Jaywing plc
Annual Report and Accounts
For the year ended 31 March 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8
Company number 05935923
Contents
Overview
Financial highlights
Chairman’s Statement
Chief Executive's Report
Strategic Review
Principal Risks and Uncertainties
Corporate Governance
Board of Directors
Directors’ Report
Directors’ Remuneration Report
Corporate Governance Statement
Directors’ Responsibilities Statement
Financial Statements
Independent Auditor’s Report to the Members of Jaywing plc
Consolidated Financial Statements
Company Financial Statements
Additional Information
Shareholder Information
Company
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DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8
Overview
Jaywing is an award-winning, UK-based Data Science and Marketing business, with operations in the UK and Australia. Jaywing is
home to nearly 300 of the best thinkers across creative and brand strategy, performance marketing, risk consulting and data
science. Every day, handpicked teams collaborate to respond to diverse challenges across a range of sectors and businesses to
connect powerful ideas, rich data and new technologies. With large, specialist technical and creative power and over 60
experienced data scientists, Jaywing is particularly skilled at turning data into value, fuelling brands, connecting on customers’ terms
and reimagining businesses. Jaywing’s clients include a number of blue-chip companies such as first direct, Castrol, Hallmark,
PepsiCo, Mazda, (cid:43)(cid:54)(cid:37)(cid:38)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:86)(cid:75)(cid:76)(cid:85)(cid:72)(cid:3)(cid:58)(cid:68)(cid:87)(cid:72)(cid:85)(cid:17)(cid:3031)
Jaywing helps its clients find smart solutions to deliver profit growth and build brand value. It uses its unique science-based
expertise to create compelling insights from complex customer behaviour and builds these into effective digital marketing, customer
engagement and portfolio management activities.
Clients
In the UK, the business operates across three core sectors: Retail, Fast Moving Consumer Goods (“FMCG”) and Financial &
Professional Services, each of which accounts for around a third of revenues. Within these three go-to-market channels, Jaywing
also services clients in various industry sub-sectors, including Education, Not-for-Profit, Travel & Leisure, Technology, Utilities,
Energy, and Hospitality. The Group’s typical clients are divisions of FTSE 250 companies, other large corporates and high-growth
businesses.
Client concentration risk is low, with 197 active clients at the year end and with the largest client accounting for around 4% of annual
revenue.
Revenue from the Group’s operations in Australia accounted for 22% of revenue (2021: 21%), and we continue to benefit from close
collaboration between Australia and the UK both on specific clients and development of new capabilities.
People
Our people comprise a diverse mix of specialists, many with scarce skill sets. They include:
(cid:120) Award-winning creative teams
(cid:120) Experts in brand strategy, client management, PR and performance marketing
(cid:120) PhD mathematicians
(cid:120) Marketing analysts and econometric modellers
(cid:120) Highly skilled AI practitioners
These skills can be applied to a wide spectrum of challenges, ranging from credit risk modelling through to brand advertising and a
key strength is our ability to harness cross-functional teams to collaborate on client solutions.
3 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Financial highlights
Revenue
Adjusted EBITDA(1)
Adjusted EBITDA(1) excluding salary sacrifice
and Covid-19 government support (3)
Operating Loss
Loss before Tax
Cash Generated from Operations
Cash Generated from Operations excluding salary
sacrifice and Covid-19 government support (3)
Net Debt pre IFRS 16(2)
Loss per share
* See note 33
Reconciliation of Operating Loss with Adjusted EBITDA
Operating Loss
Add Back:
Impairment of Goodwill (4)
Depreciation of property, plant & equipment
Depreciation and impairment of right of use assets
Amortisation of intangibles
EBITDA
Impairment of other intangibles
Restructuring costs
Adjusted EBITDA
Salary sacrifice and Covid-19 government
support credit (3)
Adjusted EBITDA** excluding salary sacrifice
and Covid-19 government support (3)
Adjusted EBITDA** excluding salary sacrifice and
Covid-19 government support margin (3)
2022
£’000
23,324
2,206
Restated*
2021
£’000
20,165
2,181
2,166
651
(6,086)
(6,560)
1,587
1,547
(8,040)
(6.90p)
2022
£’000
(6,086)
6,131
327
752
730
1,854
-
352
2,206
(40)
(1,040)
(1,491)
2,258
728
(7,586)
(1.54p)
Restated*
2021
£’000
(1,040)
-
259
666
1,118
1,003
690
488
2,181
(1,530)
2,166
651
9.3%
3.2%
* See note 33
(1) Adjusted EBITDA represents EBITDA before restructuring costs and impairment charges
(2) Including accrued interest
(3) In response to the Covid-19 pandemic there was a voluntary salary sacrifice scheme in the UK companies between April
2020 and August 2020 which reduced payroll costs by £749k. Government support of £40k in the year ending 31 March
2022 (2021: £781k) was received, refer to note 2 for details.
(4) This non-cash charge has been recognised against the UK Cash Generating Unit (“CGU”) and follows a Group restructuring
during the course of FY22 during which all UK operations were integrated into one business unit and the previous 4 units
were moved into one UK CGU. This impairment has also taken into account the general economic environment and
headwinds facing the UK operations. Further details of this impairment are shown in Note 14 to the Consolidated Financial
Statements.
Operational Highlights
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Resilient revenue growth of 16%
£1.5m increase in Adjusted EBITDA excluding salary sacrifice and Covid-19 government support
Adjusted EBITDA margin of 9.3% (2021: 3.2%) excluding salary sacrifice and Covid-19 government support
Strong improvement in underlying cashflow from operations (Cash Generated from Operations excluding salary sacrifice
and Covid-19 government support)
Series of notable client wins
4 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Chief Executive’s Report
Overview
Following two challenging years for the business I am delighted to report a strong set of results for the financial year 2022, which
establishes the foundation for growth moving forward. The combination of 16% year-on-year revenue growth and improved cost
efficiencies has enabled us to increase underlying Adjusted EBITDA (excluding salary sacrifice and Covid-19 government support)
by 233% to £2.2m. Cash generated from operations decreased by £0.7m on the previous year, to £1.6m due to the previous year’s
salary sacrifice and significant Covid-19 government support, but increased £0.8m when these are excluded, supported by strong
revenue growth.
We have also been able to complete the acquisition of Frank Digital in Australia and the integration of our two businesses there as
“Jaywing Australia” is underway.
There have been a number of legacy issues to resolve in the last two years, including commitments relating to the Put Options for
both Australian acquisitions, and a legal claim in relation to a 2016 acquisition (now resolved in favour of Jaywing with costs
awarded to the Company). The Company is now well positioned to drive revenues and profitability through 2022/23 and beyond.
Jaywing UK
UK revenue increased by 13% compared with the prior year, driven by some notable new business wins. Our focus on an
integrated marketing proposition, enabled by data science, is resonating with existing and potential clients. The acceleration of the
move towards digital since the pandemic started has reinforced the need to really understand marketing effectiveness, and we have
been able to deliver both outstanding results and unprecedented insight to our clients.
Amongst our existing marketing clients, the biggest increases in spend came from Castrol, HSBC, Savills and La Redoute, and their
spend on performance marketing, in particular, has increased significantly.
Key new clients included Rush Hair & Beauty, Hallmark Cards, Cox Automotive, CityFibre and Skipton Building Society. Our new
business wins have accelerated through the year, with the most recent marketing successes including BNP Paribas, Restore Group
and Verdant.
In Risk Consulting, revenues increased 39%, from a combination of strong growth of existing client revenues and a number of key
wins. The biggest existing client spend increases came from HSBC, Starling Bank, Chetwood Financial and Vanquis Bank.
Significant wins included Swinton Insurance, Redwood Bank and Connected Places Catapult. We are continuing to develop our
Regulatory Risk revenue stream, and we are also seeing increased demand to apply our modelling capabilities to ESG-related risk
assessment.
Towards the end of 2021 we implemented some additional cost savings to improve the efficiency of our operations, including the
closure of our Newbury office and the merging of some functions to drive economies of scale. The full benefits of this will be seen in
the financial year ending 31 March 2023, but it supported a 10 percentage point underlying improvement in contribution margin in
the UK for the full year and a 6 percentage point improvement in EBITDA margin. EBITDA, excluding salary sacrifice and Covid-19
government support, improved by £1.6m year-on-year.
Our opportunity pipeline has grown steadily through the last year, giving confidence for the year ahead. In Quarter 4 alone, we won
new business with an annualised revenue of £3.3m.
Jaywing Australia
Our Australian businesses have experienced a different impact from the pandemic over the last 18 months. Revenues have
continued to grow strongly, but it has become more challenging to deliver those revenues cost-effectively, with the closure of the
borders severely restricting migrant labour, leading to dramatic wage inflation. This has been seen in both the cost of new hires and
in the impact on existing employee retention. Average salary costs per employee have increased by around 30% year on year,
which has squeezed margins and EBITDA.
Revenue grew by 25% for the full year, with key clients including Fiskars, Navitas, CSR and Athena. However, staff costs, including
both wage inflation and additional heads to support higher volumes, increased by 58%, reducing Australia’s EBITDA (excluding
Covid-19 government support) by £0.7m year-on-year.
Now that the borders have reopened, there are signs that wage inflation will move back to more normal levels from here on,
allowing future revenue increases to flow through to profitability.
In the first quarter of the year the main focus in Australia has been on integrating Frank Digital into Jaywing Australia, following the
completion of the Put Option. The combination of the businesses will allow us to deliver a compelling integrated marketing
proposition, whilst driving efficiencies in delivery as one larger business, led by Tom Geekie as CEO. Both companies have now
relocated to a new office in Barangaroo, Sydney, which will further support the new combined proposition and operating model.
6 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Acquisition of Midisi Limited
On 26th August 2022, post period end, the Company completed the acquisition of Midisi Limited, a marketing software development
business, which owns the intellectual property rights for the 'Decision' software (“the Acquisition”).
Decision is an award-winning Artificial Intelligence solution for online marketing activity that Jaywing currently sells to certain clients
which enables them to automate Pay-Per-Click advertising management.
The acquisition will enable Jaywing to take full ownership of the IP for Decision, thus providing a full revenue contribution from
Decision sales. The costs of running Decision are relatively fixed and the planned further growth of Decision sales to existing and
new customers is expected to help improve Jaywing’s overall margins as well as increase its recurring revenues. The acquisition
will provide a core platform for establishing an in-house Research & Development unit within Jaywing to develop and introduce
new technologies to solve client challenges. The Directors believe that there is a strong commercial rationale for the acquisition.
The Directors believe that the Acquisition will be immediately earnings-enhancing from the retention of 100% of revenues, and
that both the revenue and profit will increase over time as Jaywing focuses on adding new clients and developing the proposition
further.
The initial consideration for the acquisition was £400,000, which was paid from Jaywing’s existing cash resources, plus excess
cash of £845,230. Further fixed payments totalling £1.4m will be paid at 6-monthly intervals over 42 months, plus an additional
performance-related earn-out payable at 6-monthly intervals between months 13 and 49, funded out of planned cashflows
generated from Decision revenues. The earn-out relates to revenues generated from Decision, and the maximum earn-out
payment is capped at £3.2m.
Employees
Whilst the impact of the pandemic has diminished over time, its effects on working patterns are long-lasting. Our employees have
continued to adapt to working and collaborating in a hybrid model, and we recognise that our people are our most important asset.
During the year we brought all UK employees together onto common contracts, under one company (Jaywing UK Ltd), rather than
split between entities. We are also continuing to invest in a combination of experienced hires and talented but less experienced
recruits, who represent the Company’s future management.
Group revenue per employee grew by 13% in the year to £78.8k (2021: £69.8k).
I would like to thank all our colleagues in both the Australian and UK businesses for their continuing outstanding contribution over
the last 12 months.
Future Outlook
Jaywing has generated new business wins and growth in its opportunity pipeline, although the Board remains cautious about the
effects of potential recession in the UK and Australia. The Board believes there are significant opportunities for revenue in both of its
key markets and this coupled with the restructured cost base gives confidence for the year ahead.
Andrew Fryatt
Chief Executive Officer
Jaywing plc
6 September 2022
7 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Strategic Review
Results
Revenue for FY22 was £23.3m (2021: £20.2m), a growth of 16% on FY21, a pleasing result as the business continues its recovery
from the Covid pandemic and benefits from its go to market approach.
Adjusted EBITDA excluding salary sacrifice and Covid-19 government support income of £40k (2021: £1.530k), was £2,166k (2021:
£651k), a £1,515k improvement in the underlying Adjusted EBITDA, excluding these credits. The result was achieved through
revenue growth of 16% and strong cost control but no salary sacrifices and significantly reduced Covid-19 government support in
the current year.
Adjusted EBITDA for FY22 was £2,206k (£2,181k) and FY21 benefiting from £1.5m of salary sacrifice and Covid-19 government
support.
The statutory operating loss was £6,086k (2021: loss of £1,040k) and the statutory loss before taxation was £6,560k (2021:
£1,491k) following an impairment to Goodwill of £6.1m. This non-cash charge has been recognised against the UK Cash
Generating Unit (“CGU”) and follows a Group restructuring during the course of FY22 during which all UK operations were
integrated into one business unit and the previous 4 units were moved into one UK CGU. This impairment has also taken into
account the general economic environment and headwinds facing the UK operations. The acquisition goodwill relating to the
Australia CGU remains unimpaired. Further details of this impairment are shown in Note 14 to the Consolidated Financial
Statements.
Net cash from operations was down £519k to £1,289k (2021: £1,808k) due no salary sacrifice and significantly reduced Covid-19
government support in the current year, partially offset by strong revenue growth.
Cashflow generated from operations excluding salary sacrifice and Covid-19 government support amounted to £1,547k compared
with £728k for the prior year. The Cash Flow statement shows the movement in the cash position of the business.
Non-IFRS measures
The financial statements contain all the information and disclosures required by the relevant accounting standards and regulatory
obligations that apply to the Group. The annual report and financial statements also include measures which are not defined by
generally accepted accounting principles such as IFRS. We believe this information, along with comparable IFRS measures, is
useful as it provides investors with a basis for measuring the underlying performance of the Group on a comparable basis. The
Board and its executive management use these financial measures to evaluate the Group’s underlying operating performance. Non-
IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information presented in
compliance with IFRS. Similarly, non-IFRS measures as reported by us may not be comparable with similar measures reported by
other companies.
Key performance indicators used by the Board and executive managers include:
Revenue
Adjusted EBITDA(1)
Adjusted EBITDA %
Adjusted EBITDA** excluding salary sacrifice and
Covid-19 government support(3)
Operating Loss
Loss before Tax
Adjusted EBITDA** excluding salary sacrifice and
Covid-19 government support margin(3)
Net Debt pre IFRS16(2)
Loss per share
Average headcount
Revenue per head
Cash generated from operations
Client numbers at year end
2022
£’000
23,324
2,206
9.5%
2,166
(6,086)
(6,560)
9.3%
(8,040)
(6.90p)
296
78.8
1,587
197
Restated*
2021
£’000
20,165
2,181
10.8%
651
(1,040)
(1,491)
3.2%
(7,586)
(1.54p)
289
69.8
2,258
173
* See note 33
(1) Adjusted EBITDA represents EBITDA before restructuring costs and impairment charges
(2) Including accrued interest
(3) In response to the Covid-19 pandemic there was a voluntary salary sacrifice scheme in the UK companies between April
2020 and August 2020 which reduced payroll costs by £749k. Government support of £40k in the year ending 31 March
2022 (2021: £781k) was received, refer to note 2 for details.
(4) This non-cash charge has been recognised against the UK Cash Generating Unit (“CGU”) and follows a Group restructuring
during the course of FY22 during which all UK operations were integrated into one business unit and the previous 4 units
were moved into one UK CGU. This impairment has also taken into account the general economic environment and
headwinds facing the UK operations. Further details of this impairment are shown in Note 14 to the Consolidated Financial
Statements.
8 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Net Debt
At 31 March 2022, Net Debt including accrued interest (pre IFRS16) was £8.0m (2021: £7.6m), representing gross debt of £8.7m
(2021: £8.4m) net of cash of £0.7m (2021: £0.8m). The Company’s gross debt is represented by an amount of £7.7m (2021: £7.7m)
drawn down from the secured debt funding provided by the “Jaywing Facility” together with £1.0m (2021: £0.7m) of accrued and
unpaid interest on the Jaywing Facility. Jaywing Facility is described fully described in Note 30 and Note 18 to the Financial
Statements.
On 11 August 2022 the Jaywing Facility was increased by £1.0m to £9.2m. The Jaywing Facility has continued to be provided to the
Company on the same terms as the original secured loan facility acquired on 2 October 2019.
Australia
On 2 November 2021Jaywing plc agreed under the terms of a variation agreement with Matt Barbelli as the sole director of Frank
Digital Pty Ltd (“Frank Digital”) in Australia to accelerate the exercise of the Put and Call Option in relation to the 25% of the shares
in Frank Digital held by Barbelli Enterprises Pty Ltd ATF Barbelli Holdings Trust (“BEP”). Jaywing now owns 100% of the shares in
Frank Digital. The acceleration of this payment was agreed to facilitate Jaywing’s strategy, specifically the timely integration of its
two Australian businesses. Jaywing and Frank Digital had entered into an agreement on 27 February 2018, whereby Jaywing
acquired 75% of the shares of Frank Digital, with the remaining 25% subject to a Put and Call Option, exercisable from February
2022. The variation agreement that accelerated timing was agreed between Jaywing, BEP, Matt Barbelli and Massive Group Pty Ltd
and provided for the immediate acquisition of this 25% stake for a consideration of AUS $1.2m (c.£0.7m).
On 21 October 2020, the business completed the acquisition of the remaining 25% of the shares in Massive Group PTY Ltd
(“Massive Group”) which were not already owned by Jaywing following the exercise of the put option in relation to that 25% stake by
entities controlled by the two directors of Massive Group in Australia. Jaywing and Massive Group had entered into an Agreement
on 7 July 2016, whereby Jaywing acquired 75% of the shares of Massive Group, with the remaining 25% subject to a put and call
option exercisable from July 2020. Jaywing now owns 100% of the shares in Massive Group, which has traded as Jaywing Australia
since 2017.
The 25% stake was acquired by Jaywing on 21 October 2020 for a consideration of $4.0m (c.£2.2m), comprising $3.0m (c.£1.66m)
payable immediately, followed by a series of monthly payments totalling $1.0m (c.£0.5m) between the acquisition date and June
2021. At 31 March 2021 the outstanding balance was $0.5m (c £0.3m) which was fully satisfied on 30 June 2021. The total
consideration for the purchase of the 100% interest in Massive Group is $9.6m (c. £5.4m).
Impairment
As required by IAS 36, the Company has carried out an impairment review of the carrying value of our intangible assets and
goodwill. The weighted average cost of capital (“WACC”) was calculated 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. The calculated WACC rate
used for the impairment review was 11.5% for Australia and 11.8% in the UK (2021: both 11.5%). This was applied to cash flows for
each of the cash generating units using estimated growth rates in each business unit. The impairment review was based on two
main cash generating units being the UK and Australia. As part of the review, a number of scenarios were calculated using the
impairment model. These looked at what effect changes in the WACC rates and movements in EBITDA would have to the outcome.
The Group has impaired former acquisition goodwill by £6.1m. This non-cash charge has been recognised against the UK Cash
Generating Unit (“CGU”) and follows a Group restructuring during the course of FY22 during which all UK operations were
integrated into one business unit and the previous 4 units were moved into one UK CGU. This impairment has also taken into
account the general economic environment and headwinds facing the UK operations. The acquisition goodwill relating to the
Australia CGU remains unimpaired.
As part of the prior year restructuring, we have retired the Epiphany brand in the year, this resulted in an impairment to the carrying
value of the trademark of £690k in the reported 2021 results.
Share Options
The Company’s Performance Share Plan terminated on 8 October 2020 and there are no outstanding share options. This resulted
in a credit of £696k through the share option reserve in the prior year. No further balance remains.
Going Concern
The Group financial statements have been prepared on a going concern basis in accordance with UK Adopted International
accounting standards. In coming to their conclusion, the Directors have considered the Group’s profit and cash flow forecasts for
period of at least 12 months from the date these financial statements were approved.
In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the
Group can continue in operational existence for the foreseeable future.
In addition to the normal process of preparing forecasts for the Group, the Board has also considered downside risks and the
potential impact of the economic environment on the cash flows of the Group for a period to 30 September 2024. This has been
done by looking at various scenarios within the forecasts for the potential effect of changes in the market during the forecast period.
In considering their position the Directors have also had regard to letters of support in respect of the secured debt which have
received from each of the holders of that debt. Details of this debt are contained in Note 18 and Note 30.
The Group financial statements do not include the adjustments that would result if the Group were unable to continue as a going
concern. The Directors have a reasonable expectation that the Group has adequate resources to continue in existence for the
9 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 foreseeable future and have concluded it is appropriate to adopt the going concern basis of accounting in the preparation of the
financial statements.
Streamlined Energy and Carbon Reporting (SECR)
Under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, we are
mandated to disclose our UK energy use and associated greenhouse gas (GHG) emissions. Specifically, and as a minimum, we are
required to report those GHG emissions relating to natural gas, electricity and transport fuel, as well as an intensity ratio, under the
Streamlined Energy and Carbon Reporting (SECR) Regulations.
To ensure we achieve the transparency required, and deliver effective emissions management, we implement and utilise robust and
accepted methods. Accordingly, whilst the Regulations provide no prescribed methodology, we collate our GHG data annually and
complete the calculation of our carbon footprint using the latest Defra (Department for Environment, Food and Rural Affairs)/BEIS
(Department for Business, Energy & Industrial Strategy) emissions factors.
The period covered for the purposes of the SECR section is 1 April 2021 to 31 March 2022 and our calculations are for the following
scope:
-
-
Buildings- related energy – natural gas (Scope 1) and electricity (Scope 2) and
Employee owned vehicles (grey fleet) (Scope 3)
Calculation Methodology
The Jaywing GHG emissions were assessed in accordance with Defra’s ‘Environmental reporting guidelines: including Streamlined
Energy and Carbon Reporting Requirements’ and use the 2019 emission factors developed by Defra and BEIS.
Results
Element
Direct emissions (Scope 1) – natural gas and LPG
Indirect emissions (Scope 2) – from purchases electricity
Total tCO2e (Scope 1 & 2)
Other indirect emissions (Scope 3) – grey fleet travel
Gross Total Emissions
Intensity metric (Gross Emissions): Tonnes of CO2e per employee
Total energy consumption (kWh)
2021/22 (tCO2e)
59,126
63,396
122,522
20,964
143,486
586
621,382
Energy Efficiency
As an office-based business, our environmental impact is low and our Corporate Social Responsibility policy is available on
https://investors.jaywing.com, which covers our approach to the environment and sustainability.
At Jaywing, we
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encourage the use of remote working facilities to avoid travelling where possible
encourage the use of public transport wherever possible, both through our environmental policy and expenses policy, and
where not possible, encourage car sharing or environmentally friendly alternatives. We discourage, where possible, the use
of domestic flights
operate a cycle to work scheme
designed our head office to be as energy efficient as possible, with measures such as passive-stack ventilation and a large
amount of secure cycle storage plus showering facilities to encourage cycling
have switch off policies, including PIR activated lighting in some buildings, as well as trying to use energy as efficiently as
possible
have a clear policy on the use of plastics, with particular attention paid to single use plastics
aim to recycle all waste material that can be recycled and use local facilities to reduce the transportation of waste materials
aim to purchase energy efficient, environmentally and ecologically friendly products
monitor our energy usage within our buildings.
All policies, including our environmental policy, are reviewed annually.
Section 172 statement
In making decisions over the year, the Directors have considered what would be most likely to promote the success of the Company
for the benefit of all stakeholders and have had regard for the following:
the likely long-term consequences of any decision;
the interests of the Group’s employees;
the need to foster the Group’s business relationships with suppliers, customers and others;
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10 Jaywing plc Annual Report and Accounts 2022
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the impact of the Company’s operations on the community and the environment;
the desirability of the Company maintaining a reputation for high standards of business conduct; and the need to act fairly
as between shareholders of the Company.
In 2019 the Company adopted the Corporate Governance Code for Small and Mid-Size Quoted Companies from the Quoted
Companies Alliance (the “QCA Code”). The Board considers the QCA Code is an appropriate code of conduct for the Company. There
are details of how the Company applies the ten principles of the QCA Code on the Company’s investor website. The Corporate
Governance Statement forms part of this report.
The Chairman’s Statement and Chief Executive’s Report describe the Group’s activities, strategy and future prospects, including the
considerations for long term decision making.
The Company considers that its major stakeholders are its employees, clients, lenders and shareholders. When making decisions,
the interests of these stakeholders are considered informally as part of the Board’s group discussions.
The Company is committed to being a responsible employer and strives to create a working environment where its employees are
actively engaged and can contribute to its success.
The Company understands the value of maintaining and developing relationships with its clients and suppliers, to support its potential
for future growth.
The Board does not believe that the Group has a significant impact on the environments within which it operates. The Board
recognises that the Group has a duty to be responsible and is conscious that its business processes minimise harm to the environment,
and that it contributes as far as is practicable to the local communities in which it operates. The Group’s Corporate and Social
Responsibility Policy is available on the Group’s investor website and the SECR report for the Group is included in this report.
The Board recognises the importance of maintaining high standards of business conduct. The Group operates appropriate policies
on business ethics and provides mechanisms for whistle blowing and complaints which all employees are aware of. These are
maintained by the Policy Steering Committee.
The Board aims to maintain good relationships with its shareholders and treats them equally. The Group has presented at forums for
retail investors and has regular contact with its major shareholders.
Andrew Fryatt
Chief Executive Officer
Jaywing plc
6 September 2022
11 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Principal Risks and Uncertainties
The evaluation of the Company’s risk management process is the responsibility of the Board. Jaywing has developed its risk
reporting framework in conjunction with the business leadership team who take an active and responsible role in this process. Below
is a summary of the current key risks.
Risk
1.Pandemics and major incidents
Since late March 2020, Jaywing has been impacted by the
Covid-19 pandemic, with disruption to client and staff.
2.Loss of key staff
Jaywing is dependent on its ability to recruit and retain staff
with adequate experience and technical expertise to service
its clients.
3. Loss of business from clients / adverse economic
environment
Loss of business from clients could lead to a reduction in
overall revenue and profitability.
4. Changes in technology
The digital marketing industry is characterised by constant
developments in technology, online media and data science.
In this environment, it is vital to be at the forefront of this
change, to ensure Jaywing can provide the benefits of these
changes in technology to its clients and remain competitive.
5. Liquidity
Poor trading and cash flow performance could lead to a lack
of ongoing support from its lenders and an inability to raise
equity to meet the needs of the business.
6. Compliance with regulations and changes in
legislation
Failure to comply with regulations such as GDPR and
changes in legislation could lead to reputational damage for
Jaywing and its clients as well as fines and loss of business.
Mitigation
The Company was quick to take action to mitigate the impact of
this reduction in demand by putting in place measures to minimise
the financial effect on the Company.
Most of Jaywing’s staff can work effectively from home and we
continue to provide good levels of service and support to existing
clients as well as adding new business.
We continue to monitor the well-being of staff working remotely
and provide support as required.
In July 2021 we started a staged return to the office under a hybrid
model of remote working and remain under this model now.
The expertise of Jaywing’s people is a key source of competitive
advantage and the Company’s remuneration and incentive
packages are reviewed regularly to retain and incentivise key staff.
The Company also provides an attractive and collaborative
working environment and culture.
The Company aims to minimise such losses by continuing to focus
on providing a high quality service to its clients at all times as well
as offering a wide range of services to existing clients and adding
new clients through its new business activities.
Jaywing has restructured its main business sectors based on
clients and markets with the aim of getting closer to each client
with Jaywing’s full range of services tailored to their needs and the
markets they operate in. This has strengthened our ability to use
our full range of services to offer them relevant and effective
solutions.
Jaywing’s client concentration risk is low.
The impact of revenue losses on profitability is mitigated by
ensuring that the Company’s cost base is efficiently aligned with its
revenues.
Jaywing is committed to innovation in data science led products
and services and has dedicated resources to this. The Company
has close relationships with online media owners (e.g. Google)
and has early access to new product developments as a
consequence of the significant online media budgets that it
manages on behalf of its clients.
Jaywing also has a specialist 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’s key financial measures are focussed on cash generation
and net debt. The Company monitors its trading and cash flow
performance closely and takes prompt action to mitigate any
adverse trends.
Jaywing engages advisers in relevant specialisations to assist with
compliance. Experts in Jaywing’s business areas can ensure client
initiatives are all compliant, alongside external input where
appropriate.
12 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Board of Directors
Ian Robinson, Non-Executive Chairman
Chair of Audit & Risk Committee and member of Remuneration and Nomination Committees
Ian is a Non-Executive Director and Chairman of the Audit Committee of Gusbourne plc, an AIM listed English sparkling-wine business.
He is also a nonexecutive Director of a number of other privately-owned businesses. He is a Fellow of the Institute of Chartered
Accountants in England & Wales and holds an honours degree in Economics from the University of Nottingham.
Andrew Fryatt, Chief Executive,
Andrew has more than 30 years’ experience in technology-dependent businesses, primarily in the Retail and Telecoms sectors.
Following an honours degree in Economics from the University of Cambridge, he began his career in the Mars Group, progressing
through various marketing roles before joining Kingfisher Group in a senior marketing role. His experience included senior marketing
and commercial roles before moving into general management, and he has run major divisions of Daisy and Zen Internet, as well as
gaining experience as CEO of Ideal Shopping Direct plc. He has a particular focus on customer excellence and has received several
awards on behalf of his businesses for delivering outstanding service.
Mark Carrington, Non-Executive Director
Member of Audit & Risk, Remuneration and Nomination Committees
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 listed businesses.
Philip Hanson, Non-Executive Director
Chair of Remuneration and Nomination Committees and member of Audit & Risk Committees
Philip is a fellow of the Chartered Institute of Marketing and has extensive experience in marketing and ecommerce 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 & ecommerce Director for Travelex. He is also Non-Executive Director of the Bettys & Taylors Group. He was 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) until December 2020. He is a Non-Executive Director of Silver Blue LLC which oversees the worldwide agriculture
assets of the Goelet family. Philip was a Director of Travelex Card Services Ltd until December 2015.
13 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8
Directors’ Report
The Directors submit their Annual Report on the affairs of the Group and the Company and the audited Financial Statements for the
year ended 31 March 2022.
Principal activity
The principal activity of the Company, and Group, during the year under review is providing agency and consulting services in the
areas of creative and brand strategy, performance marketing, data science and risk.
Results and dividend
The Group’s loss after taxation for the year ended 31 March 2022 was £6.4m (2021: loss of £1.4m as restated, see note 33). The
Directors do not propose to pay a dividend.
Net assets at 31 March 2022 were £12.2m (2021: £19.0m as restated, see note 33).
Future developments
The future developments of the Group are referred to in the Chief Executive’s Report.
Political and charitable donations
The Group made charitable donations of £1k (2021: £3k) and no political donations during the current or prior year.
Directors’ interests
The present membership of the Board, together with biographies on each, is set out on page 13. 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.
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.
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 32 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 21 of the
Consolidated Financial Statements.
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 Conduct 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.
Major interests in shares
As at 31 March 2022, 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:
14 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Lord Michael Ashcroft
Lombard Odier Investment Managers Group
J & K Riddell
A Gardner
Bailey Family
Canaccord Genuity Group Inc
H & J Spinks
M Boddy
Miton UK Microcap Trust plc
Number of voting rights
23,919,737
22,020,709
5,372,638
5,037,470
4,687,500
3,805,000
3,508,772
3,366,667
2,871,035
2022
%
25.6
23.6
5.8
5.4
5.0
4.1
3.8
3.6
3.1
2021
%
25.6
23.6
5.8
5.4
5.0
4.1
3.8
5.4
3.8
Corporate Social Responsibility
The Board recognises the importance of social, environmental and ethical matters and it endeavours to take account of the interests
of the Group’s stakeholders, including its investors, employees, clients, suppliers and business partners when operating the business.
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 General Meeting.
Post Balance Sheet Events
Bloom legal case
On 12 April 2022 there was a high court judgment in the case of "Others vs Jaywing” where the judge found that the Claimants’
claim must be dismissed in its entirety and awarded costs, of which £419k has so far been recovered post year end.
Acquisition of Midisi Limited
On 26th August 2022, post period end, the Company completed the acquisition of Midisi Limited, a marketing software development
business, which owns the intellectual property rights for the ‘Decision’ software. (“the Acquisition)
The Directors believe that the Acquisition will be immediately earnings-enhancing from the retention of 100% of revenues, and
that both the revenue and profit will increase over time as Jaywing focuses on adding new clients and developing the proposition
further.
The initial consideration for the Acquisition was £400,000, and which was paid from Jaywing’s existing cash resources, plus
excess cash of £845,230. Further fixed payments totalling £1.4m will be paid at 6-monthly intervals over 42 months, plus an
additional performance-related earn-out payable at 6-monthly intervals between months 13 and 49, funded out of planned
cashflows generated from Decision revenues. The earn-out relates to revenues generated from Decision, and the maximum
earn-out payment is capped at £3.2m.
Connected to the acquisition, and to provide further working capital to the Group, the Company has increased the headroom in its
existing short-term finance facility by £1m, through a variation of the existing debt agreement with its lenders, DSC Investment
Holdings Ltd and 1798 Volantis Fund Ltd. This would cover the initial transaction costs, with subsequent payments funded out of the
Company’s cashflows.
Increase in debt facility
On 11 August 2022, post year end, the Company increased its existing short-term finance facility of £8.2m by £1m to £9.2m ,
through a variation of the existing debt agreement with its Lenders. Further details are provided in Notes 30 and 18 to the
Consolidated Financial Statements
Auditor
The Directors at the date of approval of this Annual Report confirm that:
(cid:120)
(cid:120)
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 General Meeting.
By Order of the Board
Andrew Fryatt
Director
Dated: 6 September 2022
15 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Directors’ Remuneration Report
In preparing this report, we have followed the QCA’s Corporate Code of Governance and drawn on best practice available.
The Remuneration Committee
During the year the Remuneration Committee comprised:
Philip Hanson (Chairman)
Ian Robinson
Mark Carrington
The Committee met four 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. 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.
Executive Directors are rewarded on the basis of individual responsibility, competence and contribution, and salary increases also
consider pay awards made elsewhere in the Group as well as external market benchmarking.
During the year to 31 March 2022 there were two Executive Directors on the Board as follows:
Andrew Fryatt (Chief Executive) – Appointed 21 April 2020
Caroline Ackroyd (Chief Financial Officer) was appointed to the Board on 22 April 2021. On 14 March 2022 we announced that
Caroline Ackroyd, the Company’s Chief Financial Officer and a board director had resigned to pursue other interests. Interim CFO
support was then provided by Ajay Handa (who did not join the Board) until 31 August 2022, when the Company announced the
appointment of Christopher Hughes as the Company’s Chief Financial Officer. Christopher is expected to join the Board in due course.
The Executive Directors participate in a pension scheme but do not participate in any Group healthcare arrangements.
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 Non-Executive Chairman received an annual fee of £50,000. Non-Executive
Directors’ fees currently comprise a basic fee of £30,000 per annum plus £10,000 for chairing a committee.
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.
Basic salary
Basic salary is set by the Remuneration Committee by considering the responsibilities, individual performance and experience of the
Executive Directors, as well as the market practice for executives in a similar position and wage levels elsewhere in the Group. 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.
Long Term Incentive Plan (LTIP)
There is currently no LTIP although the Remuneration Committee is exploring the development of a new scheme.
16 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Directors’ remuneration
The total amounts of the remuneration of the Directors of the Group for the years ended 31 March 2022 and 2021 are shown below:
31 March
Aggregate emoluments
Sums paid to third parties for Directors’ services
2022
£
554,022
30,000
584,022
2021
£
276,897
27,500
304,397
The emoluments of the Directors are shown below:
31 March
Andrew Fryatt
Caroline Ackroyd
Ian Robinson
Philip Hanson
Mark Carrington*
Total
Appointed 21 April
2020
Appointed 22 April
2021
Resigned 14 March
2022
2022
Fees and
salary
£
2022
Bonus
£
2022
Total
£
2021
Total
£
2022
Pension
contributions
£
2021
Pension
contributions
£
220,000
55,000
275,000
194,051
8,800
13,712
167,147
21,875
189,022
-
6,686
50,000
40,000
30,000
-
-
-
50,000
40,000
30,000
46,025
36,821
27,500
-
-
-
-
-
-
-
507,147
76,875
584,022
304,397
15,486
13,712
* Fee paid to a third party for the Director’s services
The salary of the highest paid Director was 5 times the average salary of all Group employees excluding the Directors in the table
above (2021: 4.7 times).
During the prior year, as part of the Covid-19 mitigation factors, the directors took a 20% pay reduction from April to August 2020.
Pensions
The Group made pension contributions on behalf of the Executive Directors. The amount is shown in the table above.
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:
Date of contract
Date of appointment
Notice period
Andrew Fryatt
26 March 2020
21 April 2020
Caroline Ackroyd
7 September 2020
22 April 2021
6 months
N/A resigned 14
March 2022
Company with whom
contracted
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
17 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Directors’ interests in shares
The Directors’ interests in the share capital of the Company are set out below:
31 March
Ian Robinson
Philip Hanson
Andrew Fryatt
2022
Number of shares
470,267
109,462
96,969
2021
Number of shares
470,267
109,462
96,969
Other related party transactions
No Director of the Group 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 30. 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.
By Order of the Board
Philip Hanson
Dated: 6 September 2022
18 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Corporate Governance Statement
This report is prepared by the Board and describes how the principles of corporate governance are applied, to the extent applicable
for a company the size of Jaywing plc. The Board has adopted the QCA Corporate Governance Code and considers that the Company
complies with each of the principles of the Code. The following should be noted with regard to the independence of the Company’s
Non-Executive Directors. The Board considers Philip Hanson, a Non-Executive Director, to be independent. The Board notes that Ian
Robinson and Mark Carrington are associated with one of the Company’s major shareholders which could appear to impair their
independence for the purposes of the Code. However, the Board considers that both Ian Robinson and Mark Carrington can bring an
independent view to bear on all matters dealt with by the Board and its various Committees. Independence is a Board judgement.
There are details of how the Group applies the ten principles of the QCA Code on the Group’s investor website.
The Board
At 31 March 2022, the Board comprised Non-Executive Chairman Ian Robinson and Non-Executive Directors Philip Hanson and Mark
Carrington. Andrew Fryatt was appointed to the Board as Chief Executive Officer on 22 April 2020. The Board is responsible to the
shareholders for the proper management of the Group and meets at least six times a year to set the overall direction and strategy of
the Group. All strategic operational and investment decisions are subject to Board approval.
Caroline Ackroyd, Chief Financial Officer, joined the business in September 2020, and was appointed to the Board on 22 April 2021.
Caroline resigned effective on 14 March 2022 and was replaced by an Interim Chief Financial Officer (non-statutory director), Ajay
Handa, on the same date.
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
The Chairman’s role is to provide leadership to the Board, plan and conduct Board meetings effectively, ensure the Board focuses on
its key tasks, and engage the Board in assessing and improving its performance.
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 at least once a year and 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 Remuneration Committee approves the setting of objectives for all 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 Committee did not award any share options or pay rises to Executive Directors during the year. It awarded an annual bonus to
the CEO and CFO as set out in the Directors Remuneration Report in respect of the prior financial year. It has not awarded an annual
bonus in respect of the year to 31 March 2022. Further details of the Group’s policies on remuneration and service contracts are given
in the Directors’ Remuneration report.
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 three
times 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.
The Audit & Risk Committee review the significant estimates, judgements and risks in relation to the annual report and these are
outlined in the Strategic Review. The Committee also reviews the risks outlined in the Principal Risks and Uncertainties and
challenges the Executive Directors on the controls and processes in place to manage these. The effectiveness of the external
audit process has been assessed through discussions with both management and the auditors, and it is proposed that Grant
Thornton be reappointed as external auditor.
Nomination Committee
The Nomination Committee comprises Philip Hanson (Chair), Ian Robinson and Mark Carrington. It is responsible for nominating to
the Board candidates for appointment as Directors, having regard for the balance and structure of the Board. The committee meets
at least once a year. 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.
19 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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.
Attendance at Board and Committee meetings
The Directors attended the following Board and Committee meetings during the year ended 31 March 2022:
Total meetings held
Ian Robinson
Philip Hanson
Mark Carrington
Andrew Fryatt
Caroline Ackroyd
Board
12
Remuneration
4
Audit & Risk
3
Nomination
2
12
12
12
12
9
4
4
4
-
-
3
3
3
3
2
2
2
2
-
-
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. At the
Company’s AGM shareholders are given the opportunity to question 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
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 importance of social, environmental and ethical matters and it endeavours to take into account the
interests of the Group’s stakeholders, including its investors, employees, clients, 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 Executive Team 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
Andrew Fryatt
Dated: 6 September 2022
20 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Directors’ Responsibilities Statement
The Directors are responsible for preparing the Directors’ Report, the Strategic Report, Directors Renumeration 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 must prepare
the financial statements in accordance with UK-adopted international accounting standards. 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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable international financial reporting standards in conformity with UK-adopted international accounting
standards 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 and Directors Renumeration report 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.
To the best of our knowledge:
(cid:120)
(cid:120)
the group financial statements, prepared in accordance with UK-adopted international accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the
consolidation taken as a whole; and
the Strategic Report and Directors’ Report include a fair review of the development and performance of the business and the
position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
By Order of the Board
Andrew Fryatt
Dated: 6 September 2022
21 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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 2022, which comprise the Consolidated statement of comprehensive
income, the Consolidated balance sheet, the Consolidated cash flow statement, the Consolidated statement of
changes in equity, and notes to the consolidated financial statements, including a summary of significant
accounting policies, the Company profit and loss account, the Company balance sheet, the Company
statement of changes in equity and the notes to the Parent company 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 UK-adopted international accounting
standards. 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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 2022 and of the Group’s and the Parent company’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
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.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s and the Parent company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the
date of our report. However, future events or conditions may cause the Group or the Parent company to cease to continue as a
going concern.
A description of our evaluation of management’s assessment of the ability to continue to adopt the going concern basis of
accounting, and the key observations arising with respect to that evaluation is included in the Key Audit Matters section of our
report.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the Parent company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
The responsibilities of the directors with respect to going concern are described in the ‘Responsibilities of directors for the
financial statements’ section of this report.
22 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Our approach to the audit
Materiality
Key audit
matters
Scoping
Overview of our audit approach
Overall materiality:
Group: £191,000, which represents approximately 0.625% of the
Group’s revenue.
Parent company: £90,400, which represents approximately 0.25% of
the Parent company’s total assets, capped at its component
materiality, which is a percentage of Group materiality.
Key audit matters in respect of the Group were identified as:
Revenue recognition (same as the previous year);
(cid:120)
(cid:120)
(cid:120)
Impairment of goodwill and other non-current assets (same as the
previous year); and
Going concern (same as the previous year).
A key audit matter in respect of the Parent company was identified as:
(cid:120)
Impairment of investments in subsidiaries (same as the previous
year).
Our auditor’s report for the year ended 31 March 2021 included no
key audit matters that have not been reported as key audit matters in
our current year’s report.
A full scope audit was performed on the financial statements of the
Parent company and on the financial information of two components
that were determined to be significant (Jaywing UK Limited and
Jaywing Pty Limited (formerly Massive Group PTY Limited)).
An audit of one or more classes of transactions, account balances or
disclosures was performed on one component (Frank Digital PTY
Limited) within the Group.
A specified audit procedure approach was adopted for five
components not considered to be significant but included balances or
transactions which were material to the Group opinion.
The components where we performed full or specified audit
procedures accounted for 100% of the Group’s revenue and 100% of
the Group’s loss before tax. This approach differs to the prior year
approach and is detailed in the section, ‘Changes in approach from
previous period’.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance
audit of the financial statements of the current
and include the most significant assessed risks of
misstatement (whether or not due to fraud) that we
These matters included those that had the greatest
the overall audit strategy; the allocation of
in the audit; and directing the efforts of the
engagement team. These matters were addressed
context of our audit of the financial statements as a
and in forming our opinion thereon, and we do not
separate opinion on these matters.
Description
Audit
reponse
KAM
Disclosures
Our results
in our
period
material
identified.
effect on:
resources
in the
whole,
provide a
23 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
High
Potential
financial
statement
impact
IFRS 16 balances
Borro
Borrowings
ages and
Wages and
salaries
Impairment of goodwill and
Impairment of goodwill and
Impairment of investments in
other non-current assets
other non-current assets
subsidiaries*
Going
concern
Revenue
Revenue
recognition
recognition
Management
overri
override of controls
Intangible assets (including
purchased goodwill)
p
g
Trade
Trade
Trade
receivables
receiva
receiva
receivabl
les
Bank k a
Bank and cash
k annd cash
Trade
Deferred
consideration
Contract assets and
sets and
ract ass
liabilities
ties
* Relates to Parent company risk
nt company risk
payables
Low
Low
Key audit
matter
Extent of management judgement
High
Significant risk
Significant risk
Other risk
How our scope addressed the matter – Group
In responding to the key audit matter, we performed
the following audit procedures:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
assessed whether the revenue recognition policy is
in accordance with IFRS 15;
selected a sample of revenue contracts to
recalculate the revenue recognition of these
contracts in line with IFRS 15, including evaluating
each of the 5 steps of revenue recognition,
recalculation of any contract asset / liabilities in
relation to the transaction and agreeing to
supporting documentation for each;
selected a sample of contract asset / liability
balances and agreed these to supporting
documentation to ensure revenue has been
recognised appropriately;
performed analytical procedures, including trend
and ratio analysis comparing results to prior year;
assessed manual journal entries to revenue to
identify potentially unusual postings; and
tested revenue recognised around the year end to
confirm that it is recorded in the correct year
through the audit of contract assets and liabilities.
Key Audit Matter – Group
Revenue recognition
We identified revenue recognition as one of the most
significant assessed risks of material misstatement
due to fraud and error.
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 presumption that there are risks of fraud in revenue
recognition, which could result in material
misstatements.
The Group enters into a high volume of transactions
and some contracts are entered into which span the
31 March 2022 year end. The contracts across all
revenue streams have varying terms and degrees of
complexity.
There is a risk that the deferral and recognition of
revenues does not match the underlying terms of
customer contracts, in particular the period over which
the performance obligations are met or is not in
accordance with the requirements of International
Financial Reporting Standard (IFRS) 15 ‘Revenue
from Contracts with Customers’ and the 5 steps of
revenue recognition. There is also a risk that revenue
relates to fictitious transactions and therefore did not
occur.
We have pinpointed the significant risk of fraud in
revenue recognition to the occurrence of ‘open, more-
complex’ contracts at year end, within Projects and
Retainers. These are open contracts which are not
yet complete and include more judgement around the
amount of revenue to recognise and potential for
misstatement due to fraud and error. The ’less
complex’ contracts are typically closed at the year end
and require less judgement with revenue being
24 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Key Audit Matter – Group
How our scope addressed the matter – Group
recognised on a straight line basis over the contract
term.
Closed contracts indicate that the performance
obligations have been satisfied and there is less
judgement required.
We have not identified a significant risk within the
Licences or Consultancy streams due to these
streams being less complex and of a lesser
significance to the Group’s results.
Revenue recognition is susceptible to management
bias which heightens this risk.
Relevant disclosures in the Annual Report and
Accounts 2022
(cid:120)
(cid:120)
(cid:120)
Financial statements: Principal Accounting Policies
Financial statements: Note 1 to the consolidated financial
statements, Segmental analysis
Financial statements: Note 17 to the consolidated
financial statements, Contract Assets and Liabilities
Impairment of goodwill and other non-current
assets
We identified impairment of goodwill and other non-
current assets as one of the most significant
assessed risks of material misstatement due to error.
The carrying value of goodwill at 31 March 2022 was
£21.7 million after management’s adjustment for
impairment of £6.1 million (2021: £27.6 million). Based
on the current trading conditions in the environment
within which the Group operates, including Covid-19
and the economic impact on the sector, we have
identified a significant risk in relation to the impairment
of goodwill and other non-current assets, pinpointed to
the UK CGU.
Management performs an impairment review on an
annual basis using discounted cash flows on a value
in use basis in line with the requirements of IAS 36 for
Goodwill and intangible assets with an indefinite life.
This year’s review has identified a £6.1m impairment
which management have posted against goodwill.
The key judgements made by management in
assessing goodwill and other non-current assets for
impairment include the growth and discount rates
applied in the discounted cash flow calculations, due
to the sensitivity of these assumptions to changes,
and the identification of cash generating units
(CGUs).
Our results
Based on our audit work, we did not identify any
material misstatements in revenue recognition, and
we concluded that revenue was recognised in
accordance with the Group’s accounting policy and
IFRS 15.
In responding to the key audit matter, we performed
the following audit procedures:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
assessed whether the accounting policy for the
impairment of intangible assets and goodwill is in
accordance with IAS 36 ‘Impairment of Assets’, and
whether the accounting policy had been applied
consistently through our assessment of the
impairment model;
assessed the appropriateness of the CGUs
identified and the allocation of assets and
cashflows to these CGUs;
assessed the integrity of the impairment models by
testing the mechanical and mathematical accuracy;
obtained an understanding of the process used by
management to determine the discount rates,
including understanding of management’s expert’s
work, and used an auditor’s internal expert to
evaluate them against their expectations and the
industry norms;
challenged the key assumptions applied in
preparing the cash flow forecasts, including
revenue and cost assumptions, discount rate and
an assessment of historical forecasts and actual
performance to assess management’s historical
forecasting accuracy;
performed sensitivity analysis on the impairment
assessment to understand the sensitivity to the
model which would cause a further impairment;
considered the remaining balances for goodwill and
other intangibles, after management’s impairment
charges; and
assessed the adequacy of the disclosures included
within the financial statements for compliance with
IAS 36.
Relevant disclosures in the Annual Report and
Accounts 2022
(cid:120)
Financial statements: Principal Accounting Policies
Based on our audit work, we concluded that the
impairment of goodwill and other non-current assets
has been performed appropriately in accordance with
IAS 36 and concur with management’s view that an
impairment of £6.1m to goodwill is required and that
25 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Key Audit Matter – Group
(cid:120)
Financial statements: Notes 14 and 15 to the
consolidated financial statements, Goodwill and
Other intangible assets respectively.
How our scope addressed the matter – Group
no further impairment to other non-current assets is
required.
The disclosures made in notes 14 and 15 to the
consolidated financial statements appropriately
describe this matter.
Going concern
We identified going concern as one of the most
significant assessed risks of material misstatement
due to fraud and error.
Covid-19 is one of the most significant economic
events for the UK, and at the date of this report there
continues to be uncertainty as to the ultimate impact
of these events on the Group and the Parent
company.
The Group has historically suffered losses and is also
loss making for the current financial year (ended 31
March 2022).
In undertaking their assessment of going concern for
the Group and the Parent company, the directors
considered the impact of Covid-19 in their forecast
future performance of the Group and the Parent
company and the anticipated cash flows as follows:
(cid:120)
(cid:120)
(cid:120)
the current financing available to the Group and
associated debt covenants;
cost saving actions that the Group have
implemented as a result of the Covid-19 pandemic
and restructuring; and
the potential impact on revenues generated from
customers based on a number of scenarios.
The directors have concluded, based on the various
scenarios developed, that the Group and the Parent
company have sufficient resources available to meet
their liabilities as they fall due for at least 12 months
following the date of approval of the financial
statements, and have concluded that there are no
material uncertainties that may cast significant doubt
over the Group’s and the Parent company’s ability to
continue as a going concern.
As a result of the judgement required by management
to conclude whether there is a material uncertainty
related to going concern, we have identified going
concern as a key audit matter.
Relevant disclosures in the Annual Report and
Accounts 2022
(cid:120)
Financial statements (Group): Principal accounting
policies, Going concern; and Financial statements
(Parent company) Note 1 ‘Accounting policies’ to
the Parent company financial statements, Going
concern.
Key Audit Matter – Parent company
In responding to the key audit matter, we performed
the following audit procedures:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
obtained management’s forecasts covering the
period from 1 April 2022 to 30 September 2023,
including their assessment of the possible future
impact of Covid-19 and assessed how these
forecasts were compiled, including assessing their
appropriateness by challenging the reasonableness
of the underlying assumptions around the discount
rate and growth rate, and considering whether the
assumptions are consistent with our understanding
of the business;
obtained post year end management accounts and
assessed them against the forecasts used in the
impairment review for the same period to assess
any potential impact over the forecast period of the
variances identified;
assessed the accuracy of management’s past
forecasting by comparing management’s forecasts
for the prior year, and the preceding year, to the
actual results for these periods and considering the
impact on the cash flow forecast;
assessed management’s cash and available
financing facilities as well as the continued support
of lenders;
corroborated any mitigating actions taken by
management to support the going concern
assumption to relevant documentation and
evaluation of their application in the forecasts for
accuracy;
obtained management’s reverse stress test and
assessed the likelihood of the scenario and impact
on the Group and Parent company to determine the
reduction in revenue and consequently earnings
after tax that would lead to elimination of the
headroom in their cash flow forecasts; and
assessed the adequacy of the going concern
disclosures included within the financial statements.
Our results
Based on our audit work, we have nothing to report
in addition to that stated in the ‘Conclusions relating
to going concern’ section of our report.
26 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Key Audit Matter – Group
Impairment of investments in subsidiaries
We identified impairment of investments in subsidiaries
as one of the most significant assessed risks of material
misstatement due to error.
The carrying value of the Parent company’s
investments in subsidiaries at 31 March 2022 was
£26.2million after management’s adjustment for
impairment of £9.2 million (2021: £34.7 million). Based
on the current trading conditions in the environment
within which the Group operates, including Covid-19and
the economic impact on the sector, we have identified
an elevated risk in relation to the impairment of
investments in subsidiaries.
Management performs an impairment review on an
annual basis using discounted cash flows on a value in
use basis.
The key judgements made by management in
assessing the carrying value of investments in
subsidiaries for impairment include the growth and
discount rates applied in the discounted cash flow
calculations, due to the sensitivity of these assumptions
to changes.
Relevant disclosures in the Annual Report and
Accounts 2022
(cid:120)
Financial statements: Note 12 to the Parent
company financial statements, Investments
How our scope addressed the matter – Group
In responding to the key audit matter, we performed
the following audit procedures:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
assessed whether the accounting policy for
investments in subsidiaries is in accordance with
IAS 27 ‘Separate Financial Statements’ and IAS 36
‘Impairment of Assets’, and whether the accounting
policy had been applied consistently;
assessed the position and performance of each
subsidiary undertaking to assess whether there
were any indications of impairment;
assessed the integrity of the impairment models by
testing its mathematical and mechanical accuracy;
understanding the process used by management to
determine the discount rates, including
understanding the work of management’s expert,
and using auditor’s expert to evaluate them against
their expectations and the industry norms;
assessed the appropriateness of any changes to
assumptions since the prior year; and
challenged the cash flow forecasts with reference to
historical forecasts and actual performance to
support any significant expected future changes to
the business and ensure that cash can be
transferred through the Group: and
considered the remaining balances for investments
in subsidiaries, after management’s impairment
charges.
Our results
Based on our audit work, we concluded that the
impairment of investments has been accounted for in
accordance with IAS 27 and IAS 36 and that that an
impairment of £9.2m against the investments balance
is required for the year. The disclosures made in note
12 to the Parent company financial statements
appropriately describe this matter.
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion
in the auditor’s report.
Materiality was determined as follows:
Materiality measure
Materiality for
financial statements
as a whole
Group
Parent company
We define materiality as the magnitude of misstatement in the financial statements
that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of these financial statements. We use materiality in
determining the nature, timing and extent of our audit work.
Materiality threshold
£191,000, which is approximately 0.625% of
the Group’s revenue.
£90,400, which is approximately 0.25% of the
Parent company’s total assets, capped at its
component materiality, which is a percentage
of Group materiality.
Significant judgements
made by auditor in
In determining materiality, we made the
following significant judgements:
In determining materiality, we made the
following significant judgements:
27 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Materiality measure
determining the
materiality
Group
Parent company
(cid:120) Revenue is a key performance
indicator for management as
identified within the Strategic Report
and is the focus for further growth of
the Group. Normalised earnings have
previously been used, however
earnings in the current and previous
year are break even and have been
volatile. We therefore considered
revenue to be the most appropriate
benchmark for the Group.
(cid:120)
(cid:120)
The Parent company is a holding
company which has no trade, so we
therefore considered total assets to
be the most appropriate benchmark
for the Parent company; and
The percentage applied of
approximately 0.25% was selected
based on the risk profile of the Parent
company as a component within an
AIM listed Group.
Materiality for the current year is higher
than the level that we determined for
the year ended 31 March 2021 to reflect
the increase in Group materiality for the
current year and the capping referred to
above.
(cid:120) We determined a percentage of
approximately 0.625% to be
appropriate based on the Group
being listed on AIM and the
performance of the Group revenue in
the year has been strong in
comparison to previous years.
Materiality for the current year is higher
than the level that we determined for
the year ended 31 March 2021 to reflect
the increase in the performance of the
Group during the year and the change
in the benchmark and measurement
percentage being applied from 3% of
the Group’s normalised loss before tax
for the prior year to a revenue based
benchmark for the current year, as
described above, which was higher.
Performance
materiality used to
drive the extent of
our testing
We set performance materiality at an amount less than materiality for the financial
statements as a whole to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole.
Performance materiality
threshold
£143,300, which is 75% of financial
statement materiality.
£67,800, which is 75% of financial statement
materiality.
Significant judgements
made by auditor in
determining the
performance materiality
In determining performance materiality,
we made the following significant
judgements:
In determining performance materiality,
we made the following significant
judgements:
(cid:120)
(cid:120)
the effective control environment of
the Group; and
our experience auditing the financial
statements of the Group, including
the limited number and quantum of
misstatements identified in previous
audits.
Therefore, we considered maintaining
performance materiality at the higher
end of our scale to be appropriate.
(cid:120)
(cid:120)
the effective control environment of
the Parent company; and
very few misstatements have been
identified in previous audits.
Therefore, we considered maintaining
performance materiality at the higher
end of our scale to be appropriate.
Specific materiality
We determine specific materiality for one or more particular classes of transactions,
account balances or disclosures for which misstatements of lesser amounts than
materiality for the financial statements as a whole could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial
statements.
Specific materiality
We determined a lower level of specific
materiality for the following areas:
We determined a lower level of specific
materiality for the following areas:
(cid:120) Directors’ remuneration; and
(cid:120) Directors’ remuneration; and
(cid:120) Related party transactions.
(cid:120) Related party transactions.
28 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Materiality measure
Communication of
misstatements to the
Audit & Risk
Committee
Group
Parent company
We determine a threshold for reporting unadjusted differences to the Audit & Risk
Committee.
Threshold for
communication
£9,600 and misstatements below that
threshold that, in our view, warrant
reporting on qualitative grounds.
£4,500 and misstatements below that
threshold that, in our view, warrant
reporting on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality – Group
Overall materiality – Parent company
Revenue
£30,168,000
PM
£143,300
75%
FSM
£191,000
0.625%
Total assets
£37,404,000
PM
£67,800
75%
FSM
£90,400
0.25%
TFPUM
£47,700, 25%
TFPUM
£22,600, 25%
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected
misstatements
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the Group’s and the Parent company’s business and in
particular matters related to:
Understanding the Group, its components, and their environments, including Group-wide controls
(cid:120) We obtained an understanding of the Group and its environment, including Group-wide controls, and assessed the risks of
material misstatement at the Group level;
(cid:120) We assessed the design effectiveness of controls around significant classes of transactions through the performance of
walkthroughs;
(cid:120) We obtained an understanding of the individual components, including component specific controls, and assessed the risks
of material misstatement at the Group level. We held planning discussions with the Group’s management team; and
(cid:120) We performed walkthroughs of key areas of focus, including significant risks, in order to confirm our understanding of the
control environment across the Group.
Identifying significant components
(cid:120) We identified a total of nine components, of which three were identified as significant based on their individual financial
significance to the Group. The measures used to determine significance were based on the Group’s revenue, the Group’s
loss before tax and the Group’s total assets.
Type of work to be performed on financial information of Parent and other components (including how it addressed the key
audit matters)
(cid:120) We performed a full-scope audit of the financial statements of the Parent company, and of the financial information of two
subsidiary undertakings identified as significant components which resulted in the audit of the financial information of the
29 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 component using component materiality (Jaywing UK Limited and Jaywing Pty Limited (formerly Massive Group PTY
Limited)).
(cid:120) We performed a full scope audit of the financial statements of the Parent company. We identified, impairment of
investments in subsidiaries as key audit matters and the work at we performed to address this is as described in the key
audit matters table above.
(cid:120) We performed procedures on the impairment of Goodwill and other non-current assets and Going Concern at a group level
as a key audit matter and the work at we performed to address this is as described in the key audit matters table above.
(cid:120) We identified two significant components (Jaywing UK Limited and Jaywing Pty Limited (formerly Massive Group PTY
Limited)) within the Group and performed a full scope audit on the financial information of each, including work on revenue
recognition based on the procedures identified in the Key audit matters above. An additional component (Frank Digital Pty
Limited) was identified for audit of one or more classes of transactions, account balances or disclosures as it was likely to
include significant risks which resulted in the overall coverage of the revenue balance which was included within the
components selected for testing of 100%.
(cid:120)
The remaining components were identified for specified audit procedures on the financial information of the component.
Communications with component auditors
(cid:120) All audit work was performed by overseas members of the Grant Thornton International Limited network of independent
firms. We issued Group instructions to one component auditor in relation to performing one full-scope audit and one
specific-scope audit. The Group audit team were involved in the risk assessments of those components and reviewed the
audit file for the significant and other risk areas.
Changes in approach from previous period
(cid:120) Our audit scope has changed since the prior year following the restructure of the Group and Frank Digital in Australia has
been removed from the full-scope audit owing to its financial insignificance in context of the Group as a whole and is now
replaced with a specific-scope audit.
(cid:120) During the year, the trade and assets of the UK operations were transferred to one component and therefore our audit
procedures on previous trading components has been reduced to specified audit procedures.
(cid:120)
There has been no overall reduction in percentage of balances which were subject to audit.
Audit approach
Full-scope audit
Specific-scope audit
Specified audit procedures
No. of
components
3
1
5
% coverage
total assets
100
0
0
% coverage
revenue
95
5
0
% coverage
LBT
15
85
0
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.
30 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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:
(cid:120)
(cid:120)
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.
Matter 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:
(cid:120)
(cid:120)
(cid:120)
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
(cid:120) 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, 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 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.
31 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Explanation as to what extent the audit was considered capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Owing to
the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may
not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
(cid:120) We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or
whether they had any knowledge of actual, suspected or alleged fraud. We corroborated our enquiries through our analysis
of board minutes.
(cid:120) We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and the Parent
company and determined that the most significant are UK-adopted international accounting standards (for the Group),
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (for the Parent company) and the Companies Act
2006;
(cid:120)
In addition, we concluded that there are certain significant laws and regulations that may have an effect on the
determination of the amounts and disclosures in the financial statements and those laws and regulations relating to health
and safety, employee matters, environmental, and bribery and corruption practices.
(cid:120) We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements from our general commercial and sector experience, through discussion with the directors and the Audit & Risk
Committee, and from inspection of the Group board minutes and legal and regulatory correspondence. We discussed the
policies and procedures regarding compliance with laws and regulations across the Group with the directors and the Audit
& Risk Committee, including procedures such as the engagement team reviewing meeting minutes to identify any non-
compliance with laws and regulations
(cid:120) We assessed the susceptibility of Jaywing plc’s consolidated financial statements to material misstatement, including how
fraud might occur by meeting with management from relevant parts of the business to understand where management
considered there was a susceptibility to fraud. We also considered performance targets and their influence on efforts made
by management to manage earnings or influence the perceptions of analysts
(cid:120) Audit procedures performed by the engagement team included:
-
-
-
-
-
-
-
evaluation of the design effectiveness and testing the operating effectiveness of controls that management has in
place to prevent and detect fraud;
journal entry testing, with a focus on material manual journals, including those with unusual account combinations and
those posted directly to the consolidation that increased revenue or that reclassified costs from the income statement
to the balance sheet;
utilising a valuation specialist to perform stress testing on management’s impairment calculation;
challenging assumptions and judgements made by management in its significant accounting estimates;
testing the completeness of the Group’s related party transactions through information obtained at the Parent and
component entities and testing that these transactions had a valid business purpose;
assessing matters reported through the Group’s whistleblowing programme and the results of management’s
evaluation of such matters; and
assessing the compliance of disclosures in the annual report and accounts with applicable financial reporting
requirements.
(cid:120)
These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud
or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting
from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from
error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further
removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements,
the less likely we would become aware of it.
32 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 (cid:120) We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might
occur, by evaluating management’s incentives and opportunities for manipulation of the financial statements. This included
the evaluation of the risk of management override of controls. We determined that the principal risks were in relation to:
(cid:16)
(cid:16)
journal entries that increased revenues or that reclassified costs from the income statement to the balance sheet;
potential management bias in determining accounting estimates, especially in relation to the calculation of impairment
of intangible assets; and
(cid:16)
transactions with related parties.
(cid:120)
The engagement partner’s assessment of the appropriateness of the collective competence and capabilities of the
engagement team included consideration of the engagement team’s:
-
-
-
understanding of, and practical experience with, audit engagements of a similar nature and complexity, through
appropriate training and participation;
knowledge of the industry in which the Group and Parent company operate; and
understanding of the legal and regulatory frameworks applicable to the Group and the Parent company.
(cid:120) Relevant laws and regulations and potential fraud risks were communicated to all engagement team members. We
remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
(cid:120) We enquired of the component auditor to request details of any instances of non-compliance with laws and regulations that
could give rise to a material misstatement of the Group financial statements.
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
6 September 2022
33 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Consolidated Statement of Comprehensive Income
For the year ended 31 March
Gross revenue
Direct Costs
Revenue
Other operating income
Operating expenses*
Operating (Loss)
Finance costs
Loss before tax
Tax (expense) / credit
Loss for the year
Note
1
2
3
4
5
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
27
Total comprehensive loss for the period
Total comprehensive loss is attributable to:
Non-controlling interests
Owners of the Parent
Basic and diluted loss per share
Loss per share
26
6
2022
£’000
30,168
(6,844)
23,324
Restated*
2021
£’000
25,957
(5,792)
20,165
40
793
(29,450)
(21,998)
(6,086)
(474)
(6,560)
123
(6,437)
12
(6,449)
(6,437)
279
(6,158)
12
(6,170)
(6,158)
(1,040)
(451)
(1,491)
119
(1,372)
71
(1,443)
(1,372)
(6)
(1,378)
71
(1,449)
(1,378)
(6.90p)
(1.54p)
The accompanying Notes form part of these Consolidated Financial Statements.
*The comparative information has been restated due to fair value adjustments misstated in the prior period as discussed in note
33.
34 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Consolidated Balance Sheet
As at 31 March
Non-current assets
Property, plant and equipment
Goodwill*
Deferred tax asset*
Other intangible assets
Current assets
Trade and other receivables*
Contract assets
Current tax asset
Cash and cash equivalents
Total assets
Current liabilities
Borrowings
Trade and other payables
Contract Liabilities
Current lease liabilities
Current tax liabilities
Provisions
Non-current liabilities
Non-current lease liabilities
Deferred tax liabilities
Total liabilities
Net assets
Equity
Equity attributable to owners of the parent
Share capital
Share premium
Capital redemption reserve
Treasury shares
Share option reserve
Foreign currency translation reserve
Retained earnings*
Equity attributable to owners of the parent
Non-controlling interest
Total equity
Note
12
14
20
15
16
17
18
18
19
17
13
19
13
20
21
22
24
23
25
27
28
26
2022
£’000
2,173
21,705
644
69
24,591
6,415
453
32
714
7,614
32,205
8,754
7,931
1,408
395
-
42
Restated*
2021
£’000
2,060
27,581
586
799
31,026
6,056
619
46
752
7,473
38,499
8,338
8,065
1,163
666
194
42
18,530
18,468
1,448
-
1,448
19,978
877
113
990
19,458
12,227
19,041
34,992
10,088
125
(25)
-
118
(33,071)
12,227
-
12,227
34,992
10,088
125
(25)
-
(161)
(26,332)
18,687
354
19,041
*The comparative information has been restated due to fair value adjustments misstated in the prior period as discussed in note
33.
These Financial Statements were approved by the Board of Directors on 6 September 2022 and were signed on its behalf by:
Andrew Fryatt
Director
Company number: 05935923
The accompanying Notes form part of these Consolidated Financial Statements.
35 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Consolidated Cash Flow Statement
For the year ended 31 March
Cash flow from operating activities
Loss after tax*
Adjustments for:
Impairment of Goodwill
Depreciation of property, plant & equipment
Depreciation and impairment of right of use assets
Amortisation of intangibles
Impairment of other intangibles
Financial costs
Taxation expense / (credit)
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 paid
Tax paid
Net cash flow from operating activities
Cash flow from investing activities
Payment of deferred consideration
Acquisition of intangible assets
Acquisition of property, plant and equipment
Net cash outflow from investing activities
Cash flow from financing activities
Acquisition of non-controlling interest*
Repayment of Lease Liabilities (IFRS16)
Net cash (outflow) from financing activities
Net 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
Note
2022
£’000
Restated*
2021
£’000
(6,437)
(1,372)
3
3
3
3
4
5
12
6,131
327
752
730
-
474
(123)
1,854
(168)
(99)
1,587
(58)
(240)
1,289
(442)
-
(163)
(605)
-
(722)
(722)
(38)
752
714
-
259
666
1,118
690
451
(119)
1,693
(901)
1,466
2,258
(74)
(376)
1,808
(377)
(3)
(98)
(478)
(1,925)
(649)
(2,574)
(1,244)
1,996
752
714
752
The accompanying Notes form part of these Consolidated Financial Statements.
*The comparative information has been restated due to fair value adjustments misstated in the prior period and restatement of
acquisition of non-controlling interest in 2021 reclassified from investing activities to financing activities as discussed in note 33.
36 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Consolidated Statement of Changes in Equity
Share
Capital
Share
Premium
Account
Capital
Redemption
Reserve
Treasury
Shares
Share
Option
Reserve
Foreign
Currency
Translation
Reserve
Retained
Earnings
Equity
attributable
to parent
Non-
controlling
Interest
Total
equity
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Balance at 31 March 2020
34,992
10,088
125
(25)
696
(155)
(24,868)
20,853
1,339
22,192
Acquisition of subsidiaries
NCI*
Transactions with owners
Profit/(loss) for the period*
Transfer in relation to lapsed
share options*
Retranslation of foreign
currency
Total comprehensive income
for the period
Balance at 31 March 2021
(as previously stated)
Prior year adjustment (see
note 33)
Balance at 31 March 2021
(as restated)
Acquisition of subsidiaries
NCI*
Transactions with owners
Profit/(loss) for the period
Retranslation of foreign
currency
Total comprehensive income
for the period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,992
10,088
125
(25)
-
-
-
-
34,992
10,088
125
(25)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 31 March 2022
34,992
10,088
125
(25)
-
-
-
(696)
-
(696)
-
-
-
-
-
-
-
-
-
-
-
-
-
(6)
(6)
(717)
(717)
(717)
(1,056)
(1,773)
(717)
(1,056)
(1,773)
(1,443)
(1,443)
71
(1,372)
696
-
-
(6)
-
-
-
(6)
(1,464)
(2,166)
(985)
(3,151)
(161)
(24,124)
20,895
354
21,249
-
(2,208)
(2,208)
-
(2,208)
(161)
(26,332)
18,687
354
19,041
-
-
-
(290)
(290)
(290)
(290)
(6,449)
(6,449)
279
-
279
(366)
(366)
12
-
(656)
(656)
(6,437)
279
279
(6,739)
(6,460)
(354)
(6,814)
118
(33,071)
12,227
-
12,227
The accompanying Notes form part of these Consolidated Financial Statements.
*The comparative information has been restated due to fair value adjustments misstated in the prior period as discussed in note
33.
37 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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 UK Adopted
International accounting standards. 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.
Going concern
The Group financial statements have been prepared on a going concern basis in accordance with UK Adopted International
accounting standards. In coming to their conclusion, the Directors have considered the Group’s profit and cash flow forecasts
for period of at least 12 months from the date these financial statements were approved.
In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether
the Group can continue in operational existence for the foreseeable future.
In addition to the normal process of preparing forecasts for the Group, the Board has also considered downside risks and the
potential impact of the economic environment on the cash flows of the Group for a period to 30 September 2024. This has been
done by looking at various scenarios within the forecasts for the potential effect of changes in the market during the forecast
period.
In considering their position the Directors have also had regard to letters of support in respect of the secured debt which have
received from each of the holders of that debt confirming that the debt will not be called in and support will be provided for the
foreseeable future. Details of this debt are contained in Note 18 and Note 30.
The Group financial statements do not include the adjustments that would result if the Group were unable to continue as a
going concern. The Directors have a reasonable expectation that the Group has adequate resources to continue in existence
for the foreseeable future and have concluded it is appropriate to adopt the going concern basis of accounting in the
preparation of the financial statements.
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
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)
To determine whether to recognise revenue, the Group follows a 5-step process:
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
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 in accordance with IFRS15.35 (c).
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and
reports these on the face of the consolidated balance sheet. Similarly, if the Group satisfies a performance obligation
38 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 before it receives the consideration, the Group recognises a receivable in its consolidated balance sheet as a contract
asset.
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, such
as Pay Per Click (PPC) and Search Engine Optimisation (SEO) management. These will have agreed KPIs and are
separately identifiable, hence are identified as separate performance obligations. These services will be set out in the
contract with revenue amounts associated and the revenue streams will be recognised separately. Most fees are fixed but
some fees are variable each month and are based on a ratchet scale calculation.
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 that covers all work performed by Jaywing and will then issue a brief or work
order 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. Due to the high degree of interdependence between the various
elements of these projects, they are accounted for as a single performance obligation.
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,
hence this does not create a separate performance obligation.
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. There may
be various elements to the work quoted, however due to the high degree of interdependence between these, they are
accounted for as a single performance obligation. 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, hence this does not create a
separate performance obligation.
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. Therefore, they are accounted for
together as a single performance obligation. The license price is set out in the contract.
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.
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.
39 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Gross revenue and direct costs – alternative performance measures
We recognise gross revenue and revenue in the financial statements. Gross revenue and direct costs represent non-IFRS 15
measures and are given to disclose where the group act as agent to certain customers, based on the level of control which the
group holds over the services provided. Direct costs are recognised in line with the gross revenue recognised. This information
is given as it is considered useful to the users of the financial statements.
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 in respect of property held under leases. The estimated costs are
capitalised within leasehold improvements and depreciated over the remaining lease term based on the present value of
expected future cash flows.
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:
(cid:131) 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
(cid:131) 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.
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
Buildings
-
-
-
over period of lease
3 - 5 years
over period of lease
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 that can
be sold separately, or that 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.
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.
40 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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
In the previous year the put/call option in Frank Digital PTY had been valued by an independent assessor and was recognised
with both a service and non-service element in the accounts. The non-service element was fully recognised as at the date of
acquisition and the fair value reviewed annually. The service element was 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. In the year
the put/call option has been executed and settled.
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 32).
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in profit or loss as incurred.
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.
Leases
The Company reports using IFRS 16, whereby the Company now recognises a lease liability and a right of use asset.
The Group leases four offices and printers. The Group has elected not to separate lease and non-lease components and
instead accounts for these as a single lease component. The lease agreements do not impose any covenants other than the
security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing
purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
• amounts expected to be payable by the group under residual value guarantees;
• the exercise price of a purchase option if the group is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the individual
41 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right of use asset in a similar
economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group, where possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received.
If the Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability until they take effect, then when adjustments to lease payments based on an index or rate take
effect, the lease liability is reassessed and adjusted against the right of use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right of use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• restoration costs.
Right of use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line
basis. If the Group is reasonably certain to exercise a purchase option, the right of use asset is depreciated over the underlying
asset’s useful life.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
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.
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:
(cid:120)
(cid:120)
(cid:120)
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.
42 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Trade and other receivables
Trade and other receivables are initially recognised at fair value plus transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for
impairment.
IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ‘expected
credit loss (ECL) 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 liabilities
Interest-bearing borrowings
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 reported its operations based on location of the business (United Kingdom & Australia) as well as three client-
facing segments which sit within the operating segments: Retail, FMCG and Financial & Professional Services.
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
Represents the nominal value of the shares purchased by the Company.
Share Option Reserve
Represents the cumulative 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.
Non-controlling interests
The profit or loss attributable to the non-controlling ownership stakes in subsidiary companies is transferred from Retained
Earnings to non-controlling interests each year.
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.
Accounting estimates and judgements
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 32 to the Consolidated Financial Statements.
43 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Accounting estimates
Impairment of goodwill and other intangible assets
The carrying amount of goodwill is £21,705k (2021: £29,789k) and the carrying amount of other intangible assets is £69k
(2021: £799k). 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 14.
Accounting judgements
Recognition of revenue
The Directors consider that they act as a principal in transactions where the Group has control over the goods and services
prior to being transferred to the customer. Where this is via an agency arrangement and the Group does not have full control
over the goods and services, it recognises gross billings as gross revenue, with the direct costs being deducted to present the
reportable revenue figure under IFRS 15. For other income sources, revenue recognition is assessed in line with the five steps
of IFRS.
Recognition of contract assets and liabilities
Contract assets related to the portion of performance obligations already fulfilled by the Group and for which the definitive right
to receive cash was subject to completing further work under the relevant contract. Contract assets are converted into trade
receivables at the point that work delivered to the client is invoiced resulting in the Group’s unconditional right to receive cash.
Contract assets therefore represent a portion of future payments receivable by the Group under existing contracts.
Contract liabilities consist of cash advances received from customers on account of work orders received and the remaining
liabilities relate to the amount of performance obligations still to be fulfilled and for which payment has already been received
from the client.
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.
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 obligations on a reasonable basis with reference to the expected time involved in performing the service and
management’s experience of similar projects.
IFRS 16
Under IFRS 16 the Group is required to make a judgement in determining the discount rate to be used in calculating the
present value of lease payments when recognising the lease liabilities and right of use asset. For the discount rate the Group
has used the lessee’s incremental borrowing rate, being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right of use asset in a similar economic environment with similar
terms, security and conditions. To determine the incremental borrowing rate, the Group, where possible, uses recent third-party
financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third
party financing was received.
The right of use asset is depreciated over the term of the lease. The term has been determined with reference to the lease
agreements and any expected extension based on management’s judgement beyond the end of the lease end date specified in
the lease agreement.
Capitalisation of internally developed software
Distinguishing the research and development phases of a new customised software project and determining whether the
recognition requirements for the capitalisation of development costs are met requires judgement. After capitalisation,
management monitors whether the recognition requirements continue to be met and whether there are any indicators that
capitalised costs may be impaired.
44 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Notes to the Consolidated Financial Statements
1.
Segmental analysis
Information reported to the Group’s Chief Executive (the Chief Operating Decision Maker) for the purposes of resource
allocation and assessment of segment performance is focused on the category of customer for each type of activity.
The Group reported its operations based on location of the business (United Kingdom & Australia).
During the year, no customer accounted for greater than 10% of the Group's revenue (2021: None).
Revenue by Operating Segments
United Kingdom
Australia
All revenue is recognised over time.
Gross revenue in the UK was £24,858k (2021: £21,706k), and in Australia £5,310k (2021: £4,251k).
Revenue by Client Facing Sectors
Analysis is presented on client facing sectors to aid in understanding performance.
Retail
FMCG
Financial & Professional Services
2022
£'000
18,099
5,225
23,324
2021
£'000
15,969
4,196
20,165
2022
£'000
9,625
4,725
8,974
23,324
2021
£'000
7,337
6,317
6,511
20,165
“Retail” includes:
“FMCG” includes:
“Financial & Professional Services ” includes:
Retail, Travel & Leisure, Hospitality, Property & Utilities
Consumer Goods, Industrial, Telecoms, Support Services, Healthcare,
Education, Public Sector & Non-Profit
Financial & Professional Services
Non-current assets by Geographic Markets
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 markets:
United Kingdom
Australia
*See note 33.
Non-current assets are allocated based on their physical location of the component’s operations.
2022
£'000
21,576
3,015
24,591
Restated*
2021
£'000
28224
2,802
31,026
45 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 2. Other operating income
Covid-19 government support
Other income
2022
£'000
40
-
40
2021
£'000
781
12
793
The Group has taken the option to present income received from Government sources in relation to Covid-19 as other operating
income, rather than netted against costs. The Group received funds from the UK Government under the Covid-19 Job Retention
Scheme of £37k (2021: £451k). Under the corresponding scheme in Australia, Cashflow boost and Job Keepers, the Group
received £3k (2021: £330k).
Other income includes amounts received from the administrator of a client for a contractual obligation to perform services on their
behalf. During the year, the Group received no further distribution (2021: £12k). 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
Social Security Costs
Other Pension Costs
Impairment of Goodwill
Depreciation of property, plant & equipment
Depreciation and impairment of right of use assets
Amortisation
Release of deferred consideration
Court legal fees
Restructuring costs
Impairment of other intangible assets
Other operating expenses
Total operating expenses
*See note 33
2022
£'000
14,865
1,724
915
6,131
327
752
730
(882)
774
352
-
3,762
29,450
Restated*
2021
£'000
13,135
1,267
707
-
259
666
1,118
-
-
488
690
3,668
21,998
Impairment of other intangible assets in 2021 relates to the retirement of a brand name as part of the restructuring activities
and the move towards trading only as Jaywing in the UK.
The results included legal expenses of £774k offset by the release of deferred consideration following the successful
conclusion of a court case associated with the 2016 acquisition of Bloom Media (UK) Limited.
4.
Finance costs
Interest expense
Interest on lease liabilities (see note 13)
Fair values finance charge / (credit) on Put / Call option
Total
2022
£'000
416
58
-
474
2021
£'000
403
74
(26)
451
46 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 5.
Tax credit
The tax credit / (charge) is based on the loss for the year and represents:
UK corporation tax at 19% (2021: 19%)
Adjustment in respect of prior period
Total current tax
Deferred tax:
Origination and reversal of timing differences
Total tax charge / (credit)
The tax credit can be explained as follows:
Loss before tax
Tax using the UK corporation tax rate of 19% (2021: 19%)
Effect of:
Recognition of previously unrecognised losses
Goodwill impairment
Non-deductible expenses / credit
Prior year adjustment
Current year credit
*See note 33
6.
Loss per share
Basic loss per share
Diluted loss per share
2022
£'000
48
-
48
(171)
(123)
2022
£’000
(6,560)
(1,246)
(125)
1,164
84
-
(123)
Restated*
2021
£'000
169
55
224
(343)
(119)
2021
£'000
(1,138)
(216)
-
-
42
55
(119)
2022
Pence per
Share
Restated*
2021
Pence per
Share
(6.90p)
(1.54p)
(6.90p)
(1.54p)
Loss per share has been calculated by dividing the loss attributable to shareholders by the weighted average number of
ordinary shares in issue during the year.
The calculations of basic and diluted loss per share are:
Loss for the year attributable to shareholders
Weighted average number of ordinary shares in issue:
Basic and diluted
*See note 33
7. Auditor's remuneration
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
2022
£'000
Restated*
2021
£'000
(6,449)
(1,443)
2022
Number
2021
Number
93,432,217
93,432,217
2022
£'000
45
111
5
30
-
2021
£'000
40
97
4
30
66
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
47 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 basis. In addition to last year’s reported audit figures an amount was agreed and paid to cover over-runs, making the total
payable in relation to the audit £197,000.
8. 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
Defined contribution pension plan costs
Key management compensation
*See note 33.
Further information in respect of Directors is given in the Directors’ Remuneration Report.
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
2022
£’000
1,703
235
1,938
68
2,006
2022
£'000
557
28
15
600
Restated*
2021
£’000
1,429
182
1,611
103
1,714
2021
£'000
276
28
14
318
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 £284,000 (2021: £208,000).
9.
Staff numbers and costs
The average number of persons employed by the Group (including Directors) during the year, analysed by category, was
as follows:
Management and administration
Client Service Staff
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
Total
2022
Number
2021
Number
35
261
296
2022
£'000
14,865
1,724
915
17,504
44
245
289
2021
£'000
13,135
1,267
707
15,109
48 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 10. Employee benefits
The Group had granted share options under the Jaywing plc Performance Share Plan.
The share option schemes terminated in October 2020. Details are as follows:
At start of the year
Lapsed during the year
At end of the year
Exercisable at end of year
2022
2021
Number of
share options
Weighted
average
exercise
price
-
-
-
-
-
-
-
-
Number of
share options
3,301,200
(3,301,200)
-
-
Weighted
average
exercise
price
5.0p
5.0p
5.0p
5.0p
There were no share options outstanding at the year-end.
Credit 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. In the year to March 2022 this was nil (March 2021 credit to the P&L of £696k which was
subsequently restated, see note 33).
11.
Interests in Subsidiaries
The details of subsidiaries held directly by the Group are set out in Note 12 of the plc Parent Company accounts. After the
acquisition of the remaining 25% of Frank Digital PTY in November 2021 and of the remaining 25% of Massive Group Pty in
October 2020, the Group includes no subsidiary (2021: one) with non-controlling interests (NCI):
Name
Frank Digital PTY
Proportion of ownership
interests and voting rights held
by NCI
2021
%
25
2022
%
-
Total comprehensive
income allocated to NCI
2022
£’000
12
12
2021
£’000
71
71
Accumulated NCI
2022
£’000
-
-
2021
£’000
354
354
No dividends were paid to the NCI during the financial years 2022 and 2021.
Jaywing plc acquired the remaining 25% of Frank Digital PTY on 2 November 2021 after the remaining shareholders exercised
their put option. The 25% stake was acquired for $1.2m (£0.7m), the total consideration for the purchase of the 100% interest
was $3.0m (£1.7m). At 31 March 2022 an amount of £0.7m was still outstanding to the original shareholders, this was fully paid
by 31 July 2022.
Jaywing plc acquired the remaining 25% of Massive Group PTY on 21 October 2020 after the remaining shareholders
exercised their put option. The 25% stake was acquired for $4.0m (£2.2m), the total consideration for the purchase of the 100%
interest was $9.6m (£5.4m). At 31 March 2021 an amount of £0.3m was still outstanding to the original shareholders, this was
fully paid by 30 June 2021. See also note 33 re restatement.
49 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 12. Property, plant and equipment
Cost
At 31 March 2020
Additions
Disposals
At 31 March 2021
Additions
Right of use asset additions
Disposals
At 31 March 2022
Depreciation
At 31 March 2020
Depreciation charge for the year
Depreciation of right of use asset
Depreciation on disposals
At 31 March 2021
Depreciation charge for the year
Impairment of right of use asset
Depreciation of right of use asset
Depreciation on disposals
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
At 31 March 2020
Buildings
£'000
2,673
-
-
2,673
-
985
-
3,658
640
-
640
-
1,280
-
44
674
-
1,998
1,660
1,393
2,033
Leasehold
improvements
£'000
1,438
-
-
1,438
-
-
-
1,438
1,058
67
-
-
1,125
102
-
-
-
1,227
211
313
380
Office
equipment
£'000
1,175
98
(679)
594
163
44
-
801
701
192
26
(679)
240
225
-
34
-
499
302
354
474
Total
£'000
5,286
98
(679)
4,705
163
1,029
-
5,897
2,399
259
666
(679)
2,645
327
44
708
-
3,724
2,173
2,060
2,887
The assets are covered by a fixed charge in favour of the Group’s lenders.
50 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 13. Leases
The company has lease contracts for offices occupied and printers. The amounts recognised in the financial statements in
relation to the leases are as follows:
(i) Amounts recognised in the consolidated balance sheet
The balance sheet shows the following amounts relating to leases:
Right of use assets
Buildings
Office equipment
Lease liabilities
Current
Non-current
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to leases:
Depreciation and impairment charge of right of use assets
Buildings
Plant and machinery
Interest expense (included in finance cost)
2022
£'000
1,660
90
1,750
395
1,448
1,843
2022
£'000
718
34
752
58
2021
£'000
1,393
78
1,471
666
877
1,543
2021
£'000
640
26
666
74
There are no other amounts relating to low value or short term leases excluded from the above amounts. The Australian
business entered into a new lease within the year ended 31 March 2022.
14. Goodwill
Cost and net book value
At 31 March 2020 and 31 March 2021 (Restated*)
Impairment
Foreign Exchange
At 31 March 2022
Goodwill by CGU
United Kingdom
Australia
Goodwill
£'000
27,581
(6,131)
255
21,705
2021
£'000
24,873
2,708
27,581
2022
£'000
18,742
2,963
21,705
*See note 33. Goodwill and other intangible assets have been tested for impairment by assessing the value in use of the
relevant cash generating units (“CGU”), the cash generating units are measured at UK and Australia level as this is how the
Board review the trading positions. The value in use calculations were based on projected cash flows into perpetuity.
Budgeted cash flows for 2022/23 were haircut and used and extrapolated based on the assumptions below.
The budget has been approved by management and the Board of Directors and is based on a bottom-up assessment of
costs and uses the known and estimated revenue pipeline.
The key assumptions are revenue growth, cost growth (and by implication EBITDA) and the WACC. The average year-on-year
growth that has been used as the basis for forecasting cash flows for each of the cash generating units when testing for
impairment were:
Year-on-year growth
2022/23 to 2023/24
2023/24 to 2024/25
2024/25 to 2025/26
2025/26 to Perpetuity
Revenue
7.0%
7.0%
7.0%
2.0%
Costs
5.0%
5.0%
5.0%
2.0%
51 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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.
The discount rate used to test the cash generating units was the Group’s post-tax Weighted Average Cost of Capital
(“WACC”) of 11.8% for the UK and 11.5% for Australia (2021: both 11.5%).
As a result of these tests, that there was no impairment necessary in Australia. After applying sensitivity analysis in respect
of the UK results and future cash flows, for presumed revenue growth rates, management believes that a partial impairment
is required for the goodwill in relation to the UK CGU of £6.1m (2021: Nil). The key sensitivity was reducing revenue forecast
by c.5% to reflect the uncertain economic outlook. Cost growth has not been sensitised from the above growth rates nor has
the WACC as taking the current environment into consideration, the impact of sensitising these inputs effectively cancelled
out each other.
As part of the impairment review, several scenarios affecting the UK CGU were calculated, using the impairment model and
applying sensitivities to the key assumptions. These looked at what effect changes in the WACC rates and movements in
EBITDA would have on the outcome.
•
If revenue growth was 3% below forecast / £500k per year, with no mitigation taken, there would be an
additional impairment of £1.8m
A reduction of EBITDA by 10% would create an additional impairment of £2.0m
The final test was an increase in WACC of 1% to 12.5% and a reduction in EBITDA by 10%, which would
•
•
give rise to an additional impairment of £3.7m
Due to the significance of the headroom in the Australian CGU, detailed sensitivity analysis was not undertaken.
15. Other intangible assets
Cost
At 31 March 2020
Additions during the year
Disposals during the year
At 31 March 2021
Additions during the year
Disposals during the year
At 31 March 2022
Customer
relationships Order books
Trademarks
Development
costs
£'000
£’000
£’000
£'000
21,305
1,457
1,080
-
-
-
-
-
-
21,305
1,457
1,080
-
-
-
-
-
-
1,579
3
(161)
1,421
-
-
Total
£'000
25,421
3
(161)
25,263
-
-
21,305
1,457
1,080
1,421
25,263
Amortisation
At 31 March 2020
Amortisation charge for the year (restated –
see below)
Disposal
Intangible impairment
At 31 March 2021
Amortisation charge for the year
At 31 March 2022
Net book amount
At 31 March 2022
At 31 March 2021
At 1 April 2020
20,227
1,457
487
-
-
20,714
591
21,305
-
203
1,078
-
-
-
1,457
-
1,457
-
-
-
364
26
-
690
1,080
-
1,080
-
-
716
769
605
(161)
-
1,213
139
1,352
69
596
810
22,817
1,118
(161)
690
24,464
730
25,194
69
799
2,604
Development costs relate to internally developed products that are either sold to clients standalone or used to provide services
to them. Amortisation in the prior year was misallocated to the class of assets to which it related and hence has been
reclassified.
52 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 16. Trade and other receivables
Trade receivables
Prepayments
Other receivables
2022
£'000
5,629
589
197
6,415
Restated*
2021
£'000
5,536
426
94
6,056
The carrying amount of trade and other receivables approximates to their fair value. Detailed disclosures relating to credit
risk exposures and analysis relating to the allowance for expected credit losses are in Note 32.
17. Contract assets and liabilities
Contract assets
Accrued income
2022
£'000
453
2021
£'000
619
Contract assets related to the portion of performance obligations already fulfilled by the Group and for which the definitive right
to receive cash was subject to completing further work under the relevant contract. Contract assets are converted into trade
receivables at the point that work delivered to the client is invoiced resulting in the Group’s unconditional right to receive cash.
Contract assets therefore represent a portion of future payments receivable by the Group under existing contracts.
Contract Liabilities
Deferred income
2022
£'000
1,408
2021
£'000
1,163
Contract liabilities consist of cash advances received from customers on account of work orders received and the remaining
liabilities relate to the amount of performance obligations still to be fulfilled and for which payment has already been received
from the client.
18. Borrowings and Net Debt
Borrowings
Average interest rates at the balance sheet date were:
2022
£'000
2021
£'000
8,754
8,338
%
4.75
%
4.82
As the loans are at variable market rates their carrying amount is equivalent to their fair value.
The borrowings are repayable on demand and interest is calculated at 3 month LIBOR plus a margin.
The borrowings are secured by charges over all the assets of Jaywing plc and guarantees and charges over all of the assets
of the various subsidiaries (Jaywing UK Limited, Alphanumeric Limited, Gasbox Limited, Jaywing Central Limited, Jaywing
Innovation limited, Bloom Media (UK) Limited, Epiphany Solutions limited).
53 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Reconciliation of Net debt
Cash and cash equivalents
Borrowings
Net Debt
1 April 2021
Cash flow
£’000
752
(8,338)
(7,586)
£’000
(38)
-
(38)
Accrued
Interest not
paid
£’000
-
(416)
(416)
31
March
2022
£’000
714
(8,754)
(8,040)
Reconciliation of Net debt including lease expense and deferred consideration
Non-cash release
of deferred
consideration
£’000
Accrual
recognised
31 March
2022
£’000
£’000
(416)
(1,022)
(714)
(2,152)
-
(2,152)
(8,754)
(1,843)
(626)
(11,223)
714
(10,509)
Borrowings
Lease liability
Deferred Consideration
Financial liabilities
Cash and cash equivalents
Net debt including lease expense and
deferred consideration
1 April
2021
£’000
(8,338)
(1,543)
(1,236)
(11,117)
752
(10,365)
Cash
flow
£’000
-
722
442
1,164
(38)
1,126
19. Trade and other payables
Trade payables
Tax and social security
Accruals
Deferred consideration
Other payables
-
-
882
882
-
882
2022
£'000
3,686
1,125
2,397
626
97
7,931
The carrying amount of trade and other payables approximates to their fair values. All amounts are short term.
Provisions
At 1 April 2021 and 31 March 2022
Total provisions are analysed as follows:
Current
2022
£'000
42
42
At 31 March 2022 a provision of £42,000 (2021: £42,000) 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.
54 Jaywing plc Annual Report and Accounts 2022
2021
£'000
2,145
2,161
2,402
1,236
121
8,065
2021
£'000
42
42
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 20. 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
Origination and reversal of temporary differences
At end of year
Other temporary differences:
At start of year
Prior year adjustment
Origination and reversal of temporary differences
Recognition of previously unrecognised losses
Reclassification from current tax*
At end of year
Total deferred tax:
At start of year
Origination and reversal of temporary differences
Reclassification from current tax asset*
At end of year
Origination on acquisition
Deferred tax is included within:
Deferred tax liability
Deferred tax asset
*See note 33
2022
£'000
Restated*
2021
£'000
(48)
-
58
10
(425)
-
(104)
(125)
-
(654)
(473)
(171)
-
(644)
-
(644)
(644)
(27)
(1)
(20)
(48)
345
(41)
(301)
-
(428)
(425)
318
(363)
(428)
(473)
113
(586)
(473)
There are no deductible differences or losses carried forward for which no deferred tax asset is recognised.
The March 2021 Budget announced an increase in the UK standard rate of corporation tax to 25% from 1 April 2023 with the
legislation receiving Royal Assent on 10 June 2021. Deferred tax as at 31 March 2022 has been provided at a blended rate
of 19% and 25% (2021: 19%) which is based on when the deferred taxation is expected to crystalise.
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 Group’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.
55 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 21. Share capital
Authorised:
45p deferred
shares
5p ordinary
shares
Authorised Share Capital at 31 March
2021 and at 31 March 2022
45,000
10,000
Allotted, issued and fully paid
At 31 March 2021
At 31 March 2022
45p deferred
shares
Number
67,378,520
67,378,520
5p ordinary
shares
Number
93,432,217
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.
22. Share premium
At start and end of year
2022
£'000
2021
£'000
10,088
10,088
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.
23. Treasury shares
At start and end of year (99,622 shares)
Treasury shares represent the nominal value of the shares purchased by the Company.
24. Capital redemption reserve
At start and end of year
2022
£'000
2021
£'000
(25)
(25)
2022
£'000
2021
£'000
125
125
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.
25. Share option reserve
At start of year
Share option charge
Transfer in relation to lapsed share options
At end of year
*See note 33.
2022
£’000
Restated*
2021
£’000
-
-
-
-
696
-
(696)
-
Share option reserve represents the fair value charge of share options in issue. The Board of Directors approved the original
transfer of reserves from Retained Earnings to a designated share option reserve.
56 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 26. Non-controlling interest
At start of year
Acquisition of non-controlling interest (note 11)
Share of profit for the year
At end of year
2022
£'000
354
(366)
12
-
Restated*
2021
£'000
1,339
(1,056)
71
354
*See note 33.
The profit or loss attributable to the non-controlling ownership stakes in subsidiary companies is transferred from retained
earnings to non-controlling interests each year*.
27. Foreign currency translation reserve
At start of year
Exchange differences on translation of foreign operations
At end of year
2022
£’000
(161)
279
118
2021
£’000
(155)
(6)
(161)
Foreign currency translation reserve represents the exchange differences on retranslation of foreign operations.
28. Retained earnings
At start of year
Acquisition of subsidiaries NCI*
Transfer in relation to lapsed share options*
Retained loss for the year
At end of year
2022
£'000
(26,332)
(290)
-
(6,449)
(33,071)
2021
£'000
(24,868)
(717)
696
(1,443)
(26,332)
*See note 33. Retained Earnings includes all current and prior period retained profits and share-based employee remuneration.
29. Capital commitments
The Group had no commitments to purchase property, plant and equipment at 31 March 2022 or at 31 March 2021.
30. 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 (2021: £30,000). At the year end, £22,500 (2021: £7,500) was outstanding to Deacon Street
Partners Limited.
Ian Robinson (Non-Executive Chairman) is a Director of Gusbourne Estate Limited, with which Jaywing commenced trading on
an arm’s length basis in H1 FY22. Revenue from Gusbourne Estate Limited amounted to £128k in the year with a debtor’s
balance of £46k as at 31 March 2022.
On 2 October 2019 entities associated with two of its major shareholders (the “Lenders”) acquired the Company’s existing
secured loan facility of £5,200,000 (“Jaywing Facility”) The Lenders immediately provided the Company with additional
secured facilities by increasing the Jaywing Facility by £3,000,000 to £8,200,000, which enabled the Company to repay its
existing outstanding overdraft and provide it with additional working capital. The Jaywing Facility has been provided to the
Company on the same terms as those provided by the previous lender. At the year end £8,754k (2021: £8,338k) was
outstanding. Further details of these borrowings are provided in Note 18.
On 11 August 2022, post year end, Company increased its existing short-term finance facility of £8.2m by £1m to £9.2m ,
through a variation of the existing debt agreement with the Lenders.
31. Standards and interpretations in issue at 31 March 2022 but not yet effective
At the date of authorisation of these financial statements, several new, but not yet effective, Standards and amendments to
existing Standards, and Interpretations have been published by the IASB. None of these Standards or amendments to existing
Standards have been adopted early by the Group. No new standards have been adopted in the current year.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective
date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year have not been
disclosed as they are not expected to have a material impact on the Group’s financial statements.
57 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 32. 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 several 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.
Borrowings are repayable on demand.
Interest rate risk
The Group finances its operations through a mixture of retained profits and 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:
Bank loans/revolving facility
Zero interest rate:
Trade payables
2022
£'000
2021
£'000
714
752
5,629
6,343
5,536
6,288
8,754
8,338
3,686
12,440
2,145
10,483
As at 31 March 2022, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
31 March 2022
Bank borrowings
Trade and other payables
Total amount due
Current
Non-current
Within 6
months
£'000
8,754
11,182
19,936
6 to 12
months
£'000
1 to 5 years
later than 5
years
£'000
£'000
-
-
-
-
-
-
-
-
-
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting period as follows:
31 March 2021
Current
Non-current
58 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Bank borrowings
Trade and other payables
Total amount due
Within 6
months
£'000
8,338
10,965
19,303
6 to 12
months
£'000
1 to 5 years
later than 5
years
£'000
£'000
-
-
-
-
-
-
-
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ from 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 £85k
lower, and if the interest rate on these liabilities had been 1% lower, profit before tax would have improved by £85k.
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 after review the Group’s trade receivables require an impairment for the year ended 31 March
2022 of £22,000 (2021: £53,000) which has been provided accordingly.
59 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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
Financial assets measured at amortised cost
Trade and other receivables
Cash and cash equivalents
Financial liabilities:
Financial liabilities measured at amortised cost
Borrowings
Lease liabilities
Trade and other payables
Provisions for liabilities
Net financial assets and liabilities
Plant, property and equipment
Goodwill
Other intangible assets
Contract assets
Prepayments
Deferred tax
Taxation payable
Provisions for deferred tax
2022
£'000
5,826
714
6,540
(8,754)
(1,843)
(9,339)
(42)
2021
£'000
5,630
752
6,382
(8,338)
(1,543)
(9,422)
(42)
(19,978)
(19,345)
(13,438)
(12,963)
2,173
21,705
69
453
589
644
32
-
25,665
2,060
27,581
799
619
426
158
474
(113)
32,004
Total equity
12,227
19,041
Capital management policies and procedures
The Group’s capital management objectives are:
(cid:131)
(cid:131)
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
2022
£'000
2021
£'000
12,227
19,041
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.
Financial assets and liabilities measured at fair value are not material.
60 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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 table provides information about the sensitivity of the fair value measurement to changes in the most significant
inputs:
Description
Significant unobservable input
Put and 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 31 March 2020
Amount recognised through retained earnings
Balance at 31 March 2021
Amount recognised through retained earnings
Balance at 31 March 2022
Put/call
options
£’000
484
(435)
49
(49)
-
61 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 33. Prior period restatement
There have been 2 prior year restatements, neither impacted Adjusted EBITDA or are directly related to the Group’s day to day
trading:
1) Recognition of deferred consideration in relation to acquisitions
In the financial statements for the year ended 31 March 2021 the fair value adjustments in respect of deferred
consideration and associated Put / Call options, recognised on the acquisition of both Massive Group PTY and Frank
Digital PTY and subsequent acquisitions of the Group, had been incorrectly recognised as goodwill or released
through the Profit and Loss rather than through retained earnings. As a result, a prior year restatement of £435k has
been recognised in the profit and loss and £2,208k through retained earnings, to reflect the true position as at 31
March 2021. Additionally, the consolidated Cashflow Statement has been restated to reclassify the acquisition of
non-controlling interest from investing activities to financing activities.
2) Release of closed share option scheme
In the financial statements for the year ended 31 March 2021 the fair value release of the share options in relation to
the scheme that has closed were released through the profit and loss rather than through retained earnings. As a
result, a prior year restatement of £696k has been recognised to reflect the true position as at 31 March 2021.
3) Reclassification of deferred tax
Deferred tax was reclassified from current to non-current to better represent the likely timing of recovery, that had no
impact of profit / loss or net assets.
The following table summarises the impact of the prior period restatement in relation to the financial statements of the Group:
Loss for the year as previously stated
Restatement 1 - Recognition of deferred consideration in relation to acquisitions
Restatement 2 - Release of closed share option scheme
Loss for the year as restated
Total equity for the year as previously stated
Restatement 1 - Recognition of deferred consideration in relation to acquisitions
Total equity for the year as restated
2021
£000
(241)
(435)
(696)
(1,372)
2021
£000
21,249
(2,208)
19,041
62 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Impact on the Consolidated Statement of Comprehensive Income
For the year ended 31 March
2021
2021
2021
Gross revenue
Direct Costs
Revenue
Other operating income
Operating expenses
Operating Profit / (loss)
Finance costs
Loss before tax
Tax credit
Loss for the year
Loss for the year is attributable to:
Non-controlling interests
Owners of the parent
Other comprehensive income
£’000
£'000
£’000
Original Adjustment
Restated
25,957
(5,792)
20,165
793
-
-
-
-
25,957
(5,792)
20,165
793
(20,867)
(1,131)
(21,998)
91
(1,131)
(1,040)
(451)
(360)
119
(241)
71
(312)
(241)
-
(451)
(1,131)
(1,491)
-
119
(1,131)
(1,372)
-
71
(1,131)
(1,443)
(1,131)
(1,372)
Items that will be reclassified subsequently to profit or loss
Exchange differences on retranslation of foreign operations
Total comprehensive loss for the period
(6)
(247)
-
(6)
(1,131)
(1,378)
Total comprehensive loss is attributable to:
Non-controlling interests
Owners of the Parent
Basic and diluted loss per share
Loss per share
71
(318)
(247)
-
71
(1,131)
(1,449)
(1,131)
(1,378)
(6.90p)
(153.66p)
(1.54p)
63 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Impact on the Consolidated Balance Sheet
As at 31 March
Non-current assets
Property, plant and equipment
Goodwill
Deferred tax
Other intangible assets
Current assets
Trade and other receivables
Contract assets
Current tax asset
Cash and cash equivalents
Total assets
Current liabilities
Borrowings
Trade and other payables
Contract Liabilities
Current lease liabilities
Current tax liabilities
Provisions
Non-current liabilities
Non-current lease liabilities
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Capital redemption reserve
Treasury shares
Share option reserve
Foreign currency translation reserve
Retained earnings
Equity attributable to owners of the parent
Non-controlling interest
Total equity
2021
£'000
2021
£'000
2021
£'000
Original Adjustment
Restated
2,060
29,789
-
799
-
(2,208)
586
-
2,060
27,581
586
799
32,648
(1,622)
31,026
6,214
619
474
752
8,059
40,707
8,338
8,065
1,163
666
194
42
18,468
877
113
990
19,458
(158)
-
(428)
-
-
(2,208)
-
-
-
-
-
-
-
-
-
-
-
6,056
619
46
752
7,473
38,499
8,338
8,065
1,163
666
194
42
18,468
877
113
990
19,458
21,249
(2,208)
19,041
34,992
10,088
125
(25)
-
(161)
(24,124)
20,895
354
21,249
-
-
-
-
-
-
(2,208)
(2,208)
-
(2,208)
34,992
10,088
125
(25)
-
(161)
(26,332)
18,687
354
19,041
64 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8
34. Post balance sheet events
Bloom legal case
On 12 April 2022 there was a high court judgment in the case of "Others vs Jaywing” where the judge found that the Claimants’
claim must be dismissed in its entirety and awarded costs, of which £419k has so far been recovered post year end.
Acquisition of Midisi Limited
On 26th August 2022, post period end, the Company completed the acquisition of Midisi Limited, a marketing software
development business, which owns the intellectual property rights for the 'Decision' software. ( the Acquisition)
The Directors believe that the Acquisition will be immediately earnings-enhancing from the retention of 100% of revenues, and
that both the revenue and profit will increase over time as Jaywing focuses on adding new clients and developing the
proposition further.
The initial consideration for the Acquisition is £400,000, to be paid from Jaywing’s existing cash resources, plus excess cash of
£845,230. Further fixed payments totalling £1.4m will be paid at 6-monthly intervals over 42 months, plus an additional
performance-related earn-out payable at 6-monthly intervals between months 13 and 49, funded out of planned cashflows
generated from Decision revenues. The earn-out relates to revenues generated from Decision, and the maximum earn-out
payment is capped at £3.2m.
Connected to the acquisition, and to provide further working capital to the Group, the Company has increased the headroom in
its existing short-term finance facility by £1m, through a variation of the existing debt agreement with its lenders, DSC
Investment Holdings Ltd and 1798 Volantis Fund Ltd. This would cover the initial transaction costs, with subsequent payments
funded out of the Company’s cashflows.
Increase in debt facility
On 11 August 2022, post year end, the Company increased its existing short-term finance facility of £8.2m by £1m to £9.2m ,
through a variation of the existing debt agreement with its Lenders. Further details are provided in Notes 30 and 18 to the
Consolidated Financial Statements
65 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Company Financial Statements
Company Profit and Loss account
Turnover
Administrative expenses*
Operating loss
Income from fixed asset investment
Other income
Finance Costs
Loss on ordinary activities before taxation
Taxation on ordinary activities
Loss and total comprehensive loss on ordinary activities after taxation
Note
2022
£'000
Restated*
2021
£'000
2
3
4
4
5
6
-
(10,743)
-
(2,454)
(10,743)
(2,454)
418
-
1,717
20
(460)
(421)
(10,785)
(1,138)
573
(10,212)
331
(807)
*The comparative information has been restated due to fair value adjustments misstated in the prior period as discussed in note
27.
The accompanying Notes to the Parent Company Financial Statements form an integral part of these Financial Statements.
66 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Company Balance Sheet
Fixed assets
Tangible assets
Deferred tax
Investments
Current assets
Cash at bank
Debtors due within one 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
10
21
12
13
2022
£'000
1,040
605
26,235
27,880
2
575
577
14
(23,105)
15
17
18
19
18
18
18
5,352
(690)
4,662
34,992
10,088
(25)
-
125
(40,518)
4,662
Restated*
2021
£'000
1,242
-
34,714
35,956
12
1,237
1,249
(21,540)
15,665
(840)
14,825
34,992
10,088
(25)
-
125
(30,355)
14,825
* See note 27 for information regarding the restatement.
The Financial Statements were approved by the Board of Directors and authorised for issue on 6 September 2022.
Signed on behalf of the Board of Directors:
Andrew Fryatt
Director
The accompanying Notes to the Parent Company Financial Statements form an integral part of these Financial Statements.
67 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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 2020
34,992
10,088
(25)
696
125
(30,364)
15,512
-
-
-
(696)
-
9
(687)
34,992
10,088
(25)
Loss for the year and total other
comprehensive income as
previously stated
At 31 March 2021 as
previously stated
Prior year adjustment (see note
27)
Loss for the year and total other
comprehensive income as
restated (see note 27)
Release of Put / Call Option
Transfer in relation to lapsed
share options
Total comprehensive income
-
-
-
-
-
-
-
-
-
-
At 31 March 2021 as restated
34,992
10,088
At 1 April 2021
34,992
10,088
Release of Put / Call Option*
Loss for the year and total other
comprehensive income
Total comprehensive income
-
-
-
-
-
-
At 31 March 2022
34,992
10,088
(25)
-
-
-
-
-
(25)
(25)
-
-
-
-
696
-
-
(696)
(696)
-
-
-
-
-
-
125
(30,355)
14,825
-
-
-
-
-
(816)
(807)
120
696
9
125
(30,355)
(120)
(807)
120
-
(687)
14,825
125
(30,355)
14,825
49
49
(10,212)
(10,212)
(10,163)
125
(40,518)
(10,163)
4,662
-
-
-
*The comparative information has been restated due to fair value adjustments misstated in the prior period as discussed in note 27.
The accompanying Notes to the Parent Company Financial Statements form an integral part of these Financial Statements.
68 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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
In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the
Group can continue in operational existence for the foreseeable future.
In addition to the normal process of preparing forecasts for the Group, the Board has also considered downside risks and the
potential impact of Covid-19 and the economic environment on the cash flows of the Group for a period to 30 September 2024. This
has been done by looking at various scenarios within the forecasts for the potential effect of changes in the market during the
forecast period.
The outcome for the year and the forecasts prepared by the business show that we do not consider there to be same level of
uncertainty now as there was 12 months ago.
In considering their position the Directors have also had regard to letters of support in respect of the secured debt which have
received from each of the holders of that debt confirming that the debt will not be called in and support will be provided for the
foreseeable future. Details of this debt are contained in Note 18 and Note 30.
The Group financial statements do not include the adjustments that would result if the Group were unable to continue as a going
concern. The Directors have a reasonable expectation that the Group has adequate resources to continue in existence for the
foreseeable future and have concluded it is appropriate to adopt the going concern basis of accounting in the preparation of the
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
69 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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.
Within the year the trade and assets of subsidiary entities were transferred within the Group. As the economic substance of the
transaction did not result in a loss of value, investments in subsidiaries have continued to be held at their carrying value. An
impairment review is performed annually in line with IAS36. See valuation of investments in significant judgement and estimates.
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
Buildings: period of the lease
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’.
Recognition of credit losses is no longer dependent on the Company first identifying a credit loss event. Instead the Company
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.
70 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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.
Leases
The Company reports using IFRS 16, whereby the Company now recognises a lease liability and a right of use asset.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement
date;
• amounts expected to be payable by the group under residual value guarantees;
• the exercise price of a purchase option if the group is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The
lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is
generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value to the right of use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Company, where possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received.
If the Company is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability until they take effect, then when adjustments to lease payments based on an index or rate take effect,
the lease liability is reassessed and adjusted against the right of use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right of use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• restoration costs.
Right of use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If
the Company is reasonably certain to exercise a purchase option, the right of use asset is depreciated over the underlying asset’s
useful life.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
See note 11.
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.
71 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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.
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.
Income
Interest receivable
Interest receivable is reported on an accrual basis using the effective interest method.
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.
72 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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 nor 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.
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
In the previous year the put/call option in Frank Digital PTY had been valued by an independent assessor and was recognised
with both a service and non-service element in the accounts. The non-service element was fully recognised as at the date of
acquisition and the fair value reviewed annually. The service element was 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. In the year the
put/call option has been completed.
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.
73 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 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 cash flows of those investments.
IFRS 16
Under IFRS 16 the Company is required to make a judgement in determining the discount rate to be used in calculating the present
value of lease payments when recognising the lease liabilities and right of use asset. For the discount rate the Company has used
the lessee’s incremental borrowing rate, being the rate that the individual lessee would have to pay to borrow the funds necessary to
obtain an asset of similar value to the right of use asset in a similar economic environment with similar terms, security and
conditions. To determine the incremental borrowing rate, the Company, where possible, uses recent third-party financing received
by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was
received. The right of use asset is depreciated over the term of the lease. The term has been determined with reference to the lease
agreements and any expected extension beyond the end of the lease end date specified in the lease agreement.
2. Other operating charges
Impairment of investment, see note 12
Administrative expenses
Total administrative expenses
3. Operating loss
Operating loss is stated after charging:
Impairment of investment, see note 12
Depreciation of owned fixed assets
Depreciation of right of use assets
4.
Income from fixed asset investments and other income
Dividends received from subsidiary companies
5.
Finance costs
Bank interest payable
Interest on lease liability
Finance charge on acquisition
Total
2022
£'000
9,185
1,558
10,743
2022
£'000
9,185
73
241
2022
£'000
418
2022
£'000
416
44
-
460
2021
£'000
-
2,454
2,454
2021
£'000
-
58
169
2021
£'000
1,717
2021
£'000
403
44
(26)
421
74 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 6.
Tax on ordinary activities
The tax credit / (charge) is based on the loss for the year and represents:
UK corporation tax at 19% (2021: 19%)
Adjustment in respect of prior period
Total current tax
Deferred tax:
Origination and reversal of timing differences
Total tax charge / (credit)
The tax credit can be explained as follows:
Loss before tax
Tax using the UK corporation tax rate of 19% (2021: 19%)
Effect of:
Non-taxable income
Recognition of unused losses
Impairment of investments
Non-deductible expenses / credit
Prior year adjustment
Current year credit
2022
£'000
2
-
2
571
573
2022
£’000
(10,785)
(2,049)
-
(240)
1,745
(29)
-
(573)
2021
£'000
(408)
55
(353)
22
(331)
2021
£'000
(1,138)
(216)
343
-
-
(513)
55
(331)
7. Auditor’s remuneration
Details of remuneration paid to the auditor by the Company are shown in Note 7 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 credit
Total emoluments
Further information in respect of Directors is given in the Directors’ Remuneration Report.
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 £284k (2021: £203k).
2022
5
2022
£’000
584
73
15
-
672
2022
£'000
554
30
15
599
2021
17
2021
£’000
788
101
52
(696)
245
2021
£'000
277
27
13
317
75 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 9. Dividends
The Directors do not recommend the payment of a dividend for the current year (2021: £Nil).
10. Tangible fixed assets
Cost at 31 March 2021
Additions
Right of use asset additions
Disposals
Cost at 31 March 2022
Depreciation at 31 March 2021
Charge for the year on owned assets
Disposals
Charge on right of use assets
Depreciation at 31 March 2022
Net book value at 31 March 2022
Net book value at 31 March 2021
11. Leases
Buildings
£’000
Leasehold
Improvements
£’000
Fixtures &
fittings
£'000
1,147
-
-
-
1,147
-
286
-
-
152
438
709
861
389
-
-
-
389
161
42
-
-
203
186
228
359
11
105
(59)
416
206
31
(55)
89
271
145
153
Total
£’000
1,895
11
105
(59)
1,952
653
73
(55)
241
912
1,040
1,242
The company has lease contracts for the office occupied in Sheffield and printers. The amounts recognised in the financial
statements in relation to the leases are as follows:
(i) Amounts recognised in the statement of financial position
The balance sheet shows the following amounts relating to leases:
Right of use assets
Buildings
Plant and machinery
Lease liabilities
Current
Non-current
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to leases:
Depreciation charge of right of use assets
Buildings
Plant and machinery
Interest expense (included in finance cost)
2022
£'000
709
97
806
170
690
860
2022
£'000
152
89
241
44
2021
£'000
861
78
939
169
840
1,009
2021
£'000
143
26
169
44
76 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 12.
Investments
Cost at 31 March 2021
Additions
Cost at 31 March 2022
Impairment at 31 March 2021
Impairment in year
Impairment at 31 March 2022
Net book value at 31 March 2022
Net book value at 31 March 2021
Subsidiaries
£'000
61,118
706
61,824
26,404
9,185
35,589
26,235
34,714
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 14 in the Group’s Financial Statements.
This review has concluded that an impairment was required to the carrying value of the Company’s UK investments of £9.2m
(2021: £Nil) based upon sensitivities applied to forecast EBITDA.
Jaywing plc acquired the remaining 25% of Massive Group PTY on 21 October 2020 after the remaining shareholders exercised
their put option. The 25% stake was acquired for $4.0m (£2.2m), the total consideration for the purchase of the 100% interest was
$9.6m (£5.4m). At 31 March 2021 an amount of £0.3m was outstanding to the original shareholders. This amount was fully paid by
30 June 2021.
On 2 November 2021 Jaywing plc agreed with Matt Barbelli as the sole director of Frank Digital Pty Ltd (“Frank Digital”) in Australia
to accelerate the exercise of the Put and Call Option in relation to the 25% of the shares in Frank Digital held by Barbelli Enterprises
Pty Ltd ATF Barbelli Holdings Trust (“BEP”). The remaining 25% stake was acquired for a consideration of $1.2m (£0.7m) and
Jaywing plc now owns 100% of the shares in Frank Digital.
At 31 March 2022 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 Network Limited
Digital Media and Analytics Limited
DMG London Limited
Epiphany Solutions Limited
Frank Digital PTY Limited
Gasbox Limited
Hyperlaunch New Media Limited
Inbox Media Limited
Iris Associates Limited
Jaywing Central Limited
Jaywing Information Limited
Jaywing Innovation Limited
Jaywing North Limited
Jaywing Australia PTY Limited (formerly
Massive Group PTY Limited)
Jaywing UK Limited (formerly Scope
Creative Marketing Limited)
Class of
share
capital held
Ordinary
Proportion held
By parent
Company
100%
By the
Group
100%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
-
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Nature of
Business
Dormant
Dormant
Data services & consultancy
Dormant
Dormant
Dormant
Dormant
Dormant
Search Engine Optimisation
Website design and build
Non-trading
Dormant
Dormant
Dormant
Online marketing & media
Dormant
Product development
Dormant
Ordinary
100%
100%
Search Engine Optimisation
Ordinary
100%
100%
Direct marketing
77 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Shackleton PR Limited
The Comms Department Limited
Woken Limited
Ordinary
Ordinary
Ordinary
-
-
-
100%
100%
100%
Dormant
Dormant
Dormant
All the companies listed above have been consolidated.
All the companies listed above are incorporated in England and Wales with the following exceptions:
Company
Frank Digital PTY Limited
Jaywing Australia PTY
(formerly Massive Group PTY Limited)
Limited
Country of Incorporation
Australia
Australia
Address
2 Elizabeth Plaza, North Sidney, NSW 2060
2 Elizabeth Plaza, North Sidney, NSW 2060
The companies incorporated in England and Wales all have their registered office at Albert Works, Sidney Street, Sheffield, S1
4RG. The companies incorporate in Australia all have their registered office at 2 Elizabeth Plaza, North Sydney, NSW 2060.
13. Debtors due within one year
Amounts due from Group undertakings
Prepayments
Other taxation and social security
Deferred tax asset (Note 21)
Corporation tax
Amounts due from Group undertakings attract no interest and are repayable on demand.
14. Creditors: amounts falling due within one year
Borrowings (Note 16)
Trade creditors
Amounts owed to Group undertakings
Other taxation and social security
Other creditors
Accruals
Lease liability
Deferred consideration payable on acquisition of subsidiary undertakings
Amounts owed to Group undertakings attract no interest and are repayable on demand.
15. Creditors: amounts falling due in more than one year
Lease liability
2022
£’000
58
173
344
-
-
575
2022
£'000
8,754
449
12,593
19
-
494
170
626
23,105
2022
£'000
690
2021
£’000
58
262
-
34
883
1,237
2021
£'000
8,338
335
10,270
913
13
266
169
1,236
21,540
2021
£'000
840
78 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 16. Borrowings
Summary:
Borrowings
Borrowings are repayable as follows:
Within one year:
Borrowings
Total due within one year
2022
£'000
8,754
2022
£'000
8,754
8,754
2021
£'000
8,338
2021
£'000
8,338
8,338
As the loans are at variable market rates their carrying amount is equivalent to their fair value.
Interest is calculated at 3 month LIBOR plus a margin.
17. Share capital
Allotted, issued and fully paid:
At 31 March 2021
At 31 March 2022
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.
18. 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.
19. Treasury shares
At 31 March 2022 and 31 March 2021
2022
£'000
2021
£'000
25
25
79 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8
20. Share-based payments
Share-based payment credit is as follows:
Share-based payment
Related National Insurance costs
*See note 27
21. Deferred tax asset
A deferred tax asset is provided for in the financial statements and consists of the following:
Accelerated capital allowances
Recognition of unused losses
Deferred tax asset
The amount of deferred tax recognised in profit or loss was as follows:
Accelerated capital allowances
Recognition of unused losses
Total
2022
£'000
-
-
-
2022
£'000
52
553
605
2022
£'000
18
553
571
Restated*
2021
£'000
(587)
(109)
(696)
2021
£'000
34
-
34
2021
£'000
22
-
22
The March 2021 Budget announced an increase in the UK standard rate of corporation tax to 25% from 1 April 2023 with the
legislation receiving Royal Assent on 10 June 2021. Deferred tax as at 31 March 2022 has been provided at a blended rate of
19% and 25% (2021: 19%) which is based on when the deferred taxation is expected to crystalise.
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 Group’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.
22. Contingent liabilities
There is a cross guarantee between members of the Jaywing plc group of companies on all overdrafts and borrowings with the
group’s lenders. At 31 March 2022 the amount thus guaranteed by the company was £nil (2021: £nil).
23. Related parties
The Company is exempt from the requirements of 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 30 to the Consolidated Financial Statements.
24. Financial risk management objectives and policies
Details of Group policies are set out in Note 32 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 £32k (2021: £52k).
80 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 26. Share-based payments
Employees of the Company were entitled to participate in an equity and cash-settled share option scheme in the financial year to
March 2021. The scheme was terminated in October 2020, at which point all outstanding options lapsed.
The options were granted with a fixed exercise price and had a vesting period of up to two years. The vesting conditions related to
the performance of the overall Jaywing plc Group and continued employment during the vesting period. There were 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 was nil (2021: nil).
27. Prior period restatement
There have been 2 prior year restatements, neither impacted Adjusted EBITDA or are directly related to the Company’ day to day
trading:
1) Recognition of deferred consideration in relation to acquisitions
In the financial statements for the year ended 31 March 2021 the fair value adjustments in respect of deferred
consideration and associated Put / Call options, recognised on the acquisition of both Massive Group PTY and Frank
Digital PTY and subsequent acquisitions of the Group, had been incorrectly released through the Profit and Loss rather
than through retained earnings. As a result, a prior year restatement of £120k has been recognised to reflect the true
position as at 31 March 2021.
2) Release of closed share option scheme
In the financial statements for the year ended 31 March 2021 the fair value release of the share options in relation to the
scheme that has closed were released through the profit and loss rather than through retained earnings. As a result, a
prior year restatement of £696k has been recognised to reflect the true position as at 31 March 2021.
The following table summarises the impact of the prior period restatement in relation to the financial statements of the Company:
Profit for the year as previously stated
Restatement 1 - Recognition of deferred consideration in relation to acquisitions
Restatement 2 - Release of closed share option scheme
Loss for the year as restated
Impact on the Consolidated Statement of Comprehensive Income For the
year ended 31 March
Turnover
Administrative expenses
Operating loss
Income from fixed asset investment
Other income
Finance costs
2021
£000
9
(120)
(696)
(807)
2021
2021
2021
£’000
£'000
£’000
Original Adjustment
Restated
-
(1,638)
(1,638)
1,717
20
(421)
-
(816)
(816)
-
-
-
-
(2,454)
(2,454)
1,717
20
(421)
Loss on ordinary activities before taxation
(322)
(816)
(1,138)
Taxation on ordinary activities
331
-
331
Profit / (loss) and total comprehensive income on ordinary activities after
taxation
9
(816)
(807)
81 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Impact on the Consolidated Balance Sheet
Fixed assets
Tangible assets
Deferred tax
Investments
Current assets
Cash at bank
Debtors due within one 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
28. Post balance sheet events
2021
£'000
Original
1,242
-
34,714
35,956
12
1,237
1,249
(21,540)
15,665
(840)
14,825
34,992
10,088
(25)
-
125
(30,355)
14,825
2021
£'000
Restated
1,242
-
34,714
35,956
12
1,237
1,249
(21,540)
15,665
(840)
14,825
34,992
10,088
(25)
-
125
(30,355)
14,825
On 26th August 2022, post period end, the acquisition of Midisi Limited, a marketing software development business, which owns
the intellectual property rights for the 'Decision' was completed.
The Directors believe that the Acquisition will be immediately earnings-enhancing from the retention of 100% of revenues, and that
both the revenue and profit will increase over time as Jaywing focuses on adding new clients and developing the proposition further.
The initial consideration for the Acquisition is £400,000, to be paid from Jaywing’s existing cash resources, plus excess cash of
£845,230. Further fixed payments totalling £1.4m will be paid at 6-monthly intervals over 42 months, plus an additional
performance-related earn-out payable at 6-monthly intervals between months 13 and 49, funded out of planned cashflows
generated from Decision revenues. The earn-out relates to revenues generated from Decision, and the maximum earn-out payment
is capped at £3.2m.
Connected to the acquisition, and to provide further working capital to the Group, the Company has increased the headroom in its
existing short-term finance facility by £1m, through a variation of the existing debt agreement with its lenders, DSC Investment
Holdings Ltd and 1798 Volantis Fund Ltd. This would cover the initial transaction costs, with subsequent payments funded out of the
Company’s cashflows.
82 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Shareholder Information
General Meeting
A General Meeting will be held on Thursday 29th September 2022 at the offices of Jaywing plc, Albert Works, Sidney Street, Sheffield,
S1 4RG at 12:00pm.
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
General Meeting from at least 15 minutes prior to the meeting until its conclusion.
(cid:131)
(cid:131)
(cid:131)
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 2022.
Issued Share Capital
As at 31 August 2022 (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 31 August 2022 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.
Shareholder enquiries
Neville Registrars Limited maintain 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:
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen, B62 8HD
Shareholder Helpline: 0121 5851131, fax: 0121 5851132.
Website address www.nevilleregistrars.co.uk
Website
Information on the Group is available at https://investors.jaywing.com.
83 Jaywing plc Annual Report and Accounts 2022
DocuSign Envelope ID: 187157FC-B284-4212-ACB5-EB020E6A55A8 Company Information
Registered Office
Albert Works
71 Sidney Street
Sheffield
S1 4RG
Registered Number: 05935923
Country of incorporation: England
Auditor
Grant Thornton UK LLP
1 Holly Street
Sheffield
S1 2GT
Nominated adviser and broker
Cenkos Securities plc
6.7.8 Tokenhouse Yard
London
EC2R 7AS
Registrars
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Solicitors
Fieldfisher LLP
No 1 Spinningfields
Hardman Street
Manchester
M3 3EB
Company Secretary
Chris Hughes
Albert Works
71 Sydney Street
Sheffield
S1 4RG
84 Jaywing plc Annual Report and Accounts 2022
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