Certain information contained within this Announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in
the United Kingdom. Upon publication of this Announcement, this
information is now considered to be in the public
domain.
Jaywing
plc
("Jaywing" or "the Company")
Trading
update, Increase in Loan Facility and Strategic Review
Jaywing Plc (AIM: JWNG), the
marketing and data science business specialising in integrated
marketing and risk and data consulting.
As set out in our interim results
strong trading in Australia and our Risk Consulting business has
continued to offset the much publicised weakness in the UK Agency
market. We have continued to cut costs, particularly in the UK
which will ensure that we have maximum operational leverage as we
emerge from this softer market. Whilst market conditions
continuing to be challenging there are encouraging signs of
recovery. The business has built a strong pipeline of
opportunities, and has recently won significant new contracts,
including with Subaru Europe, Crocs (Asia Pacific) and with Homes
England. A number of further opportunities are in process,
particularly for UK Agency. We also have a number of new
opportunities for our AI-based Decision software, which is
beginning to build momentum at high margins.
As at 31st January net
debt was slightly reduced, at £11,769k, down from £11,925k at
30th September 2023. It is expected that the
Company will generate operating cashflow throughout 2024 and beyond
and with limited further restructuring required and no material
Capex forecast the business should naturally deliver and emerge
with a much stronger balance sheet. In order to not place
undue strain on the Company's working capital in the short term the
Company announces that it has increased its existing loan facility
("the Loan Facility") with the Company's two lenders, DSC
Investment Holdings Limited and Lombard Odier Asset Management
(Europe) Limited* (jointly, "the Lenders") by £566,500, taking the
total facility to £9,766,500.
Strategic Review
The Lenders remain extremely
supportive of the business, its improving
operating performance and strong prospect list, but have
requested that as the Company's expected recovery materialises
throughout 2024, it should seek to refinance the Loan Facility,
which was originally provided on a short-term interim basis in
August 2019, with a more appropriate longer term capital base. The
Company has invested significantly in broadening its geographic and
technical capabilities to best serve the increasingly globalised
demands of its customer base for cost effective solutions
underpinned by technical insight and measurable return on marketing
spend. In order to continue to build on this platform and
reflecting the Lenders desire to see the business recapitalised,
the Company will explore all strategic options, including a
possible sale of the Company as it continues to recover its
profitability to ensure that its client service can be delivered
and that the ongoing support of the Loan Facility can be repaid.
As the Company is subject to the
City Code and one of the possible outcomes of the strategic review
is a sale of the Company, it is considered to be in an "offer
period" as defined in the City Code, and the dealing disclosure
requirements as set out further below will apply.
The Company confirms that is not in
receipt of any approach, nor in discussions with any potential
offeror, at the date of this announcement.
Board Changes
Under the revised loan agreement
each lender has the right to appoint two directors to the
Board. Lombard Odier has requested that Henry Turcan and Rob
Giles be appointed. DSC has requested that David Beck be appointed
as a director. These appointments are subject to the usual
regulatory due diligence and are expected to join the board as soon
as this process is complete. A further announcement will be made in
due course. As part of the board restructuring Philip Hanson
will resign with immediate effect but will continue to support the
Company in an advisory capacity with the benefit of his strong
industry background and networks . The board would like to thank
Philip for his valued contribution and service to the Company as a
director. The Company intends to appoint an additional independent
non-executive director as and when appropriate.
Related party transaction
The additional capital being lent by
the Lenders is being provided on the same terms as the existing
Loan Facility. As each of the Lenders, being DSC Investment
Holdings Limited ("DSC" and Lombard Odier Asset Management (Europe)
Limited ("Lombard Odier"), are considered related parties because
of their respective shareholdings in the Company, the provision of
this capital by entities associated with each of them is deemed to
comprise related party transactions for the purposes of Rule 13 of
the AIM Rules for Companies. The Independent Director (being Andrew
Fryatt) considers, having consulted with the Company's nominated
adviser, SPARK Advisory Partners Limited, that the terms of the
transaction are fair and reasonable insofar as the Company's
shareholders are concerned.
*acting in its capacity as
discretionary investment manager or sub-adviser for and on behalf
of certain funds and accounts managed by it and/or as agent of
Lombard Odier Asset Management (USA) Corp (LOAM USA) acting in its
capacity as discretionary investment manager for and on behalf of
certain funds and accounts managed by it ("Lombard
Odier").
-Ends-
For any further enquiries,
please contact:
For further information on the
Company, please visit www.jaywing.com or
contact:
Jaywing plc
Christopher Hughes (Company
Secretary)
T: +44 (0)333 370 6500
SPARK Advisory Partners
Limited (Nominated and Financial Adviser)
Matt Davis / James
Keeshan
T: +44 (0) 20 3368 3552
Turner Pope (Broker)
James Pope / Andy Thacker
T: +44 (0) 20 3657 0050
Notice related to the financial adviser
SPARK Advisory Partners Limited,
which is regulated by the Financial Conduct Authority
in the United Kingdom, is acting exclusively for
Jaywing and no one else in connection with the matters referred to
in this announcement and will not be responsible to anyone other
than Jaywing for providing the protections afforded to clients of
SPARK Advisory Partners Limited, or for providing advice in
relation to the matters referred to in this
announcement.
The
City Code
The City Code applies to quoted
public companies which have their registered office in the UK, the
Channel Islands or the Isle of Man and, in addition, unquoted
public companies which have their registered office in the UK, the
Channel Islands, or the Isle of Man and whose central management
and control remain in the UK, the Channel Islands or the Isle of
Man. Accordingly, the City Code applies to the Company. Under the
City Code, if an acquisition of Ordinary Shares or interests
therein were to increase the aggregate holding of the acquirer and
its concert parties to interests in shares carrying 30 per cent. or
more of the voting rights in the Company, the acquirer and,
depending on circumstances, its concert parties would be required
(except with the consent of the Panel) to make a cash offer for the
outstanding shares in the Company at a price not less than the
highest price paid for interests in shares by the acquirer or its
concert parties during the previous 12 months.
This requirement would also be
triggered by any acquisition of New Ordinary Shares and/or interest
therein by a person holding (together with its concert parties)
Ordinary Shares carrying between 30 and 50 per cent. of the voting
rights in the Company if the effect of such acquisition was to
increase that person's percentage of the total voting rights of the
Company.
Disclosure requirements of
the City Code
Under Rule 8.3(a) of the City Code,
any person who is interested in 1 per cent. or more of any class of
relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is
likely to be, solely in cash) must make an Opening Position
Disclosure following the commencement of the offer period and, if
later, following the announcement in which any securities exchange
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies
must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the City Code,
any person who is, or becomes, interested in 1 per cent. or more of
any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or
of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s), save to the extent that these
details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by
no later than 3.30 pm (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together
pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities
of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must
also be made by the offeree company and by any offeror and Dealing
Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror
companies in respect of whose relevant securities Opening Position
Disclosures and Dealing Disclosures must be made can be found in
the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.