approved by the Board of Directors on 27 September 2019 and were signed on its behalf by:
Michael Sprot
Director
Company number: 05935923
The accompanying notes form part of these Consolidated Financial Statements.
30 Jaywing plc Annual Report and Accounts 2019
Consolidated cash flow statement
For the year ended 31 March
Cash flow from operating activities
Loss after tax
Adjustments for:
Depreciation, amortisation and impairment
Loss on sale of HSM Limited
Movement in provision
Financial income
Financial expenses
Share-based payment expense
Taxation charge
Operating cash flow before changes in working capital
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Cash generated from operations
Interest received
Interest paid
Tax paid
Net cash flow from operating activities
Cash flow from investing activities
Payment of deferred consideration
Proceeds from sale of HSM Limited
Acquisition of subsidiaries net of cash acquired
Acquisition of intangible assets
Acquisition of property, plant and equipment
Net cash outflow from investing activities
Cash flow from financing activities
Increase in borrowings
Repayment of borrowings
Acquisition of non-controlling interest
Proceeds from issue of share capital
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Cash and cash equivalents comprise:
Cash at bank and in hand
Bank overdrafts
Cash and cash equivalents at end of year
Note
2019
£'000
2018
£'000
(2,545)
(1,133)
3
12
14
3,440
1,370
-
(4)
305
177
(175)
2,568
1,599
(1,745)
2,422
4
(305)
(287)
1,834
(592)
403
-
(297)
(252)
(738)
-
(900)
(138)
-
(1,038)
58
632
690
690
-
690
2,588
-
(22)
-
203
238
(83)
1,791
(360)
113
1,544
-
(203)
(553)
788
(2,528)
-
(647)
(448)
(865)
(4,488)
2,000
(1,200)
-
1,316
2,116
(1,584)
2,216
632
632
-
632
The accompanying notes form part of these Consolidated Financial Statements.
31 Jaywing plc Annual Report and Accounts 2019
Consolidated statement of changes in equity
Balance at 31 March 2017
Issue of share capital
Acquisition of subsidiaries
Charge in respect of share-based
payments
Share
capital
£’000
34,657
335
-
-
9,108
980
-
-
Transactions with owners
335
980
Loss for the period
Retranslation of foreign currency
Total comprehensive income for the
period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
232
232
-
-
-
Balance at 31 March 2018
34,992
10,088
125
(25)
736
Acquisition of non-controlling interests
Charge in respect of share-based
payments
Transactions with owners
Profit/(loss) for the period
Retranslation of foreign currency
Total comprehensive income for the
period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
102
102
-
-
-
Balance at 31 March 2019
34,992
10,088
125
(25)
838
The accompanying notes form part of these Consolidated Financial Statements.
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Treasury
Shares
£’000
Share
option
reserve
£’000
Foreign
currency
translation
reserve
£’000
Retained
earnings
£’000
Equity
attributable
to parent
£’000
Non-
controlling
interest
£’000
Total
equity
£’000
125
(25)
504
19
(12,646)
31,742
1,315
-
232
1,547
(1,127)
(39)
(1,166)
32,123
569
102
671
1,513
33,255
-
1,315
211
-
211
232
211
1,758
(6)
(1,133)
-
(39)
(6)
(1,172)
1,718
33,841
(707)
(138)
-
(707)
102
(36)
(2,685)
(2,685)
140
(2,545)
-
20
-
20
(2,685)
(15,889)
(2,665)
30,129
140
(2,525)
1,151
31,280
-
-
-
-
(1,127)
-
(1,127)
(13,773)
569
-
569
-
-
-
-
-
(39)
(39)
(20)
-
-
-
-
20
20
-
32 Jaywing plc Annual Report and Accounts 2019
Principal accounting policies
Jaywing plc is a Company incorporated in the UK and is AIM listed.
The Consolidated Financial Statements consolidate those of Jaywing plc and its subsidiaries (together referred to as the ‘Group’).
The Consolidated Financial Statements have been prepared and approved by the Directors in accordance with International
Financial Reporting Standards as adopted by the EU (Adopted IFRSs). The Consolidated Financial Statements have been
prepared under the historical cost convention.
The principal accounting policies of the Group are set out below. The policies have remained unchanged from the previous year,
except as set out below.
Changes in accounting policies
New and revised standards that are effective for annual periods beginning on or after 1 April 2018
The Group has adopted both IFRS 9 and IFRS 15 during the year. Details of these are below and in the notes to the accounts.
Going concern
Following slow trading conditions in the UK in Q4 of FY19 and the first quarter of FY20 and the impact on the results of the Group in
those periods, the Group’s forecasts indicate that the Group is likely to require additional funds to continue to meet its obligations as
they fall due until 30 September 2020.
The Company remains in constructive dialogue with its debt and certain equity holders with regards to the Company’s financing
requirements with a view to obtaining an enlarged working capital facility.
Notwithstanding positive indications of support for an enlarged working capital facility there is a risk that the Group will not have
sufficient cash to meet its requirements for the next twelve months and the Directors have concluded that these circumstances
represent a material uncertainty which may cast significant doubt on the Group’s ability to continue as a going concern.
Nonetheless, the Directors expect that the Group will be able to obtain the additional funding required to enable it to continue to
adopt the going concern basis in preparing the financial statements. These financial statements do not include any adjustments that
would arise if the going concern basis of preparation was not considered appropriate.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the rights to variable returns from its
involvement with the investee and has the ability to affect these returns through its power over the investee. In assessing control,
potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries
are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases.
Transactions between subsidiary companies are eliminated on consolidation.
Revenue
IFRS 15 ‘Revenue from Contracts with Customers’ replaces IAS 18 ‘Revenue’, IAS 11 ‘Construction Contracts’ and several
revenue-related interpretations. The new standard has been applied retrospectively without restatement. The adoption of IFRS
15 has had no impact on previously reported results or retained earnings.
Revenue is generated mainly under the following four contractual models:
1. Monthly retainers
2. Project based
3. Consulting day rates
4. Licences (with and without support)
The different revenue streams for the Group have been assessed and a view taken on whether the application of IFRS 15 would
lead to a change in the way revenue is recognised for the work performed.
The Group have used the following five steps to do this:
1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognise revenue when the performance obligations are satisfied
33 Jaywing plc Annual Report and Accounts 2019
The Group often enters into transactions involving a range of the Group’s products and services, for example providing a client
with data consultancy and brand development work. In all cases, the total transaction price for a contract is allocated amongst
the various performance obligations based on their relative stand-alone selling prices.
Revenue is recognised over time, as the Group satisfies performance obligations by transferring the promised goods or services
to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports
these amounts as other liabilities in the statement of financial position (see Note 19). Similarly, if the Group satisfies a
performance obligation before it receives the consideration, the Group recognises a receivable in its statement of financial
position (see Note 17).
Monthly retainers
A client will sign up to a contract for a period of between six and 18 months, with a fixed fee each month for an agreed amount
of work to be performed. Under each contract, there may be more than one service provided to the customer, each with different
performance obligations, such as PPC and SEO management, which will have agreed KPIs. These services will be set out in
the contract with revenue amounts associated and the revenue streams will be recognised separately.
The transaction price is set out in the contract for each service provided and revenue is allocated to the various performance
obligations on this basis. The customer may choose to take additional services for a period of time, which would be subject to a
separate agreement. Any performance fees payable under a contract would relate to a specific month and be calculated in line
with the provisions set out in the contract.
Revenue is recognised over time as the customer simultaneously receives and consumes the benefits of the services as the
service is performed. It is recognised using the output method, on a straight line basis over the life of the contract as the amount
of work required to perform under these contracts does not vary significantly from month to month, therefore the straight line
method provides a faithful depiction of the transfer of goods or services.
Project based
A client will enter into a framework agreement which covers all work performed by Jaywing, and will then issue a brief or PO for
a specific piece of work to be performed. This could be the development of a website for a client, or the production of a creative
campaign. The work would normally take a period of between one and six months to complete.
Normally a specific brief or work order is provided for a project under the overall framework agreement. This will detail the
services to be provided to the customer, with a price set out against each element as appropriate. The transaction price is set
out in the work order for each element of the project. The customer may choose to vary the scope at any stage, and that would
be subject to an updated work order. That work order would still be part of the original contract as those services would not be
distinct from those in the original contract.
Revenue is recognised over time using the input method as Jaywing’s performance creates or enhances an asset that the
customer controls as the asset is created or enhanced and the revenue recognised reflects the efforts or inputs Jaywing has
made to the satisfaction of the performance obligation.
Consulting day rates
A client will enter into a contract for a piece of work that is quoted as a number of days charged at a rate per day. This work will
be either risk, marketing or data based and could involve building models, databases and analysis of data. Invoices will usually
be raised monthly for the number of days of work performed.
A specific piece of work is contracted for which will normally be a number of days work charged at a rate per day, with different
rates for different levels of seniority. The transaction price is set out in the contract. The customer may choose to vary the scope
at any stage, and that would be subject to an updated work schedule. That work order would still be part of the original contract
as those services would not be distinct from those in the original contract.
Revenue is recognised over time as the customer simultaneously receives and consumes the benefit of the services as the
services are performed. It is recognised using the input method, based on the number of days work performed during the
month.
Licences
A client enters into a contract for a product licence, including support from Jaywing to run that product and interpret the results
from it. The product and support are not separately identifiable because the client is not able to operate the product licence
without this support as they do not have the skills or a login to the system.
34 Jaywing plc Annual Report and Accounts 2019
Revenue is recognised over time based on the provision of the licence and support during the month as the customer
simultaneously receives and consumes the benefit of the services as the services are provided.
Each of these revenue streams have been assessed and the Group has concluded that for the contracts currently in place with
customers, there is no change in the method of revenue recognition from that done historically. Further detail can be found in note
1.
There are no differences in payment terms for each of these categories, the only differences in payments terms are from
individual terms agreed with clients which are between 30 and 60 days.
Foreign currency
Transactions in foreign currencies are translated into the entity’s functional currency at the foreign exchange rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated
at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or
loss.
Dilapidations provision
Provision is made for expected future dilapidations costs to property under operating leases. The estimated costs are capitalised
within leasehold improvements and depreciated over the remaining lease term.
Judgements made by the Directors in the application of these accounting policies that have a significant effect on the Consolidated
Financial Statements, together with estimates with a significant risk of material adjustment in the next year, are discussed in note
33 to the Consolidated Financial Statements.
Classification of instruments issued by the Group
Instruments issued by the Group are treated as equity (i.e. forming part of shareholders’ funds) only to the extent that they meet
the following two conditions:
§ they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial
assets, or to exchange financial assets or financial liabilities with another party, under conditions that are potentially unfavourable
to the Company (or Group); and
§ where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company’s own equity instruments, or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the items are classified as a financial liability. Where the instrument so classified takes
the legal form of the Company’s own shares, the amounts presented in these financial statements for called up share capital and
share premium account exclude amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part of finance expenses. Finance payments associated
with financial instruments that are classified in equity are dividends and are recorded directly in equity.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property,
plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
Leasehold improvements
Office equipment
-
-
over period of lease
3 - 5 years
It has been assumed that all assets will be used until the end of their economic life.
Intangible assets and goodwill
All business combinations are accounted for by applying the acquisition method. Goodwill represents the difference between the
cost of the acquisition and the fair value of the net identifiable assets acquired. Identifiable intangibles are those which can be
sold separately, or which arise from legal or contractual rights, regardless of whether those rights are separable, and are initially
recognised at fair value. Development costs incurred in the year, which meet the criteria of IAS 38, are capitalised and amortised
on a straight-line basis over their economic life.
35 Jaywing plc Annual Report and Accounts 2019
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not
amortised but is tested annually for impairment.
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and accumulated
impairment losses.
Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of intangible assets, unless such
lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each
balance sheet date. Other intangible assets are amortised from the date they are available for use.
The estimated useful lives are as follows:
Customer relationships
Development costs
Trademarks
Order books
-
-
-
-
4 to 12 years
3 to 6 years
2 to 20 years
1 year
Impairment
For goodwill that has an indefinite useful life, the recoverable amount is estimated annually. For other assets, the recoverable
amount is only estimated when there is an indication that an impairment may have occurred. The recoverable amount is the higher
of fair value less costs to sell and value in use. Value in use is determined by assessing net present value of the asset based on
future cash flows.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating units, are allocated first to reduce the carrying amount of any goodwill
allocated to the cash-generating unit and then to reduce the carrying amount of the other assets in the unit on a pro rata basis. A
cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the
cash inflows from other assets or groups of assets. With the exception of goodwill, all assets are subsequently reassessed for
indications that an impairment loss previously recognised no longer exists.
Put/call options
The put/call options in Massive Group PTY and Frank Digital PTY have been valued by an independent assessor and are
recognised with both a service and non-service element in the accounts. The non-service element is fully recognised as at the
date of acquisition and the fair value reviewed annually. The service element is treated as a cash settled share-based payment
with the share-based payment valued at the point of inception and the cost being spread over the life of the asset.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial instruments and non-financial assets. This involves
developing estimates and assumptions consistent with how market participants would price the instrument. Management bases
its assumptions on observable data as far as possible but this is not always available. In that case, management uses the best
information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction
at the reporting date (see note 35).
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in profit or loss as incurred.
Share-based payment transactions
The weighted average fair value for the EBITDA performance options was calculated using the Black-Scholes Merton Option
Pricing Model, and the fair value for the share price options was calculated using the Monte Carlo Model. This is charged to profit
or loss over the vesting period of the award. The charge to profit or loss takes account of the estimated number of shares that will
vest. Where the options do not have any market conditions attached, the number expected to vest is reassessed at each reporting
period. All share-based remuneration is equity settled. Provision is made for National Insurance when the Group is committed to
settle this liability. The charge to profit or loss takes account of the options expected to vest, is deemed to arise over the vesting
period, and is discounted.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the liability.
36 Jaywing plc Annual Report and Accounts 2019
Expenses
Operating lease payments
Operating leases are leases in which substantially all the risks and rewards of ownership related to the asset are not transferred
to the Group.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised in profit or loss as an integral part of the total lease expense.
Net financing costs
Net financing costs comprise interest payable and interest receivable on funds invested. Interest income and interest payable are
recognised in profit or loss as they accrue using the effective interest method.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income, or directly in equity, in which case it is recognised in other
comprehensive income or in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes, except to the extent that it arises on:
§
§
§
the initial recognition of goodwill;
the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business
combination;
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable
future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilised.
Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank borrowings that are repayable on demand and form
an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only
of the statement of cash flows.
Trade and other receivables
IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ‘expected credit
loss (ECL) model’. This replaces IAS 39’s ‘incurred loss model’.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group considers a
broader range of information when assessing credit risk and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life
of the financial instrument.
Adoption of IFRS 9 has not resulted in any amendment to previously reported results or retained earnings.
Financial liabilities
Interest-bearing borrowings
37 Jaywing plc Annual Report and Accounts 2019
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being
recognised in profit or loss over the period of the borrowings on an effective interest basis.
Trade and other payables
Trade payables are initially recorded at fair value and thereafter at amortised cost using the effective interest rate method.
Segmental reporting
The Group reports its business activities in three areas: Brand Performance, Online Performance and Data, Analysis &
Technology. Central Costs represents the Group's head office function, along with intragroup transactions.
The Group derives its revenue from the provision of digital marketing services.
Standards and interpretations in issue at 31 March 2019 but not yet effective
The following standards and interpretations of relevance to the Group have been issued but are not yet effective and have not been
adopted by the Group:
•
IFRS 16 Leases (effective 1 January 2019)
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing
standards have been published by the IASB but are not yet effective and have not been adopted early by the Group.
Management anticipates that all of the relevant pronouncements will be adopted in the Group’s accounting policies for the first
period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that
are expected to be relevant to the Group’s financial statements is provided below. Certain other new standards and interpretations
have been issued but are not expected to have a material impact on the Group’s financial statements.
Other standards and interpretations in issue but not yet effective are not considered to have any relevance to the Group, other than
IFRS 16 Leases.
The Directors have assessed the impact of the implementation of IFRS 15 and do not believe it will have a material impact on the
way revenues are recognised across the Group.
IFRS 16 will replace IAS 17 ‘Leases’ and three related Interpretations. It completes the IASB’s long-running project to overhaul
lease accounting. Leases will be recorded in the statement of financial position in the form of a right-of-use asset and a lease
liability. There are two important reliefs provided by IFRS 16 for assets of low value and short-term leases of less than 12 months.
IFRS 16 is effective from periods beginning on or after 1 January 2019. Early adoption is permitted; however, the Group has
decided not to adopt early.
Management is in the process of assessing the full impact of the Standard. So far, the Group:
• has decided to make use of the practical expedient, not to perform a full review of existing leases and apply IFRS 16 only to new
or modified contracts.
• believes that the most significant impact will be that the Group will need to recognise a right of use asset and a lease liability for
the office and production buildings currently treated as operating leases. At 31 March 2019 the future minimum lease payments
amounted to £2,995,000. This will mean that the nature of the expense of the above cost will change from being an operating lease
expense to depreciation and interest expense
• concludes that there will not be a significant impact to the finance leases currently held on the statement of financial position
The Group is planning to adopt IFRS 16 on 1 April 2019 using the Standard’s modified retrospective approach. Under this approach
the cumulative effect of initially applying IFRS 16 is recognised as an adjustment to equity at the date of initial application.
Comparative information is not restated.
Choosing this transition approach results in further policy decisions the Group needs to make as there are several other transitional
reliefs that can be applied. These relate to those leases previously held as operating leases and can be applied on a lease-by-lease
basis. The Group is currently assessing the impact of applying these other transitional reliefs.
Share Capital
Share Capital represents the nominal value of shares that have been issued.
Share Premium
Share Premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of
shares are deducted from Share Premium, net of any related income tax benefits.
Capital Redemption Reserve
Capital Redemption Reserve represents the amount by which the nominal value of the shares purchased or redeemed is greater
than proceeds of a fresh issue of shares.
Shares Purchased for Treasury
38 Jaywing plc Annual Report and Accounts 2019
Represents the nominal value of the shares purchased by the Company.
Share Option Reserve
Represents the fair value charge of share options in issue.
Foreign Currency Translation Reserve
Represents the exchange differences on retranslation of foreign operations.
Retained Earnings
Retained Earnings includes all current and prior period retained profits and share-based employee remuneration.
Minority interests
The profit or loss attributable to the minority ownership stakes in subsidiary companies is transferred from Retained Earnings to
Minority Interest each year.
39 Jaywing plc Annual Report and Accounts 2019
Notes to the Consolidated Financial Statements
1. Segmental analysis
Following the sale of HSM Limited, the Group has changed the segments that it reports in to reflect more accurately the way that
the business is managed. Jaywing now reports its business activities in three areas: Brand Performance, Online Performance and
Data, Analysis & Technology. Central Costs represents the Group's head office function, along with intragroup transactions. The
2018 results have been restated into the new segments.
Central Costs have been restated for the year ended 31 March 2018 to be consistent with the period to 31 March 2019 where
costs have been reallocated to the segments where possible.
The Group primarily derives its revenue from the provision of digital marketing services in the UK. Approximately £4,872,000
(2018: £2,850,000) of sales were made to clients in Australia. During the year, one customer included within the Data, Analysis &
Technology sector accounted for greater than 10% of the Group's revenue (2018: One customer).
For the year ended 31 March 2019 – continuing operations
Revenue
Direct costs
Gross profit
Operating expenses excluding
depreciation, amortisation, loss
before tax on disposal,
exceptional items, acquisition
related costs and charges for
share-based payments
Operating profit before
depreciation, amortisation,
loss before tax on disposal,
exceptional items, acquisition
related costs and charges for
share-based payments
Other operating income
Depreciation
Amortisation
Impairment to the carrying value
of goodwill
Exceptional costs
Acquisition related costs
Charges for share-based
payments
Operating (loss)/profit
Finance income
Finance costs
Loss before tax
Tax expense
Loss for the period
Brand
Performance
£’000
Online
Performance
£’000
Data, Analysis &
Technology
£’000
11,685
(2,504)
9,181
13,289
(609)
12,680
12,446
(4,502)
7,944
Central Costs
£’000
(1,866)
1,906
40
Total
£’000
35,554
(5,709)
29,845
(8,224)
(9,931)
(6,225)
(2,136)
(26,516)
957
2,749
1,719
(2,096)
3,329
13
(89)
(897)
(1,050)
(27)
(66)
(14)
-
(203)
(811)
-
(108)
(100)
(19)
-
(36)
(87)
-
(214)
-
(27)
-
(84)
-
-
(779)
577
(117)
(1,173)
1,508
1,355
(2,499)
13
(412)
(1,795)
(1,050)
(1,128)
411
(177)
(809)
4
(305)
(1,110)
175
(935)
Exceptional costs relate predominantly to compensation for loss of office which is detailed in note 8.
40 Jaywing plc Annual Report and Accounts 2019
For the year ended 31 March 2018 – continuing operations
Brand
Performance
£’000
Online
Performance
£’000
Data, Analysis &
Technology
£’000
12,056
(2,554)
9,502
12,374
(859)
11,515
19,130
(9,298)
9,832
Central Costs
£’000
(2,049)
2,049
Total
£’000
41,511
(10,662)
-
30,849
(7,853)
(10,226)
(6,852)
(3,029)
(27,960)
1,649
1,289
2,980
(3,029)
2,889
64
(102)
(1,165)
16
-
(52)
410
-
(183)
(710)
(282)
-
-
114
-
(48)
(30)
-
-
(4)
-
(102)
-
(198)
(827)
(138)
2,898
(4,294)
64
(435)
(1,905)
(464)
(827)
(194)
(872)
(203)
(1,075)
83
(992)
Revenue
Direct costs
Gross profit
Operating expenses excluding
depreciation, amortisation, loss before
tax on disposal, exceptional items,
acquisition related costs and charges
for share-based payments
Operating profit before
depreciation, amortisation, loss
before tax on disposal, exceptional
items, acquisition related costs and
charges for share-based payments
Other operating income
Depreciation
Amortisation
Exceptional costs
Acquisition related costs
Charges for share-based payments
Operating (loss)/profit
Finance costs
Loss before tax
Tax expense
Loss for the period
Year ended 31 March 2019
Brand
Performance
Online
Performance
£’000
£’000
Data,
Analysis &
Technology
£’000
Central
Costs
Total
£’000
£’000
Assets
Liabilities
21,741
(2,474)
18,235
(4,493)
11,645
(1,470)
1,614
(13,518)
53,235
(21,955)
Capital employed
19,267
13,742
10,175
(11,904)
31,280
Year ended 31 March 2018
Brand
Performance
Online
Performance
£’000
£’000
Data,
Analysis &
Technology
£’000
Central
Costs
Total
£’000
£’000
Assets
Liabilities
27,387
(3,849)
17,251
(2,834)
14,191
(3,837)
764
(15,232)
59,593
(25,752)
Capital employed
23,538
14,417
10,354
(14,468)
33,841
Unallocated assets and liabilities consist predominantly of cash, external borrowings and deferred tax liabilities on intangible
assets which have not been allocated to the business segments. The Group’s assets are based in the UK and Australia.
The Group’s non-current assets (other than financial instruments, investments accounted for using the equity method, deferred
tax assets and post-employment benefit assets) are located into the following geographic regions:
United Kingdom
Australia
2019
£'000
38,563
138
38,701
2018
£'000
41,743
158
41,901
41 Jaywing plc Annual Report and Accounts 2019
Non-current assets are allocated based on their physical location. The above table does not include discontinued operations
(disposal groups), for which revenue and assets can be attributed to United Kingdom.
Capital additions; Property, plant and equipment
Brand
Performance
£’000
Online
Performance
£’000
Data, Analysis
& Technology
£’000
Central
Costs
£’000
Year ended 31 March 2019
Year ended 31 March 2018
70
262
160
368
-
22
22
213
Total
£’000
252
865
The Group’s revenue disaggregated by primary geographical markets is as follows:
Year ended 31 March 2019
United Kingdom
Australia
Total
Year ended 31 March 2018
United Kingdom
Australia
Total
Brand
Performance
Online
Performance
£’000
9,643
2,042
£’000
10,459
2,830
Data,
Analysis &
Technology
£’000
Central
Costs
Total
£’000
£’000
12,446
-
(1,866)
-
30,682
4,872
11,685
13,289
12,446
(1,866)
35,554
Brand
Performance
Online
Performance
£’000
£’000
Data,
Analysis &
Technology
£’000
Central
Costs
Total
£’000
£’000
11,049
1,007
10,531
1,843
19,130
-
(2,049)
-
38,661
2,850
12,056
12,374
19,130
(2,049)
41,511
The Group’s revenue disaggregated by pattern of revenue recognition is all for goods transferred over time for both 2019 and 2018.
The determination of the number of distinct performance obligations in a contract requires judgement, based on whether the
customer can benefit from the use of the service on its own or together with other resources that are readily available to it, and also
whether the promise to transfer the service is separately identifiable from other promises in the contract. As explained in the
accounting policy for revenue, our contracts usually include just one distinct performance obligation.
For 2019, revenue includes £1,133k (2018: £675k) included in the contract liability balance at the beginning of the period.
The following aggregated amounts of transaction prices relate to the performance obligations from existing contracts that are
unsatisfied or partially unsatisfied as at 31 December 2019:
Revenue expected to be recognised
2020
£’000
4,619
2021
£’000
935
2022
£’000
5
Total
£’000
5,559
42 Jaywing plc Annual Report and Accounts 2019
2. Other operating income
Other operating income
2019
£'000
13
2018
£'000
64
During the years to 31 March 2018 and 31 March 2019, the Group received money from the administrator of a client for a contractual
obligation to perform services on their behalf. During the year, the Group received a further distribution of £13,000. It is anticipated
there may be further distributions in the future but the Board is unaware of the quantum or timing of these potential receipts.
3. Operating expenses
Continuing operations:
Wages and salaries
Share-based payments
Depreciation
Exceptional items
Amortisation
Impairment to the carrying value of goodwill
Other operating expenses
Compensation for loss of office
2019
£'000
21,082
177
412
(265)
1,795
1,050
5,533
29,784
883
883
2018
£'000
21,165
194
435
275
1,905
-
7,592
31,566
219
219
30,667
31,785
Wages and salaries include £Nil (2018: £547,000) of post-acquisition employment costs relating to the purchase of Massive Group
PTY, £245,000 (2018: £Nil) of post-acquisition employment costs relating to the purchase of Frank Digital PTY and £100,000 (2018:
£Nil) of post-acquisition employment costs relating to the purchase of The Comms Department Ltd.
4. Finance income
Interest income
Total
5. Finance costs
Interest expense
Finance charge on acquisition
Total
6. Tax expense
Recognised in the consolidated statement of comprehensive income:
Current year tax
Origination and reversal of temporary differences
Total tax credit
Reconciliation of total tax charge:
Loss before tax
Taxation using the UK Corporation Tax rate of 19% (2018: 19%)
Effects of:
Non-deductible expenses
Total tax credit
2019
£'000
4
4
2019
£'000
292
13
305
2019
£'000
91
(266)
(175)
2018
£'000
-
-
2018
£'000
193
10
203
2018
£'000
262
(345)
(83)
(1,110)
(1,216)
(211)
36
(175)
(231)
148
(83)
43 Jaywing plc Annual Report and Accounts 2019
7.
(Loss)/profit per share
Basic profit/(loss) per share from continuing operations
Basic loss per share from discontinued operations
Basic total loss per share
Diluted profit/(loss) per share from continuing operations
Diluted loss per share from discontinued operations
Diluted total loss per share
2019
Pence per
Share
2018
Pence per
Share
(1.15p)
(1.72p)
(2.87p)
(1.15p)
(1.72p)
(2.87p)
(1.06p)
(0.15p)
(1.21p)
(1.06p)
(0.15p)
(1.21p)
(Loss)/profit per share has been calculated by dividing the (loss)/profit attributable to shareholders by the weighted average
number of ordinary shares in issue during the year.
The calculations of basic and diluted (loss)/profit per share are:
Profit/(loss) for the year attributable to shareholders from continuing operations
Loss for the year attributable to shareholders from discontinued operations
Total loss for the year attributable to shareholders
Weighted average number of ordinary shares in issue:
Basic
Adjustment for share options
Diluted
Adjusted earnings per share
From continuing and discontinued operations:
Basic adjusted earnings per share
Diluted adjusted earnings per share
2019
£'000
(1,075)
(1,610)
(2,685)
2018
£'000
(986)
(141)
(1,127)
2019
Number
2018
Number
93,432,217
1,706,627
93,432,217
1,269,928
95,138,844
94,702,145
2019
Pence per
Share
2018
Pence per
Share
1.39p
1.36p
1.78p
1.76p
Adjusted earnings per share have been calculated by dividing the profit attributable to shareholders before amortisation, charges
for share options and acquisition related costs during the year, by the weighted average number of ordinary shares in issue during
the year. The numbers used in calculating the basic and diluted adjusted earnings per share are reconciled below:
Total loss for the year attributable to shareholders
Amortisation
Impairment to the carrying value of goodwill
Loss on sale of HSM Limited
Acquisition related costs
Charges for share-based payments
Adjusted profit attributable to shareholders
Current year tax charge
2019
£'000
(2,685)
1,885
1,050
1,370
(411)
177
1,386
(91)
1,295
2018
£'000
(1,127)
2,033
-
-
827
193
1,926
(262)
1,664
44 Jaywing plc Annual Report and Accounts 2019
8. Expenses and auditor's remuneration
The following are included in profit before tax:
Depreciation of property, plant and equipment
Amortisation of other intangible assets
Compensation for loss of office
Employee emoluments
Auditor's remuneration:
Audit of company financial statements
Other amounts payable to the auditor and its associates in respect of:
Audit of subsidiary company financial statements
Audit related assurance services
Taxation compliance services
Taxation advisory services
Due diligence services
2019
£'000
412
1,765
883
21,014
36
81
19
35
7
-
2018
£'000
555
2,033
219
25,302
34
83
14
23
29
37
Amounts paid to the Group’s auditor in respect of services to the Company, other than the audit of the Company’s financial
statements, have not been disclosed separately as the information is required instead to be disclosed on a consolidated basis.
9. Key management personnel compensation
Key management of the Group is considered to be the Board of Directors and the Senior Leadership Team.
Short-term benefits:
Salaries including bonuses
Social security costs
Total short-term benefits
Share-based payment charge
Defined contribution pension plan
Key management compensation
Further information in respect of Directors is given in the Directors’ Remuneration Report on page 16.
Remuneration in respect of Directors was as follows:
Emoluments receivable
Fees paid to third parties for Directors’ services
Company pension contributions to money purchase pension schemes
2019
£’000
2,183
298
2,481
177
208
2,866
2019
£'000
842
30
97
969
2018
£’000
2,452
341
2,793
193
134
3,120
2018
£'000
1,191
3
112
1,306
During the current period and the prior year, there were no benefits accruing to Directors in respect of the defined contribution
pension scheme.
The highest paid Director received remuneration of £264,000 (2018: £346,000).
45 Jaywing plc Annual Report and Accounts 2019
10. Staff numbers and costs
The average number of persons employed by the Group (including Directors) during the year, analysed by category, was as
follows:
Continuing operations:
Management and administration
Call centre operatives
Account management and production
Information strategists
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
Share option charges – PSP Options (see note 9)
Share option charges – Employers NI (see note 9)
2019
Number
2018
Number
80
-
275
57
412
2019
£'000
17,890
2,003
1,189
184
(7)
21,259
88
204
286
61
639
2018
£'000
22,364
2,478
814
209
(16)
25,849
11. Employee benefits
The Company grants share options under the Jaywing plc Performance Share Plan, more details of which are given in the
Directors’ Remuneration Report.
Details of the share options granted during and outstanding at the end of the year are as follows:
2019
2018
At start of the year
Issued during the year
Exercised during the year
Lapsed during the year
At end of the year
Number of
share options
6,126,322
2,546,042
-
(2,502,438)
6,169,926
Weighted
average
exercise
price
Number of
share options
Weighted
average
exercise
price
5.0p
5.0p
5.0p
5.0p
5.0p
7,959,291
-
(185,869)
(1,647,100)
6,126,322
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
Exercisable at end of year
949,639
5.0p
858,117
Share options outstanding at the end of the year have an exercise price of 5 pence. Awards of share options are made on an
individual basis with particular performance criteria relevant to the participant. Options are usually granted for a maximum of five
years.
46 Jaywing plc Annual Report and Accounts 2019
Share options outstanding at the year-end were as follows:
As at 31 March 2019
Number
6,169,926
As at 31 March 2018
Number
7,959,291
Exercise price
5.0p
Period of exercise
From
01/04/2017
To
30/09/2022
Exercise price
5.0p
Period of exercise
From
01/04/2107
To
30/09/2020
On 4 May 2016, 30 September 2016 and 2 December 2018, share options were granted to employees in order to incentivise
performance. These share options will vest based upon conditions which relate to either EBITDA performance in the period
commencing 1 April 2016, the share price at various future dates and continued employment with Jaywing.
Charge to the statement of comprehensive income
Under IFRS 2, the Group is required to recognise an expense in the relevant Company’s financial statements. The expense is
apportioned over the vesting period based upon the number of options which are expected to vest and the fair value of those
options at the date of grant.
For the awards made the Group commissioned an independent valuation from BDO LLP, and adopted their findings.
The weighted average fair value for the EBITDA performance options was calculated using the Black-Scholes Merton Option
Pricing Model, and the fair value for the share price options was calculated using the Monte Carlo Model. The following inputs
were used:
Share price at date of grant
Exercise price
Expected volatility
Dividend yield
Risk-free rate
Option life
2019
£'000
19p
5p
37.3%
0%
0.88%
2.3 years
Expected volatility was determined by calculating the standard deviation of the share price multiplied by the square root of the
relevant time period of the option grant to give an indication of the share price volatility. The risk-free rate was calculated using
the yield on long-dated UK Government Treasury Gilts at each date of grant.
The fair value of the EBITDA performance options was calculated between 14.10p and 23.12p, depending on the period to which
the options relate.
The fair value of the share price options and the retention options was calculated as 6.13p.
47 Jaywing plc Annual Report and Accounts 2019
12. Disposal of subsidiary
On 10 January 2019, Jaywing plc announced that it had completed the sale of its contact centre business, HSM Limited, for a total
transaction value of £403,000 in cash. This was made up of upfront consideration of £500,000, less a cash free/debt free
adjustment of £97,000. The funds were provided by Bidco, which is backed by Aquiline Capital Partners LLC, a New York and
London-based private equity firm investing in financial services and technology.
At the date of disposal, the carrying amounts of the disposal group’s net assets were as follows:
Assets
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Current assets
Trade and other receivables
Tax receivable
Deferred tax asset
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Bank overdraft
Trade and other payables
Net assets of disposal group
Disposal proceeds (net of professional fees, sale incentive
and completion accounts provision)
Loss on disposal
£’000
164
569
10
743
1,928
30
37
-
1,995
2,738
(241)
(788)
(1,029)
1,709
(339)
1,370
The loss on disposal is included in the loss for the year from discontinued operations in the Consolidated Statement of
Comprehensive Income.
Operating profit of the disposal group until the date of disposal is summarised as follows:
Revenue
Direct costs
Gross profit
Amortisation
Operating expenses
Operating loss
Loss before tax
Tax credit
Loss for the period from discontinued
operations
Loss on disposal
Total loss from discontinued operations
Period ended
31 Dec 2019
£’000
Year ended
31 March 2018
£’000
5,152
(118)
5,034
(93)
6,030
(164)
5,866
(128)
(5,181)
(5,888)
(150)
(150)
9
(141)
(240)
(240)
-
(240)
(1,370)
(1,610)
48 Jaywing plc Annual Report and Accounts 2019
Cashflows generated by the disposal group for the reporting periods under review until its disposal are as follows:
Net cash outflow from operating activities
Net cash inflow/(outflow) from investing
activities
Net increase/(decrease) in cash, cash
equivalents and bank overdrafts from
discontinued operations
Year ended
31 March 2019
£’000
Year ended
31 March 2018
£’000
(133)
296
(429)
(204)
163
(633)
Of the cashflows from investing activities, £339,000 relates to the proceeds from the sale of the disposal group.
13.
Interests in Subsidiaries
The details of subsidiaries held directly by the Group are set out in Note 11 of the plc parent company accounts. The Group includes
two subsidiaries (2018: three) with material non-controlling interests (NCI):
Name
Massive Group PTY
Frank Digital PTY
Jaywing Innovation Ltd
Proportion of ownership interests
and voting rights held by NCI
2018
25%
25%
25%
2019
25%
25%
0%
Total comprehensive
income allocated to NCI
2018
69
-
(75)
(6)
2019
109
31
-
140
Accumulated NCI
2019
909
242
-
1,151
2018
800
211
707
1,718
No dividends were paid to the NCI during the years 2019 and 2018. During the year, Jaywing plc acquired the 25% of Jaywing
Innovation Ltd not previously owned for consideration of £138k and the £707k was transferred into retained earnings as can be
seen on the Consolidated statement of changes in equity.
Management are of the view that Massive Group PTY is material to the results of the Group and further financial information is
disclosed below:
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Equity attributable to owners of the parent
Non-controlling interest
Revenue
Profit and total comprehensive income for the year attributable to owners of the parent
Profit and total comprehensive income for the year attributable to NCI
Profit and total comprehensive income for the year
Net cash from operating activities
2019
£'000
108
1,439
1,547
-
(438)
(438)
832
909
2019
£'000
2,831
436
109
545
2019
£'000
-
2018
£'000
126
772
898
-
(208)
(208)
518
800
2018
£'000
1,843
276
69
345
2018
£'000
79
49 Jaywing plc Annual Report and Accounts 2019
14. Property, plant and equipment
Leasehold
improvements
£'000
Office
equipment
£'000
Cost
At 1 April 2017
Additions
Acquisition of subsidiaries
Disposals
At 31 March 2018
Additions
Disposals
At 31 March 2019
Depreciation
At 1 April 2017
Depreciation charge for the year
Acquisition of subsidiaries
Depreciation on disposals
At 31 March 2018
Depreciation charge for the year
Depreciation on disposals
At 31 March 2019
Net book value
At 31 March 2019
At 31 March 2018
At 1 April 2017
1,214
523
-
-
1,737
106
(405)
1,438
745
477
-
-
1,222
183
(387)
1,018
420
515
469
2,026
342
112
(107)
2,373
146
(1,108)
1,411
1,400
78
72
(105)
1,445
322
(951)
816
595
928
626
The assets are covered by a fixed charge in favour of the Group’s lenders.
Total
£'000
3,240
865
112
(107)
4,110
252
(1,513)
2,849
2,145
555
72
(105)
2,667
505
(1,338)
1,834
1,015
1,443
1,095
50 Jaywing plc Annual Report and Accounts 2019
15. Goodwill
Cost and net book value
At 1 April 2018
Finalisation of fair value related to acquisitions made in the year
ended 31 March 2018
Impairment to the carrying value of goodwill
Disposals
At 31 March 2019
Brand Performance
Scope Creative Marketing Limited
Jaywing Central Limited
Bloom Media (UK) Limited
Frank Digital PTY
Online Performance
Epiphany Solutions Limited
Massive Group PTY
Data, Analysis & Technology
Alphanumeric Limited
Discontinued Operations
HSM Limited
Goodwill
£'000
34,496
176
(1,050)
(568)
33,054
2019
£'000
5,550
5,205
4,287
818
5,957
1,895
2018
£'000
5,550
6,255
4,287
662
5,937
1,895
9,342
9,342
-
568
33,054
34,496
The additions in the year relate to existing investments as fair values were finalised around the acquisition and put / call options.
Goodwill and other intangible assets have been tested for impairment by assessing the value in use of the relevant cash generating
units. The value in use calculations were based on projected cash flows in perpetuity. Budgeted cash flows for 2019/20 to 2026/27
were used. These were based on the forecast for 2020 with growth rates of 5% to 25% then applied for the following three years,
and 2.0% to 7.5% for the next three years. Subsequent years were based on a reduced rate of growth of 2% into perpetuity.
The average year-on-year growth in earnings before interest, tax, depreciation and amortisation (EBITDA) that has been used as
the basis for forecasting cash flows for each of the cash generating units when testing for impairment were:
2020/21 to 2022/23
2023/24 to 2025/26
Perpetuity
Year-on-year growth
5.0% - 25.0%
2.0% - 7.5%
2.0%
These growth rates are based on past experience and market conditions and discount rates are consistent with external information.
The growth rates shown are the average applied to the cash flows of the individual cash generating units and do not form a basis for
estimating the consolidated profits of the Group in the future. The growth rates used, and the periods they cover are based on an
ability to deliver additional revenue efficiently. They also assume future financing is made available as discussed in the Directors’
Report.
The discount rate used to test the cash generating units was the Group’s pre-tax Weighted Average Cost of Capital (“WACC”) of
10.2% (2018:11.5%). The individual cash generating units were assessed for risk variances from the WACC, but in the absence
of geographical risk, currency risk and any significant price risk variations, the same WACC was used for all the cash generating
units.
As a result of these tests an impairment of £1,050k to Jaywing Central Limited was considered necessary (2018: £Nil). Reduced
spend from a large client has created the need for this impairment.
The Directors have performed a sensitivity analysis in relation to the WACC used, which showed that no impairment would be
required for WACCs of up to 15% in other CGUs apart from Jaywing Central Limited.
The Directors have also performed a sensitivity analysis in relation to the year-on-year growth in EBITDA. If the growth rates were
to be reduced by 1% in each CGU no impairment charge would be required apart from Jaywing Central Limited.
51 Jaywing plc Annual Report and Accounts 2019
16. Other intangible assets
Cost
At 1 April 2017
Additions during the year from acquisitions
Additions during the year
At 31 March 2018
Additions during the year
Disposal
At 31 March 2019
Amortisation
At 1 April 2017
Amortisation charge for the year
At 31 March 2018
Amortisation charge for the year
Amortisation adjustment
Disposals
At 31 March 2019
Net book amount
At 31 March 2019
At 1 April 2018
At 1 April 2017
Customer
relationships
Order books
Trademarks
Development
costs
£'000
£’000
£’000
£'000
23,169
1,457
1,080
317
-
-
-
-
-
788
-
448
Total
£'000
26,494
317
448
23,486
1,457
1,080
1,236
27,259
-
(2,181)
21,305
17,327
1,852
19,179
1,612
-
(2,181)
18,610
2,695
4,307
5,842
-
-
-
-
251
(16)
251
(2,197)
1,457
1,080
1,471
25,313
1,457
-
1,457
-
-
-
1,457
-
-
-
171
79
250
63
-
-
313
767
830
909
309
102
411
210
(52)
-
569
902
825
479
19,264
2,033
21,297
1,885
(52)
(2,181)
20,949
4,364
5,962
7,230
The cost of brought forward customer relationships was determined as at the date of acquisition of the subsidiaries by professional
valuers. The valuations used the discounted cash flow method, assuming rates of customer attrition at 10% and sales growth at
2% each year. The discount rate applied at that time to the future cash flows were specific to each subsidiary and were all in the
range 14.6% to 15.5%.
Trademarks represent the trading names used by the company. These are estimated to have an economic life of 20 years. The
valuation used the discounted cash flow method, assuming an estimated royalty rate of 2% and sales growth of 2% each year.
The valuation assumes that each year 80% to 90% of revenues are generated using the Trademark and applied a discount rate
of 19%.
Development costs relate to internally developed products that are either sold to clients standalone or used to provide services to
them.
The order book represents contracted revenues over the next 12 months. The valuation used the discounted cash flow method,
assuming a net operating profit margin of 30.5%. The discount rate applied was 15.8%.
Goodwill and other intangible assets have been tested for impairment. The method, key assumptions and results of the
impairment review are detailed in note 15. On the basis of this review, it has been concluded that there is no need to impair the
carrying value of these intangible assets (2018: £Nil).
52 Jaywing plc Annual Report and Accounts 2019
17. Trade and other receivables
Trade receivables
Prepayments and accrued income
Deferred tax
Other receivables
2019
£'000
6,215
1,530
95
416
8,256
2018
£'000
8,042
3,439
124
149
11,754
The carrying amount of trade and other receivables approximates to their fair value.
All of the Group’s trade and other receivables have been reviewed for indicators of impairment and lifetime credit losses. Certain
trade receivables were found to be impaired, and a loss allowance for lifetime credit losses has been recorded. The amount
charged to the consolidated income statement for the year in relation to expected credit losses was £87,000 (2018: £35,000).
Trade and other receivables which are not impaired or past due are considered by the Group to be of good credit quality.
The movement in the allowance for estimated irrecoverable amounts can be reconciled as follows:
Balance at start of the year calculated under IAS 39
Amounts written off (uncollectible)
Impairment loss reversed
Impairment loss
Balance at end of the year
The transition to IFRS 9 did not result in any adjustment.
2019
£'000
70
(96)
(6)
120
88
53 Jaywing plc Annual Report and Accounts 2019
18. Bank and overdraft, loans and borrowings
Summary
Borrowings
Borrowings are repayable as follows:
Within one year
Borrowings
Total due within one year
In more than one year but less than two years
In more than two years but less than three years
In more than three years but less than four years
Total amount due
Average interest rates at the balance sheet date were:
Term loan
Revolver loan
2019
£'000
5,650
5,650
1,800
1,800
3,850
-
-
5,650
%
4.10
N/A
2018
£'000
6,550
6,550
4,750
4,750
1,800
-
-
6,550
%
2.25
2.25
As the loans are at variable market rates their carrying amount is equivalent to their fair value.
The additional borrowing facilities available to the Group at 31 March 2019 were £2.0 million (2018: £2.0 million) and, taking into
account cash balances within the Group companies, there was £2.7 million (2018: £2.6 million) of additional available borrowing
facilities.
A Composite Accounting System is set up with the Group’s bankers, which allows debit balances on overdraft to be offset across the
Group with credit balances.
Reconciliation of net debt
Cash and cash equivalents
Borrowings
Net debt
1 April 2018
£’000
Cash flow
£’000
31 March 2019
£’000
632
632
(6,550)
(5,918)
58
58
900
958
The changes in the Group’s liabilities arising from financing activities can be classified as follows:
1 April 2018
Cash-flows:
-
Repayment
-
Proceeds
31 March 2019
1 April 2017
Cash-flows:
-
Repayment
-
Proceeds
31 March 2018
Long-term
borrowings
£’000
1,800
(900)
2,950
3,850
Long-term
borrowings
£’000
1,000
(1,200)
2,000
1,800
Short-term
borrowings
£’000
4,750
(3,550)
600
1,800
Short-term
borrowings
£’000
4,750
-
-
4,750
54 Jaywing plc Annual Report and Accounts 2019
690
690
(5,650)
(4,960)
Total
£’000
6,550
(4,450)
3,550
5,650
Total
£’000
5,750
(1,200)
2,000
6,550
19. Trade and other payables
Trade payables
Tax and social security
Other payables, accruals and deferred income
2019
£'000
2,604
1,137
5,805
9,546
2018
£'000
3,087
1,694
7,764
12,545
The carrying amount of trade and other payables approximates to their fair values. All amounts are short term.
Other payables, accruals and deferred income include deferred consideration (comprising put/call options and other deferred
consideration) which is carried at fair value through profit and loss (see note 35).
20. Provisions
At start of the year
Additional provisions
Disposal of HSM Limited
At end of the year
Total provisions are analysed as follows:
Current
2019
£'000
151
-
(109)
42
42
42
2018
£'000
173
(22)
-
151
151
151
At 31 March 2019 a provision of £42,000 (2018: £151,000) was recognised for dilapidations costs expected to be incurred on exit of
property. The provision has been estimated based on the costs already incurred to bring the property to its current condition. The
estimated costs have not been discounted as the impact is not considered to be significant. There are no significant uncertainties
about the amount or timing.
55 Jaywing plc Annual Report and Accounts 2019
21. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities:
Accelerated capital allowances on property, plant and equipment:
At start of year
Prior year adjustment
Rate change
Origination and reversal of temporary differences
At end of year
Other temporary differences:
At start of year
Prior year adjustment
Rate change
Origination on acquisition
Origination and reversal of temporary differences
At end of year
Total deferred tax:
At start of year
Rate change
Origination on acquisition
Origination and reversal of temporary differences (note 6)
At end of year
Origination on acquisition
Deferred tax is included within:
Deferred tax liability
Deferred tax asset
2019
£'000
(1)
(2)
-
15
12
828
2
-
-
(281)
549
827
-
-
(266)
561
656
(95)
561
2018
£'000
45
-
1
(47)
(1)
1,077
-
3
54
(306)
828
1,122
4
54
(353)
827
951
(124)
827
The majority of the other temporary differences relates to the liability arising on the valuation of intangible assets on acquisition.
There are no deductible differences or losses carried forward for which no deferred tax asset is recognised. There are no
temporary differences associated with investments in subsidiaries for which deferred tax liabilities have not been recognised.
22. Share capital
Authorised:
Authorised share capital at 31 March
2018 and at 31 March 2019
Allotted, issued and fully paid:
At 31 March 2018
At 31 March 2019
45p deferred
shares
£’000
5p ordinary
shares
£’000
45,000
10,000
45p deferred
shares
Number
5p ordinary
shares
Number
67,378,520
93,432,217
67,378,520
93,432,217
£’000
34,992
34,992
The 5 pence ordinary shares have the same rights (including voting and dividend rights and rights on a return of capital) as the
previous 50 pence ordinary shares. Holders of the 45 pence deferred shares do not have any right to receive notice of any general
meeting of the Company or any right to attend, speak or vote at any such meeting. The deferred shareholders are not entitled to
receive any dividend or other distribution and shall, on a return of assets in a winding up of the Company, entitle the holders only
to the repayment of the amounts paid up on the shares, after the amount paid to the holders of the new ordinary shares exceeds
£1,000,000 per new ordinary share. The deferred shares are also incapable of transfer and no share certificates have been issued
in respect of them.
56 Jaywing plc Annual Report and Accounts 2019
23. Share premium
At start of year
Issue of share capital
At end of year
24. Treasury shares
At start and end of year (99,622 shares)
25. Capital redemption reserve
At start and end of year
26. Share option reserve
At start of year
Share option charge
At end of year
2019
£'000
10,088
-
2018
£'000
9,108
980
10,088
10,088
2019
£'000
2018
£'000
(25)
(25)
2019
£'000
2018
£'000
125
125
2019
£'000
736
102
838
2018
£'000
504
232
736
The Board of Directors approved the original transfer of reserves from retained earnings to a designated share option reserve.
27. Minority interest
At start of year
(Disposal)/acquisition of subsidiaries
Share of profit/(loss) for the year
At end of year
28. Foreign currency translation reserve
At start of year
Exchange differences on translation of foreign operations
At end of year
29. Retained earnings
At start of year
Acquisition of non-controlling interest
Retained (loss)/profit for the year
At end of year
2019
£'000
1,718
(707)
140
1,151
2019
£'000
(20)
20
-
2018
£'000
1,513
211
(6)
1,718
2018
£'000
19
(39)
(20)
2019
£'000
(13,773)
569
(2,685)
(15,889)
2018
£'000
(12,646)
-
(1,127)
(13,773)
57 Jaywing plc Annual Report and Accounts 2019
30. Operating leases
The Group’s future minimum operating lease payments are as follows:
31 March 2019
31 March 2018
31 March 2017
Within 1 year
£'000
695
645
449
1 to 5 years
£'000
1,990
2,945
2,565
After 5 years
£'000
310
631
798
Total
£'000
2,995
4,221
3,812
The Company leases a number of office premises under operating leases. During the year £447,000 (2018: £741,000) was
recognised as an expense in the Statement of comprehensive income in respect of operating leases.
31. Capital commitments
The Group had no commitments to purchase property, plant and equipment at 31 March 2019 (2018: £Nil).
32. Related parties
The services of Mark Carrington as Non Executive Director of the Company were purchased from Deacon Street Partners Limited
for a fee of £30,000 (2018: £2,500). At the year end, £7,500 (2018: £2,500) was outstanding to Deacon Street Partners Limited.
During the period, the company made sales of £25,683 (2018: £17,646) to Run For All Limited, a company in which Mr R Shaw
is a Non-executive Director. At 31 March 2019 the balance receivable from Run For All Limited was £23,205 (2018: £330).
During the period, the company made sales of £59,661 (2018: £362,087) to Impellam plc, a company that Lord Michael
Ashcroft, the largest Jaywing plc shareholder, is Chairman of. At 31 March 2019 the balance receivable from Impellam plc was
£5,000 (2018: £50,951).
33. Accounting estimates and judgements
Accounting estimates
Impairment of goodwill and other intangible assets
The carrying amount of goodwill is £33,054k (2018: £34,496k) and the carrying amount of other intangible assets is £4,394k
(2018: £5,962k). The Directors are confident that the carrying amount of goodwill and other intangible assets is fairly stated, and
have carried out an impairment review. The forecast cash generation for each CGU and the WACC represent significant
assumptions and should the assumptions prove to be incorrect, there would be a significant risk of a material adjustment within
the next financial year. The sensitivity to the key assumptions is shown in note 15.
Share-based payment
On 4 May 2016, 30 September 2016 and 2 December 2018, share options were granted to employees in order to incentivise
performance. These share options will vest based upon conditions which relate to either EBITDA performance in the period
commencing 1 April 2016, the share price at various future dates or continued employment with Jaywing.
The share-based payment charge consists of two elements, the charge for the fair value at the date of grant and a charge for the
employer’s NI. The fair value charge has been assessed using an external valuation company, and judgement has been made
on the number of shares expected to vest based on the achievement of EBITDA and share price targets.
Accounting judgements
Recognition of revenue
The Directors consider that they act as a principal in transactions where the Group assumes the credit risk. Where this is via an
agency arrangement and the Group assumes the credit risk for all billings, it therefore recognises gross billings as revenue. For
other income sources, revenue recognition is assessed in line with the five steps of IFRS.
Availability of finance
The Directors have a clear expectation that the Group will be able to obtain the further funding required to enable it to continue to
adopt the going concern basis in preparing the financial statements.
Identification of performance obligations
The determination of the number of distinct performance obligations in a contract requires judgement, based on whether the
customer can benefit from use of the service on its own or together with other resources that are readily available to it, and also
whether the promise to transfer the service is separately identifiable from other promises in the contract. As explained in the
accounting policy for revenue, contracts usually include just one distinct performance obligation.
Allocation of the transaction price to performance obligations
Where a contract contains multiple performance obligations, the transaction price is required to be allocated to the different
performance obligations. Wherever possible, the transaction price is allocated on a standalone selling price basis, by reference to
the agreed customer statement of works. In the event that this is not available, the price is allocated to the various performance
58 Jaywing plc Annual Report and Accounts 2019
obligations on a reasonable basis with reference to the expected time involved in performing the service and management’s
experience of similar projects.
34. Financial risk management
The Group uses various financial instruments. These include loans, cash, issued equity investments and various items, such as
trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to
raise finance for the Company’s operations.
The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail
below.
The main risks arising from the Group’s financial instruments are market risk, cash flow interest rate risk, credit risk and liquidity
risk. The Directors review and agree policies for managing each of these risks and they are summarised below.
Market risk
Market risk encompasses three types of risk, being currency risk, fair value interest rate risk and price risk. In this instance price
risk has been ignored as it is not considered a material risk to the business. The Group’s policies for managing fair value interest
rate risk are considered along with those for managing cash flow interest rate risk and are set out in the subsection entitled
“interest rate risk” below.
Currency risk
The Group is only minimally exposed to translation and transaction foreign exchange risk.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs by closely
managing the cash balance and by investing cash assets safely and profitably.
The Group policy throughout the period has been to ensure continuity of funding. Short-term flexibility is achieved by overdraft
facilities.
The maturity of borrowings is set out in Note 17 to the Consolidated Financial Statements.
Interest rate risk
The Group finances its operations through a mixture of retained profits and bank borrowings. The Directors’ policy to manage
interest rate fluctuations is to regularly review the costs of capital and the risks associated with each class of capital, and to
maintain an appropriate mix between fixed and floating rate borrowings.
The interest rate exposure of the financial assets and liabilities of the Group is shown in the table below. The table includes trade
receivables and payables as these do not attract interest and are therefore subject to fair value interest rate risk.
Financial assets:
Floating interest rate:
Cash
Zero interest rate:
Trade receivables
Financial liabilities:
Floating interest rate:
Overdrafts
Bank loans/revolving facility
Zero interest rate:
Trade payables
2019
£'000
2018
£'000
690
632
6,215
6,905
-
5,650
2,604
8,254
8,042
8,674
-
6,550
3,087
9,637
59 Jaywing plc Annual Report and Accounts 2019
As at 31 December 2019, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
31 March 2019
Bank borrowings
Trade and other payables
Total amount due
Current
Non-current
Within 6
months
6 to 12
months 1 to 5 years
later than 5
years
£'000
1,005
9,546
10,551
£'000
987
-
987
£'000
3,954
-
3,954
£'000
-
-
-
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting period as follows:
31 March 2018
Bank borrowings
Trade and other payables
Total amount due
Current
Non-current
Within 6
months
6 to 12
months 1 to 5 years
later than 5
years
£'000
638
12,545
13,183
£'000
630
-
630
£'000
1,837
-
1,837
£'000
-
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities at
the reporting date.
Sensitivity to interest rate fluctuations
If the average interest rate payable on the net financial asset/net financial liabilities subject to a floating interest rate during the
year had been 1% higher than reported on the average borrowings during the year, then profit before tax would have been £61,846
lower, and if the interest rate on these liabilities had been 1% lower, profit before tax would have improved by £61,846.
Credit risk
The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items
do not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared
credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of
customers.
The expected loss rates are based on the payment profile for sales over the past 48 months before 31 March 2019 and 1 January
respectively as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect
current and forward-looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding. The Group has
identified gross domestic product (GDP) and unemployment rates of the countries in which the customers are domiciled to be the
most relevant factors and accordingly adjusts historical loss rates for expected changes in these factors. However, given the short
period exposed to credit risk, the impact of these macroeconomic factors has not been considered significant within the reporting
period.
Trade receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery. Failure to make payments
within 180 days from the invoice date and failure to engage with the Group on alternative payment arrangement, amongst other
things, are considered indicators of no reasonable expectation of recovery.
The Directors consider that the Group’s trade receivables were impaired for the year ended 31 March 2019 and a provision for
£61,000 (2018: £70,000) has been provided accordingly. See Note 17 for further information on financial assets that are past due.
Summary of financial assets and liabilities by category
The carrying amount of financial assets and liabilities recognised at the balance sheet date of the reporting periods under review
may also be categorised as follows:
Financial assets
Loans and receivables
Trade and other receivables
Cash and cash equivalents
2019
£'000
6,631
690
7,321
2018
£'000
8,191
632
8,823
60 Jaywing plc Annual Report and Accounts 2019
Financial liabilities:
Current:
Financial liabilities measured at amortised cost
Borrowings
Trade and other payables
Provisions for liabilities
(5,650)
(9,546)
(42)
(15,238)
(6,550)
(12,545)
(151)
(19,246)
Net financial assets and liabilities
(7,917)
(10,423)
Plant, property and equipment
Goodwill
Other intangible assets
Prepayments
Deferred tax
Taxation payable
Provisions for deferred tax
1,015
33,054
4,364
1,530
95
(205)
(656)
39,197
1,443
34,496
5,962
3,439
124
(249)
(951)
44,264
Total equity
31,280
33,841
Capital management policies and procedures
The Group’s capital management objectives are:
§
§
to ensure the Group’s ability to continue as a going concern; and
to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
This is achieved through close management of working capital and regular reviews of pricing. Decisions on whether to raise funding
using debt or equity are made by the Board based on the requirements of the business.
Capital for the reporting period under review is summarised as follows:
Total equity
35. Financial risk management
2019
£'000
2018
£'000
31,280
33,841
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a
fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
• Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis:
31 March 2019
Financial liabilities
Put/call options and other deferred consideration
Net fair value
Level 1
£’000
-
-
Level 2
£’000
-
-
Level 3
£’000
(1,632)
(1,632)
Total
£’000
(1,632)
(1,632)
61 Jaywing plc Annual Report and Accounts 2019
31 March 2018
Financial liabilities
Put/call options and other deferred consideration
Net fair value
Level 1
£’000
-
-
Level 2
£’000
-
-
Level 3
£’000
(1,417)
(1,417)
Total
£’000
(1,417)
(1,417)
There were no transfers between Level 1 and Level 2 in 2019 or 2018.
Measurement of fair value of financial instruments
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values, in
consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance team
reports directly to the chief financial officer (CFO) and to the audit committee. Valuation processes and fair value changes are
discussed among the audit committee and the valuation team at least every year, in line with the Group’s reporting dates.
The following valuation techniques are used for instruments categorised in Levels 2 and 3:
• Contingent consideration (Level 3) – The fair value of put/call options and other deferred consideration related to acquisitions is
estimated using a present value technique. The £1,632k fair value is estimated by probability-weighting the estimated future cash
outflows, adjusting for risk and discounting at 11.5%. The probability-weighted cash outflows before discounting are £1,874k and
reflect management’s estimate of a 100% probability that the contract’s target level will be achieved. The discount rate used is
11.5%, based on the Group’s estimated incremental borrowing rate for unsecured liabilities at the reporting date, and therefore
reflects the Group’s credit position. The effects on the fair value of risk and uncertainty in the future cash flows are dealt with by
adjusting the estimated cash flows rather than adjusting the discount rate.
The following table provides information about the sensitivity of the fair value measurement to changes in the most significant
inputs:
Description
Significant unobservable input
Put/call options and other
deferred consideration
Probability of meeting target
Estimate of
the input
100%
Sensitivity of the fair value
measurement to input
Not applicable
There are no significant interrelationships between the inputs and the unobservable inputs.
Level 3 fair value measurements
The reconciliation of the carrying amounts of financial instruments classified within Level 3 is as follows:
Balance at 1 April 2018
Gains recognised in profit or loss
Balance at 31 March 2019
Acquired through business combination
Amount recognised in profit or loss
Balance at 31 March 2019
Put/call
options and
other
deferred
consideration
£’000
1,417
-
1,417
82
133
1,632
36. Post balance sheet event
Trading conditions in the first quarter led to a reperformance of the impairment and going concern reviews. The results of these can
be found in note 15 and the Principal accounting policies.
62 Jaywing plc Annual Report and Accounts 2019
Company profit and loss account
Turnover
Administrative expenses
Operating loss
Income from fixed asset investment
Interest payable and similar charges
(Loss) / profit on ordinary activities before taxation
Taxation on ordinary activities
Note
2
3
4
5
6
2019
£'000
40
(13,207)
2018
£'000
-
(5,796)
(13,167)
(5,796)
6,546
6,240
(290)
(199)
(6,911)
(57)
245
119
(Loss) / profit and total comprehensive income on ordinary activities after
taxation
17
(6,968)
364
The accompanying notes to the parent Company Financial Statements form an integral part of these financial statements.
63 Jaywing plc Annual Report and Accounts 2019
Company Financial Statements
Company balance sheet
Fixed assets
Tangible assets
Investments
Current assets
Debtors due < 1 year
Current liabilities
Creditors: amounts falling due within one year
Total assets less current liabilities
Non current liabilities
Creditors: amounts falling due after more than one year
Net assets
Capital and reserves
Called up share capital
Share premium account
Treasury shares
Share option reserve
Capital redemption reserve
Profit and loss account
Equity shareholders' funds
Note
2019
£'000
2018
£'000
10
11
12
355
51,460
51,815
417
58,847
59,264
2,326
2,326
2,250
2,250
13
(11,938)
(14,495)
42,203
47,019
14
16
17
18
17
17
17
(3,850)
38,353
(1,800)
45,219
34,992
10,088
(25)
838
125
(7,665)
38,353
34,992
10,088
(25)
736
125
(697)
45,219
The financial statements were approved by the Board of Directors and authorised for issue on 27 September 2019.
Signed on behalf of the board of directors:
Michael Sprot
Director
The accompanying notes to the parent Company Financial Statements form an integral part of these financial statements.
64 Jaywing plc Annual Report and Accounts 2019
Company statement of changes in equity
Called-up
share
capital
£'000
Share
premium
account
£’000
Treasury
shares
£’000
Share
option
reserve
£’000
Capital
redemption
reserve
£’000
Profit
and loss
account
£'000
Total
£'000
At 1 April 2017
34,657
9,108
(25)
Share-based payment charge
Issue of share capital
Transactions with owners
Profit for the year and total
other comprehensive income
Total comprehensive income
-
335
335
-
335
-
980
980
-
980
At 31 March 2018
34,992
10,088
At 1 April 2018
34,992
10,088
Share-based payment charge
Issue of share capital
Transactions with owners
Profit for the year and total
other comprehensive income
Total comprehensive income
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(25)
(25)
-
-
-
-
-
At 31 March 2019
34,992
10,088
(25)
504
232
-
232
-
232
736
736
102
-
102
-
102
838
125
(1,061)
43,308
-
-
-
-
-
-
-
-
364
364
232
1,315
1,547
364
1,911
125
(697)
45,219
125
(697)
45,219
-
-
-
-
-
125
-
-
-
(6,968)
(6,968)
(7,665)
102
-
102
(6,968)
(6,866)
38,353
The accompanying notes to the parent Company Financial Statements form an integral part of these financial statements.
65 Jaywing plc Annual Report and Accounts 2019
Notes to the parent Company Financial Statements
1. Accounting policies
Jaywing plc is incorporated in England and Wales.
Statement of compliance
These financial statements have been prepared in accordance with applicable accounting standards and in accordance with
Financial Reporting Standard 101 – 'The Reduced Disclosure Framework' (FRS 101). The principal accounting policies adopted
in the preparation of these financial statements are set out below. These policies have all been applied consistently throughout
the year unless otherwise stated.
The financial statements have been prepared on a historical cost basis.
The financial statements are presented in Sterling (£) and have been presented in round thousands (£'000).
Going concern
After reviewing the Company's forecasts and projections, the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the foreseeable future. The Company therefore continues to adopt
the going concern basis in preparing its financial statements.
Disclosure exemptions adopted
In preparing these financial statements, the Company has taken advantage of all disclosure exemptions conferred by FRS 101.
Therefore, these financial statements do not include:
1
2
3
4
5
6
7
8
9
10
11
12.
A statement of cash flows and related notes
The requirement to produce a balance sheet at the beginning of the earliest comparative period
The requirements of IAS 24 related party disclosures to disclose related party transactions entered in to between
two or more members of the Group as they are wholly owned within the Group
Presentation of comparative reconciliations for property, plant and equipment, intangible assets
Capital management disclosures
Presentation of comparative reconciliation of the number of shares outstanding at the beginning and at the end of the
period
The effect of future accounting standards not adopted
Certain share-based payment disclosures
Disclosures in relation to impairment of assets
Disclosures in respect of financial instruments (other than disclosures required as a result of recording financial
instruments at fair value)
IFRS 9 disclosures in respect of allowances for expected credit losses reconciliations and credit risk and hedge
accounting
IFRS 15 disclosures in respect of disaggregation of revenue, contract assets reconciliations and contract liabilities
reconciliation and unsatisfied performance obligations
Investments in subsidiaries, associates and joint ventures
Investments in subsidiary undertakings, associates and joint ventures are stated at cost less any applicable provision for
impairment.
Tangible assets
Property, plant and equipment (PPE) is initially recognised at acquisition cost or manufacturing cost, including any costs directly
attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner
intended by the Company’s management.
PPE is subsequently measured at cost less accumulated depreciation and impairment losses.
Depreciation is recognised on a straight-line basis (unless otherwise stated) to write down the cost less estimated residual value
of PPE. The following useful lives are applied:
-
-
Leasehold improvements: 5-10 years
Fixtures, fittings and equipment: 2-5 years
66 Jaywing plc Annual Report and Accounts 2019
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal
proceeds and the carrying amount of the assets, and are recognised in profit or loss within other income or other expenses.
Financial Instruments - Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value
through profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities
is described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Financial Instruments - Classification and subsequent measurement of financial assets
For the purpose of subsequent measurement financial assets, other than those designated and effective as hedging instruments,
are classified into the following categories upon initial recognition:
•
financial assets subsequently measured at amortised costs
There are no financial assets that have been designated as fair value through other comprehensive income, or fair value through
profit or loss.
All financial assets are reviewed for impairment at least at each reporting date, to identify whether there is any objective evidence
that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each
category of financial assets, which are described below.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance
income or other financial items, except for impairment of trade receivables which is presented within other expenses.
IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ‘expected credit
loss (ECL) model’. This replaces IAS 39’s ‘incurred loss model’.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group considers a
broader range of information when assessing credit risk and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life
of the financial instrument.
Financial Instruments – Classification and subsequent measurement of financial liabilities
The Company’s financial liabilities include borrowings, trade creditors and other creditors.
Financial liabilities are measured subsequently at amortised cost using the effective interest method.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits, which is presented as cash at bank and in hand in the Balance Sheet.
Cash equivalents comprise short-term, highly liquid investments with maturities of three months or less from inception, that are
readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents
are presented as part of current asset investments in the Balance Sheet.
Operating leases
Where the Company is a lessee, payments made under an operating lease agreement are recognised as an expense on a
straight-line basis over the lease term.
Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense, on a
straight-line basis over the period of the lease. Associated costs, such as maintenance and insurance, are expensed as incurred.
67 Jaywing plc Annual Report and Accounts 2019
Financial guarantees
Financial guarantees in respect of the borrowings of fellow group companies are not regarded as insurance contracts. They are
recognised at fair value and are subsequently measured at the higher of:
•
•
the amount that would be required to be provided under IAS 37 (see policy on provisions below); and
the amount of any proceeds received net of amortisation recognised as income.
Provisions, contingent assets and contingent liabilities
Provisions for product warranties, legal disputes, onerous contracts or other claims are recognised when the Company has a
present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be
required, and amounts can be estimated reliably. The timing or amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring exists and management has either
communicated the plan’s main features to those affected or started implementation. Provisions are not recognised for future
operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there
are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the
class of obligations as a whole. Where the time value of money is material provisions are discounted to their present values, using
a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the liability.
Any reimbursement that is virtually certain to be collected from a third party with respect to the obligation is recognised as a
separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are
disclosed as contingent liabilities unless the outflow of resources is remote.
Holiday pay
A provision for annual leave accrued by employees as a result of services rendered, and which employees are entitled to carry
forward and use within the next 12 months is recognised in the current period. The provision is measured at the salary cost
payable for the period of absence.
Equity, reserves and dividend payments
Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a
financial liability or financial asset.
The Company's ordinary shares are classified as equity. Transaction costs on the issue of shares are deducted from the share
premium account arising on that issue. Dividends on the Company's ordinary shares are recognised directly in equity.
Revenue recognition
The turnover shown in the profit and loss account represents amounts invoiced in relation to work undertaken during the year.
The only invoice recognised was for project management support provided to a client. This has been assessed in line with the
five steps set out in IFRS 15:
1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognise revenue when the performance obligations are satisfied
Based on the above, the revenue is recognised in accordance with the stage of completion of contractual obligations to the
customer. The stage of completion is ascertained by assessing the fair value of the services provided to the balance sheet date
as a proportion of the total fair value of the contract. Losses on contracts are recognised in the period in which the loss first
becomes foreseeable.
Revenue – other revenue streams
Interest receivable
Interest receivable is reported on an accrual basis using the effective interest method.
68 Jaywing plc Annual Report and Accounts 2019
Dividends receivable
Dividends are recognised at the time the right to receive payment is established.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or as incurred.
Foreign currency translation
Foreign currency transactions are translated into the Company's functional currency using the exchange rates prevailing at the
dates of the transactions (spot exchange rate).
Foreign exchange gains and losses resulting from the re-measurement of monetary items denominated in foreign currency at
year-end exchange rates are recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at
the transaction date), except for non-monetary items measured at fair value, which are translated using the exchange rates at the
date when fair value was determined. Where a gain or loss on a non-monetary item is recognised in other comprehensive income,
the foreign exchange component of that gain or loss is also recognised in other comprehensive income.
Income taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive
income or directly in equity.
Calculation of current tax is based on tax rates and laws that have been enacted or substantively enacted by the end of the
reporting period. Deferred income taxes are calculated using the liability method.
Calculation of deferred tax is based on tax rates and laws that have been enacted or substantively enacted by the end of the
reporting period, that are expected to apply when the asset is realised or the liability is settled.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the entity expects to
recover the related asset or settle the related obligation.
Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss or deductible temporary difference
will be utilised against future taxable income. This is assessed based on the Company’s forecast of future operating results,
adjusted for significant non-taxable income and expenses, and specific limits on the use of any unused tax loss or credit. Deferred
tax assets are not discounted.
Deferred tax liabilities are generally recognised in full, with the exception of the following:
•
on the initial recognition of goodwill on investments in subsidiaries, where the Company is able to control the timing of
the reversal of the difference, and it is probable that the difference will not reverse in the foreseeable future, on the initial recognition
of a transaction that is not a business combination and at the time of the transaction affects neither accounting or taxable profit.
Deferred tax liabilities are not discounted.
Post-employment benefits and short-term employee benefits
Short-term employee benefits
Short-term employee benefits, including holiday entitlement, are current liabilities included in pension and other employee
obligations, measured at the undiscounted amount that the Company expects to pay as a result of unused entitlement.
Post-employment benefit plans
Contributions to defined contribution pension schemes are charged to profit or loss in the year to which they relate. Prepaid
contributions are recognised as an asset. Unpaid contributions are reflected as a liability.
Share-based payments
Where equity settled share options are awarded by the parent company to employees of this Company the fair value of the options
at the date of grant is charged to profit or loss over the vesting period with a corresponding entry in retained earnings.
Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options
that eventually vest.
69 Jaywing plc Annual Report and Accounts 2019
Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The
cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not
satisfied.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to the statement of comprehensive income over the remaining
vesting period.
Profit from operations
Profit from operations comprises the results of the Company before interest receivable and similar income, interest payable and
similar charges, corporation tax and deferred tax.
Put/call options
The put/call options in Massive Group PTY and Frank Digital PTY have been valued by an independent assessor and are
recognised with both a service and non-service element in the accounts. The non-service element is fully recognised as at the
date of acquisition and the fair value reviewed annually. The service element is treated as a cash settled share-based payment
with the share-based payment valued at the point of inception and the cost being spread over the life of the asset.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial instruments and non-financial assets. This involves
developing estimates and assumptions consistent with how market participants would price the instrument. Management bases
its assumptions on observable data as far as possible but this is not always available. In that case, management uses the best
information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction
at the reporting date (see note 35).
Significant judgement in applying accounting policies and key estimation uncertainty
When preparing the financial statements, management makes a number of judgements, estimates and assumptions about the
recognition and measurement of assets, liabilities, income and expenses.
The following are significant management judgements in applying the accounting policies of the Company that have the most
significant effect on the financial statements.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of
the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software
and IT equipment.
Valuation of investments
Management reviews the carrying value of investments at each reporting date, based on the future cashflows of those
investments.
70 Jaywing plc Annual Report and Accounts 2019
2. Other operating charges
Share based payment charge
Related National Insurance charge
Impairment of carrying value of investment
Administrative expenses
Total administrative expenses
100% of turnover arose in the United Kingdom (2018: 100%).
3. Operating loss
Operating loss is stated after charging:
Depreciation of owned fixed assets
4.
Income from fixed asset investments
Dividends received from subsidiary companies
5. Other interest payable and similar charges
Bank interest payable
Finance charge on acquisition
Total
6. Tax on ordinary activities
The tax charge is based on the profit for the year and represents:
UK corporation tax at 19% (2018: 19%)
Adjustment in respect of prior period
Total current tax
Deferred tax:
Origination and reversal of timing differences
The tax credit can be explained as follows:
Profit before tax
Tax using the UK corporation tax rate of 19% (2018: 19%)
Effect of:
Non-taxable income
Non-deductible expenses
Prior year adjustment
Current year credit
2019
£'000
133
(17)
7,130
5,961
13,207
2019
£'000
84
2019
£'000
6,546
2019
£'000
277
13
290
2019
£'000
1,037
(1,096)
(59)
2
(57)
2019
£’000
(6,911)
2018
£'000
154
(17)
-
5,659
5,796
2018
£'000
102
2018
£'000
6,240
2018
£'000
189
10
199
2018
£'000
1,096
(981)
115
4
119
2018
£'000
245
(1,313)
47
(1,195)
1,355
1,096
(57)
(909)
-
981
119
71 Jaywing plc Annual Report and Accounts 2019
7. Auditor’s remuneration
Details of remuneration paid to the auditor by the Company are shown in Note 8 to the Consolidated Financial Statements.
8. Directors and employees
Average number of staff employed by the Company
Aggregate emoluments (including those of Directors):
Wages and salaries
Social security costs
Pension contribution
Share based payment charge
Total emoluments
Further information in respect of Directors is given in the Directors’ Remuneration table on page 16.
Remuneration in respect of Directors was as follows:
Emoluments receivable
Fees paid to third parties for Directors’ services
Company pension contributions to money purchase pension schemes
The highest paid director received remuneration of £264,000 (2018: £346,000).
9. Dividends
The Directors do not recommend the payment of a dividend for the current year (2018: £Nil).
10. Tangible fixed assets
2019
2018
34
36
2019
£’000
3,156
355
196
116
3,823
2019
£'000
842
30
97
969
2018
£'000
3,381
393
163
137
4,074
2018
£'000
1,191
3
112
1,306
Cost at 1 April 2018
Additions
Cost at 31 March 2019
Depreciation at 1 April 2018
Charge for the year
Depreciation at 31 March 2019
Net book value at 31 March 2019
Net book value at 31 March 2018
Leasehold
Improvements
£’000
Fixtures &
fittings
£'000
Total
£’000
389
-
389
40
40
80
309
349
233
22
255
165
44
209
46
68
622
22
644
205
84
289
355
417
72 Jaywing plc Annual Report and Accounts 2019
11.
Investments
Cost at 1 April 2018
Acquisition of non-controlling interest
Fair value adjustment in respect of prior year additions
Disposal
Impairment
Capital contribution for share option scheme
Recharge of capital contribution from group companies
Cost as at 31 March 2019
Subsidiaries
£'000
58,847
707
82
(1,046)
(7,130)
34
(34)
51,460
The Company has carried out an impairment review of the carrying amount of the investments in subsidiaries. The impairment
review of investments was performed using the same cash flows and assumptions as were used in the Group’s financial
statements for the impairment review of goodwill, details of which can be found in Note 15 in the Group’s financial statements.
This review has concluded that the carrying value of the Company’s investments is impaired by £7,130k (2018: £Nil).
The finalisation of the fair value of the Frank Digital PTY Limited acquisition has resulted in an addition of £82k.
At 31 March 2019 the Company held either directly or indirectly, 20% or more of the allotted share capital of the following
companies:
Alphanumeric Group Holdings Limited
Alphanumeric Holdings Limited
Alphanumeric Limited
Bloom Media (UK) Limited
Dig for Fire Limited
Digital Marketing Group Limited
Class of
share
capital held
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Digital Marketing Group Services Limited Ordinary
Digital Marketing Network Limited
Digital Media and Analytics Limited
DMG Central Limited
DMG London Limited
Epiphany Solutions Limited
Epiphany Solutions PTY Limited
Frank Digital PTY Limited
Gasbox Limited
Graphico New Media Limited
Head Offfice Limited
Hyperlaunch New Media Limited
Inbox Media Limited
Iris Associates Limited
ISIS Direct Limited
Jaywing Central Limited
Jaywing Information Limited
Jaywing Innovation Limited
Jaywing North Limited
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Junction Brand Communication Limited
Ordinary
Massive Group PTY Limited
Prodant Limited
Ordinary
Ordinary
Proportion held
By parent
Company
100%
By the
Group
100%
-
100%
100%
-
100%
100%
100%
100%
-
100%
100%
-
75%
100%
100%
-
100%
-
-
-
100%
100%
100%
100%
-
75%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
Nature of
Business
Dormant
Dormant
Data services & consultancy
Agency services
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Search Engine Optimisation
Search Engine Optimisation
Website design and build
Direct marketing
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Online marketing & media
Dormant
Product development
Dormant
Dormant
Search Engine Optimisation
Dormant
73 Jaywing plc Annual Report and Accounts 2019
Scope Creative Marketing Limited
Shackleton PR Limited
The Comms Department Limited
Woken Limited
Ordinary
Ordinary
Ordinary
Ordinary
100%
-
-
-
100%
100%
100%
100%
Direct marketing
Online PR
Social Communication
Dormant
The Comms Department Limited is exempt from the requirement of the Companies Act relating to the audit of individual financial
statements by virtue of s479A of the Companies Act 2006.
All the companies listed above have been consolidated.
All the companies listed above are incorporated in England and Wales with the following exceptions:
Company
Epiphany Solutions PTY Limited
Frank Digital PTY Limited
Massive Group PTY Limited
Country of Incorporation
Australia
Australia
Australia
12. Debtors due within 1 year
Amounts due from Group undertakings
Prepayments and accrued income
Other taxation and social security
Corporation tax
13. Creditors: amounts falling due within one year
Bank loans and overdrafts (note 15)
Trade creditors
Amounts owed to Group undertakings
Other taxation and social security
Other creditors
Accruals and deferred income
Deferred tax
Deferred consideration payable on acquisition of subsidiary undertakings
2019
£'000
609
209
469
1,039
2,326
2019
£'000
6,618
251
2,622
90
53
672
-
1,632
2018
£'000
419
158
577
1,096
2,250
2018
£'000
9,995
352
1,803
90
10
826
2
1,417
11,938
14,495
Deferred consideration includes put/call options and other deferred consideration which has increased in the year due to fair value
movements of £133k and additions due to the finalisation of fair values associated with last years acquisition of Frank Digital PTY
Limited of £82k. All deferred consideration is carried at fair value through profit and loss.
14. Creditors: amounts falling due in more than one year
Bank loan
2019
£'000
3,850
3,850
2018
£'000
1,800
1,800
74 Jaywing plc Annual Report and Accounts 2019
15. Borrowings
Summary:
Bank overdraft
Bank loans
Borrowings are repayable as follows:
Within one year:
Bank overdraft
Bank loans
Total due within one year
Bank loans:
In more than one year but less than two years:
In more than two years:
Total due in more than one year:
16. Share capital
Allotted, issued and fully paid:
At 31 March 2018
At 31 March 2019
2019
£'000
4,818
5,650
10,468
2019
£'000
4,818
1,800
6,618
3,850
-
3,850
2018
£'000
5,245
6,550
11,795
2018
£'000
5,245
4,750
9,995
1,200
600
1,800
45p deferred
shares
Number
5p ordinary
shares
Number
67,378,520
93,432,217
67,378,520
93,432,217
£’000
34,992
34,992
The 5 pence ordinary shares have the same rights (including voting and dividend rights and rights on a return of capital) as the
previous 50 pence ordinary shares. Holders of the 45 pence deferred shares do not have any right to receive notice of any general
meeting of the Company or any right to attend, speak or vote at any such meeting. The deferred shareholders are not entitled to
receive any dividend or other distribution and shall, on a return of assets in a winding up of the Company, entitle the holders only
to the repayment of the amounts paid up on the shares, after the amount paid to the holders of the new ordinary shares exceeds
£1,000,000 per new ordinary share. The deferred shares are also incapable of transfer and no share certificates have been issued
in respect of them.
75 Jaywing plc Annual Report and Accounts 2019
17. Reserves
Called-up share capital – represents the nominal value of shares that have been issued.
Share premium account – includes any premiums received on issue of share capital. Any transaction costs associated with the
issuing of shares are deducted from share premium.
Profit and loss account – includes all current and prior period retained profits and losses.
Share option reserve – fair value charge for share options in issue.
Treasury shares – shares in the company that have been acquired by the company.
Capital redemption reserve – represents amounts transferred from share capital on redemption of issued shares.
18. Treasury shares
At 31 March 2019 and 31 March 2018
19. Share-based payments
Share-based payment charge is as follows:
Share-based payment
Related National Insurance costs
2019
£'000
2018
£'000
25
25
2019
£'000
133
(17)
116
2018
£'000
154
(17)
137
Details of the share options issued and the basis of calculation of the share-based payments, which all relate to share options
granted, are given in note 11 to the consolidated financial statements.
20. Provision for liabilities
At 1 April 2018
Amounts of deferred tax recognised in profit or loss
At 31 March 2019
21. Commitments under operating leases
Deferred tax
(note 6)
£'000
2
(2)
-
At 31 March 2019 the company had aggregate annual commitments under non-cancellable operating leases as set out below:
Operating leases which expire:
Within one year
Within two to five years
After five years
Land and buildings
2018
£'000
2019
£'000
168
673
463
1,304
168
673
631
1,472
22. Contingent liabilities
There is a cross guarantee between members of the Jaywing plc group of companies on all bank overdrafts and bank borrowings
with Barclays Bank plc. At 31 March 2019 the amount thus guaranteed by the Company was £Nil (2018: £Nil).
76 Jaywing plc Annual Report and Accounts 2019
23. Related parties
The Company is exempt from the requirements to FRS 101 to disclose transactions with other 100% members of the Jaywing plc
group of companies.
Transactions with other related parties are disclosed in Note 32 to the Consolidated Financial Statements.
24. Financial risk management objectives and policies
Details of Group policies are set out in Note 34 to the Consolidated Financial Statements.
25. Retirement benefits
Defined Contribution Schemes
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of
the Company in an independently administered fund. The pension cost charge represents contributions payable by the
Company to the fund and amounted to £196,000 (2018: £163,000).
26. Share based payments
Employees of the Company are entitled to participate an equity and cash-settled share option scheme.
The options are granted with a fixed exercise price and have a vesting period of up to two years. The vesting conditions relate to the
performance of the overall Jaywing plc Group and continued employment during the vesting period. There are no other market
conditions attached to the share options.
The number of options outstanding at the end of the year in respect of Company employees were 3,436,352 (2018: 4,584,485).
No share options were exercised during the year. The exercise prices for share options outstanding was 5p (2018: 5p). The
remaining contractual life of the share options was two years (2018: two years).
77 Jaywing plc Annual Report and Accounts 2019
Shareholder information
Annual General Meeting
The 2019 Annual General Meeting will be held on Monday 30 September 2019 at Fieldfisher LLP, Riverbank House, 2 Swan Lane,
EC4R 3TT at 11am.
Dividend
There is no dividend payable.
Multiple accounts on the shareholder register
If you have received two or more copies of or notifications about this document, this means that there is more than one account in
your name on the shareholders register. This may be caused by your name or address appearing on each account in a slightly different
way. For security reasons, the Registrars will not amalgamate the account without your written consent, so if you would like any
multiple accounts to be combined into one account, please write to Link Asset Services at the address given below.
Documents
The following documents, which are available for inspection during normal business hours at the registered office of the Company
on any weekday (Saturdays, Sundays and public holidays excluded), will also be available for inspection at the place of the AGM
from at least 15 minutes prior to the meeting until its conclusion.
§
§
§
Copies of the executive Directors’ service agreements and the non-executive Directors’ letters of appointment;
The memorandum and articles of association of the Company; and
Register of Directors’ interests in the share capital of the Company maintained under Section 809 of the Companies Act
2006.
Particulars of the Directors’ interest in shares are given in the Remuneration Report, which is contained in the Report and Accounts
for the year ended 31 March 2019.
Issued Share Capital
As at 26 September 2019 (being the last practicable date before the publication of this document), the Company’s issued share capital
comprised 93,432,217 ordinary shares of 5p each, of which 99,622 are held in Treasury. Therefore, as at 26 September 2019 the
total voting rights in the Company were 93,432,217. On a vote by show of hands, every member who is present in person or by proxy
has one vote. On a poll, every member who is present in person or by proxy has one vote for every ordinary share of which he or she
is a holder.
Share dealing services
To purchase or sell shares in Jaywing plc visit www.linksharedeal.com or call 0371 664 0445. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines
are open 08:00 - 16:30, Monday to Friday, excluding public holidays in England and Wales. This is not a recommendation to buy and
sell shares and this service may not be suitable for all shareholders. The price of shares can go down as well as up and you are not
guaranteed to get back the amount you originally invested. Terms, conditions and risks apply. Link Asset Services is a trading name
of Link Market Services Trustees Limited, which is authorised and regulated by the Financial Conduct Authority. This service is only
available to private shareholders resident in the European Economic Area, the Channel Islands or the Isle of Man.
Shareholder enquiries
Link Asset Services maintains the register of members of the Company. If you have any queries concerning your shareholding, or if
any of your details change, please contact the Registrars:
Link Asset Services, Northern House
Woodsome Park, Fenay Bridge
Huddersfield, HD8 0GA
Shareholder Helpline: 0871 664 0300 (calls cost 10p per minute plus network extras), fax: 01484 606484.
Textphone for shareholders with hearing difficulties: 0871 664 0532 (calls cost 10p per minute plus network extras)
Link Asset Services also offer a range of shareholder information online at www.linksharedeal.co.uk.
Website
Information on the Group is available at https://investors.jaywing.com.
78 Jaywing plc Annual Report and Accounts 2019
QCA Corporate Governance Index
Principle
number
1
2
3
4
5
6
7
8
9
10
Principle description
Page references
Establish a strategy and business model which promote
long-term value for shareholders
Seek to understand and meet shareholder needs and
expectations
Take into account wider stakeholder and social
responsibilities and their implications for long-term success
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Maintain the board as a well-functioning, balanced team led
by the chair
Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities
Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
Promote a corporate culture that is based on ethical values
and behaviours
Maintain governance structures and processes that are fit for
purpose and support good decision-making by the board
Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders and
other relevant stakeholders
2, 3, 5, 6
6, 15, 16, 21
3, 21
12, 20, 21
16, 20, 21
10, 21
10, 20, 21
3, 21
20, 21
5, 6, 8, 14, 15, 16, 21
79 Jaywing plc Annual Report and Accounts 2019