TIDMJWNG
RNS Number : 7897J
Jaywing PLC
25 August 2021
The following amendment has been made to the 'Final Results'
announcement released on 25 August 2021 at 7.00am under RNS No
6673J:
Jaywing plc has updated the website URL where investors can
access copies of the Annual Report to https://investors.jaywing.com
All other details remain unchanged. The full amended text is shown
below.
This announcement contains inside information
Jaywing plc
25 August 2021
Jaywing plc
("Jaywing" or "the Company")
Posting of Annual Report and Accounts
Jaywing plc, the UK agency specialising in data science,
announces that copies of the Annual Report and Accounts for the
year ended 31 March 2021 are today being posted to shareholders and
are available to view on the Company's website:
https://investors.jaywing.com
Enquiries:
Jaywing plc
Caroline Ackroyd (Company Secretary) Tel: 0114 281 1200
Cenkos Securities plc
Nicholas Wells
Callum Davidson (Nominated Adviser) Tel: 0207 397 8920
Financial highlights
2021 2020
GBP'000 GBP'000
Net Revenue* 20,165 24,043
--------- ---------
Adjusted EBITDA** 2,181 (35)
--------- ---------
Cash Generated from
Operations 2,258 953
--------- ---------
Net Debt pre IFRS 16*** (7,586) (5,943)
--------- ---------
Statutory Results
2021 2020
GBP'000 GBP'000
Net Revenue* 20,165 24,043
--------- ---------
Operating Profit /
(loss) 91 (8,874)
--------- ---------
Loss before Tax (360) (9,392)
--------- ---------
Loss per share (0.34p) (9.95p)
--------- ---------
Net Debt post IFRS16 (9,129) (8,136)
--------- ---------
Reconciliation of Operating Profit / (Loss) with Adjusted
EBITDA
2021 2020
GBP'000 GBP'000
Operating Profit /
(Loss) 91 (8,874)
--------- ---------
Add Back:
--------- ---------
Depreciation of property,
plant & equipment 259 331
--------- ---------
Depreciation of right
of use assets 666 666
--------- ---------
Amortisation of intangibles 1,118 1,547
--------- ---------
EBITDA 2,134 (6,330)
--------- ---------
Impairment of goodwill - 5,468
--------- ---------
Impairment of other
intangibles 690 321
--------- ---------
Restructuring charges 488 867
--------- ---------
Fair value movement
on Put / Call option (435) 123
--------- ---------
Share based payment
charges / (credits) (696) (484)
--------- ---------
Adjusted EBITDA 2,181 (35)
--------- ---------
* Revenue less third-party direct costs of sale
** Adjusted EBITDA represents EBITDA before restructuring costs,
impairment charges, share based payment credits and fair value
movement on Put / Call options
*** Including accrued interest
Chairman's Statement
Results
I am pleased to report an increase in underlying earnings in
FY21 with an Adjusted EBITDA for the Group of GBP2,181,000 (2020:
Adjusted EBITDA loss of GBP35,000). This represents a GBP2.2m
turnaround, despite a 16% contraction in Net Revenue in FY21 to
GBP20.2m from GBP24.0m in FY20. Net Revenue in the second half of
FY21 at GBP10.9m was 16% up on Net Revenue for the first half of
GBP9.3m. Adjusted EBITDA margin as a percentage of Net Revenue for
FY21 amounted to 10.8 % compared with a loss in FY20.
Cash Generated from Operations for the year improved by
GBP1,305,000 to GBP2,258,000 (2020: GBP 953,000).
The statutory operating profit was GBP91,000 (2020: operating
loss of GBP 8,874,000).
Despite the challenges of FY21 these results reflect improving
efficiencies in the business and the impact of a successful
restructuring of the Group in late FY20 and FY21. This included a
reorganisation of the business in FY21 into market and client
facing business divisions with an increased focus on a more
comprehensive and solution-based service offering to clients.
Jaywing Australia has continued to perform strongly with net
revenues for the year of GBP4.2m, a 9% increase over 2020 and an
underlying growth in local currency of 6%.
FY22 Q1 Net Revenue to June 2021 (unaudited) amounted to
c.GBP5.9m. and represents a 23% increase over Q1 in FY21 of
GBP4.8m, demonstrating a continued year on year recovery in our Net
Revenue.
Strategy
In the short to medium term the Company plans to focus on
further organic growth with the support of recent new business wins
and a strong pipeline. The Company will also explore opportunities
for further investment in advanced data analysis products, the
application of technology to marketing challenges and related
people resources to support our data science led service offerings
to clients.
In Jaywing Australia we will continue to support a successful
and autonomous professional team with a track record of strong
financial performance to date. This will include ongoing
collaboration with the UK business on clients and services where
required. We are working with the Australian team to explore
opportunities to accelerate scale and market reach via further
local investment.
The Company remains in discussions with each of the holders of
the secured debt about a potential debt reorganisation. Details of
this debt are contained in Note 18 and Note 30.
Board
In April 2021 we announced the appointment of Caroline Ackroyd,
the Company's Chief Financial Officer to the Board. Caroline joined
the Company in September 2020 and has been closely involved with
the reorganisation of the business and its processes. Caroline is
an experienced CFO with significant commercial experience in
technology-based businesses operating in competitive and
client-centric markets.
People
Our staff have demonstrated their ability to adapt to
significant external challenges from the pandemic as well as
successfully adapting to the internal challenges of the business
restructuring and reorganisation in FY21. They have continued to
serve our customers without interruption as well as winning new
business. The Board would like to thank all our staff for their
ongoing hard work and dedication.
Ian Robinson
Non-Executive Chairman
* Adjusted EBITDA represents EBITDA before restructuring costs,
impairment charges and share based payment credits and fair value
movement on Put / Call options.
Chief Executive's Report
Overview
It has been an extraordinarily difficult twelve months for the
economy, the Group and the marketing sector, as a result of the
Covid-19 pandemic. However, whilst Net Revenue for FY21 was
expectedly lower than FY20 over the 12 months, I am delighted to
report that the business has continued to grow and progress from
the first half, with Net Revenues up 16% compared with the first 6
months of the year. The month of March 2021 saw Net Revenues 5%
ahead of March 2020, the first month to exceed pre-pandemic levels.
Underpinned by the cost realignment activities outlined in the
interim results, we have been able to rebuild profitability, with
adjusted EBITDA of GBP2.2m for the full year compared with the
previous year loss of GBP35k. Excluding the benefits of
covid-related salary sacrifice and government support, Adjusted
EBITDA increased from GBP88k in the first half to GBP613k in the
second half of the financial year, reflecting the progress we are
making.
This improvement in Net Revenue and underlying profitability has
continued in the first quarter of the new financial year, giving us
confidence for the year ahead.
Net cash generated from operations increased to GBP2.3m. This
was before the outlay of GBP1.9m in the year to acquire the final
25% of Massive Group Pty Ltd in Australia.
Throughout the pandemic restrictions, the business has continued
to operate successfully via a home-based model, and, although our
offices are now reopening, we expect to operate a hybrid of
office-based and home-based working moving forward.
Australia
In Australia, where the impact of Covid-19 in FY21 was less
pronounced, we delivered 9% year-on-year growth in Net Revenue
despite the pandemic, with second half Net Revenues up 37% on the
first half. This reflects both strong growth in new business and
also further development of our existing client relationships.
Notable wins included a contract to build 18 websites for Navitas,
the global education provider, a full service digital marketing
contract with CSR (building products) and performance marketing
contracts for Fiskars Group, Lyres (non-alcoholic spirits),
Princess Polly (apparel) and Noble Oak Insurance.
One impact of Covid-19 in Australia was the closing of its
borders, which has contributed to significant wage inflation in the
Sydney market, in particular, requiring careful cost management. We
are, nonetheless, continuing to deliver year-on-year Net Revenue
growth in FY22.
We have previously reported our intention to bring the two
Australian businesses together as "Jaywing Australia", and have now
restructured the management team to drive that. One of our senior
Australian directors, Chris Pittham, is stepping back from
day-to-day responsibilities to become a non-executive director of
the combined Australian business, with Tom Geekie assuming the role
of CEO for Australia, and Matt Barbelli becoming Chief Creative
Officer. I would like to thank Chris for his extraordinary
contribution, and am delighted that he will remain involved in the
business as a non-exec. Tom and Matt have identified significant
growth opportunities in the Australian market, and we are now
focusing on addressing those.
UK
In the UK, our three client-facing divisions all saw Net Revenue
growth in the second half compared with H1. The recovery has been
led by Retail, which increased by 15% in H2. Retail Net Revenues
were enhanced by new contract wins from La Redoute and Rohan
Designs, which will both mostly benefit the current financial year,
along with very resilient revenues from Euro Car Parts and
Yorkshire Water. By the end of the half, the monthly Net Revenue
run rate had recovered to exceed that of 12 months earlier, and in
FY22 we expect to see further growth from newly won contracts,
including Rush Hair & Beauty, and Cox Automotive. In our FMCG
division, the recovery of Net Revenue has been slightly slower at
12% increase in H2, although some clients have increased their
spend with us, notably Britvic and ACCA. In our Financial &
Professional Services division, H2 growth was initially slower, but
we exited Q4 with a strong run rate, ahead of pre-pandemic levels.
This was, fuelled by Net Revenue growth with first direct, HSBC and
National Bank of Kuwait International. This has been supported
further in the new financial year by a significant contract win
with Skipton Building Society, and a new umbrella agreement with
HSBC, which is underpinning continued Net Revenue growth.
The revised operating structure implemented last summer, which
focuses around core client sectors, is now enabling us to
cross-sell our services to the existing client base and also more
easily offer our broad portfolio of capabilities to new prospects.
For example, this has already resulted in sales of marketing
services to a Risk client, and risk modelling work to a client who
had previously only bought marketing services.
Focus on data
We are continuing to focus on developing our advanced data
capabilities, which support both our Risk business and our
Marketing Effectiveness proposition, giving us a distinct advantage
in the markets in which we operate. Our attribution modelling has
made significant contributions to clients such as Studio Retail,
Furniture & Choice, and Mazda UK. The application of technology
to marketing challenges is a key component of our strategy moving
forward, and we are investing in growing this revenue stream.
Employees
Our employees have risen to the challenge magnificently over the
last year, both in terms of personal sacrifice to protect the
business and adapting to remote working. Despite the 16% net
revenue reduction, Net Revenue per employee grew by 4% to GBP69.8k
for the full year (FY20: GBP66.9k), and Adjusted EBITDA per
employee reached GBP7.5k (FY20: loss of 0.1k).
I would like to thank all our colleagues in both the Australian
and UK businesses for their outstanding contributions over the last
12 months in particular.
Current trading
Having protected our cash and profitability through the
pandemic, we are now well positioned to focus on growth. The first
quarter of FY22 has been encouraging, with Net Revenue up 23% on
last year, several new clients, and a good pipeline of
opportunities.
Andrew Fryatt
Chief Executive Officer
Jaywing plc
24 August 2021
Strategic Review
Results
The results for the FY21 have been encouraging. Whilst there was
a general reduction in client activity following the outbreak of
the Covid-19 pandemic, leading to a 16% fall in Net Revenue for the
full year compared to the previous year, the Net Revenue run rate
had returned to pre-pandemic levels by the end of the year. March
2021 Net Revenue was GBP2.0m, an increase of 5% on March 2020. This
was the result of a number of new client wins and increased
spending by existing clients.
The Adjusted EBITDA profit amounted to GBP2.2m compared with an
adjusted EBITDA loss of GBP35k for the prior year.
The statutory operating profit was GBP91,000 (2020: operating
loss of GBP8,874,000) and the statutory loss before taxation was
GBP360,000 (2020: loss before taxation of GBP9,392,000).
Cashflow generated from operations amounted to GBP2.3m compared
with GBP1.0m for the prior year. The cashflow 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:
2021 2020
GBP'000 GBP'000
Net Revenue* 20,165 24,043
--------- ---------
Adjusted EBITDA** 2,181 (35)
--------- ---------
Adjusted EBITDA % 10.8% (0.1%)
--------- ---------
Net Debt post IFRS16*** (7,586) (5,943)
--------- ---------
Average headcount 289 360
--------- ---------
Net revenue per head 69.8 66.8
--------- ---------
Cash generated from
operations 2,258 953
--------- ---------
Client numbers at year
end 173 162
--------- ---------
* Revenue less third-party direct costs of sale
** Adjusted EBITDA represents EBITDA before restructuring costs,
impairment charges, share based payment credits and fair value
movement on Put / Call options
*** Including accrued interest
Net Debt
At 31 March 2021, Net Debt including accrued interest (pre
IFRS16) was GBP7.6m (2020: GBP5.9m) and was represented by The
Jaywing Facility (as described in Note 30 and Note 18) of GBP8.3m
less cash of GBP0.7m.
On 21 October 2020, $3.0m (GBP1.7m) of funds generated by and
retained in the Australian business were used as part payment of
the Massive Group put option. Further details of the settlement of
this put option are provided below.
Restructuring Plan
In August 2019 the Board appointed a consulting firm to assist
with the preparation of a restructuring plan to realign the
business more closely to its clients and its service offerings with
a view to significantly improving post restructuring monthly EBITDA
and cash flow run rates of the business. This review resulted in a
detailed implementation plan (the "Restructuring Plan") which was
implemented during the latter part of FY20 and continued into FY21
under the leadership of Andrew Fryatt, who was appointed as CEO at
the end of March 2020. The Restructuring Plan is now complete, and
costs related to this plan incurred during FY21 amounted to
GBP488k, principally relating to staff redundancies.
Australia
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 excerciseable 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.GBP2.2m), comprising $3.0m (c.GBP1.66m)
payable immediately, followed by a series of monthly payments
totalling $1.0m (c.GBP0.5m) between the acquisition date and June
2021. At 31 March 2021 the outstanding balance was $0.5m (c
GBP0.3m) 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. GBP5.4m).
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% (2020: 10.9%). 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, following the
reorganisation of the UK operations into one business unit and
Australia. Growth rates were assumed at 7.5% for the financial year
22/23 and 23/24, and then at 2.5% for the following periods, these
are below Group forecasts for the periods.
As a result of these calculations the Board has concluded that
no goodwill impairment was required for the year (2020:
GBP5,468k).
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.
With no movement in EBIDTA a movement of 0.5% to 12% in the WACC
rate gave the result of no impairment, a movement by 1% to 12.5%
gave rise to no impairment. Keeping the WACC rate at 11.5% and
reducing EBITDA by 5% gave rise to no impairment, a reduction of
EBITDA by 10% gave rise to no impairment. The final test was an
increase in WACC by 1% to 12.5% and a reduction in EBITDA by 10%,
this gave rise to an impairment of GBP2,313k.
As part of the restructuring we have retired the Epiphany brand
in the year, this resulted in an impairment to the carrying value
of the trademark of GBP690k in the reported 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 GBP696k to the profit and loss in the period. No further
balance remains.
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 the potential impact of
Covid-19 on the cash flows of the Group for a period to 31 March
2023. 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.
Since March 2020, the economic impact of Covid-19 has resulted
in revenue levels below those of the prior year, although we have
been able to provide continuous service to our clients during this
period. The Group has taken actions to protect both cash and
profitability through this period, including voluntary salary
reductions, and taking advantage of the Government Job Retention
Scheme and VAT payment deferral. The Group has continued to win new
work through the period, and as we come to the end of the year, we
have seen revenue levels return to pre-pandemic levels with a
period of continued growth on the back of the new client wins and
increased spend from existing clients.
At the beginning of the financial year being reported, the
impact of Covid-19 indicated the existence of a degree of
uncertainty which cast significant doubt, as with many other
organisations, about the Group's ability to continue as a going
concern. 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. 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.
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 2021.
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 2021
was GBP0.2m (2020: loss of GBP9.0 million). The Directors do not
propose to pay a dividend.
Net assets at 31 March 2021 were GBP21.2m (2020: GBP22.2m)
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 GBP3k and no political
donations during the year (2020: GBPNil).
Directors' interests
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 10 August 2021, 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:
2021 2020
Number of voting
rights % %
Lord Michael Ashcroft 23,919,737 25.6 25.6
Lombard Odier Investment Managers
Group 22,020,709 23.6 23.6
J & K Riddell 5,372,638 5.8 5.8
A Gardner 5,034,470 5.4 5.4
M Boddy 5,016,667 5.4 5.4
Bailey Family 4,687,500 5.0 4.3
Canaccord Genuity Group Inc 3,805,000 4.1 -
Miton UK Microcap Trust plc 3,569,249 3.8 3.8
H & J Spinks 3,508,772 3.8 3.8
Section 172 statement
The Directors are required by the Companies Act 2006 to act in
the way they consider, in good faith, would be most likely to
promote success of the Company for the benefit of its stakeholders
as a whole and in doing so are required to have 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;
-- 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 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 Chairman's
Statement.
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.
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.
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 2020 to 31 March 2021 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 2020/21 (tCO2e)
Direct emissions (Scope 1) - natural gas
and LPG 53,625
----------------
Indirect emissions (Scope 2) - from purchases
electricity 62,450
----------------
Total tCO2e (Scope 1 & 2) 116,075
----------------
Other indirect emissions (Scope 3) - grey
fleet travel 1,269
----------------
Gross Total Emissions 117,344
----------------
Intensity metric (Gross Emissions): Tonnes
of CO2e per employee 457
----------------
Total energy consumption (kWh) 586,891
----------------
Energy Efficiency
As an office-based business, our environmental impact is
relatively 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
-- encourage the use of remote working facilities to avoid
travelling where possible, particularly in the past year where the
effect of Covid-19 has meant that our offices have been closed and
travel has reduced by over 97%
-- 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.
General Meeting
Your attention is drawn to the Notice of Meeting either enclosed
with the Annual Report or online at https://investors.jaywing.com,
which sets out the resolutions to be proposed at the forthcoming
General Meeting.
Auditor
The Directors at the date of approval of the Annual Report
confirm that:
-- so far as each Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- the Directors have taken all the steps that they ought to
have taken as Directors, in order to make themselves aware of any
relevant audit information and to establish that the Company's
auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Companies Act
2006.
The auditor, Grant Thornton UK LLP, has indicated its
willingness to remain in office, and a resolution that it be
re-appointed will be proposed at the General Meeting.
By Order of the Board
Andrew Fryatt
Director
Dated: 24 August 2021
Directors' Remuneration Report
In preparing this report, we have followed the QCA's Corporate
Code of Governance and drawn on best practice available, as well as
those aspects of the UK Corporate Governance Code that we consider
to be relevant to the Group.
The Remuneration Committee
During the year the Remuneration Committee comprised:
Philip Hanson (Chairman)
Ian Robinson
Mark Carrington
The 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 take into account pay
awards made elsewhere in the Group as well as external market
benchmarking.
During the year to 31 March 2021 there was one Executive
Director on the Board as follows:
Andrew Fryatt (Chief Executive) - Appointed 21 April 2020
Caroline Ackroyd (Chief Financial Officer) was appointed to the
board on 21 April 2021, after the year end.
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 receives an annual fee of GBP50,000. Non-Executive
Directors' fees currently comprise a basic fee of GBP30,000 per
annum plus GBP10,000 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 taking into
account the responsibilities, individual performance and experience
of the Executive Directors, as well as the market practice for
executives in a similar position. Basic salary is reviewed (but not
necessarily increased) annually by the Remuneration Committee.
Annual bonus plan
The Executive Directors are eligible to participate in the
annual bonus plan. The range of award is based on annual
salary.
The performance requirements, for the ability to earn a bonus,
are set by the Committee annually.
Directors' remuneration
The total amounts of the remuneration of the Directors of the
Group for the years ended 31 March 2021 and 2020 are shown
below:
31 March 2021 2020
GBP GBP
Aggregate emoluments 276,897 732,939
Sums paid to third parties
for Directors' services 27,500 30,000
---------------------------- -------- --------
304,397 762,939
---------------------------- -------- --------
The emoluments of the Directors are shown below:
31 March 2021 2021 2021 2021 2020 2021 2020
Fees Benefits
and in Pension Pension
salary kind Bonus Total Total contributions contributions
GBP GBP GBP GBP GBP GBP GBP
Resigned
Martin 27 January
Boddy 2020 - - - - 147,416 - 16,461
Resigned
Michael 24 March
Sprot 2020 - - - - 111,954 38,712
Resigned
Robert 26 March
Shaw 2020 - - - - 237,538 - 19,795
Resigned
Adrian 20 December
Lingard 2019 - - - - 146,031 - 12,169
Appointed
Andrew 21 April
Fryatt 2020 194,051 - - 194,051 - 13,712 -
Mark Carrington 27,500 - - 27,500 30,000 - -
Ian Robinson 46,025 - - 46,025 50,000 - -
Philip
Hanson 36,821 - - 36,821 40,000 - -
Total 304,397 - - 304,397 762,939 13,712 87,137
---------------------------------- -------- --------- ------ -------- -------- --------------- ---------------
paid to a third party for the Director's services
The salary of the highest paid Director was 4.7 times the
average salary of all Group employees excluding the Directors in
the table above (2020: 5.6 times).
During the 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
Director. 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:
Company with
Date of contract Date of appointment Notice period whom contracted
Andrew Fryatt 26 March 2020 21 April 2020 6 months Jaywing plc
7 September
Caroline Ackroyd 2020 21 April 2021 6 months 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:
Company with whom
Date of contract Notice period contracted
Ian Robinson 21 May 2014 3 months Jaywing plc
27 April
Philip Hanson 2017 3 months Jaywing plc
21 March
Mark Carrington 2018 3 months Jaywing plc
Directors' interests in shares
The Directors' interests in the share capital of the Company are
set out below:
31 March 2021 2020
Number of shares Number of shares
Ian Robinson 470,267 470,267
Philip Hanson 109,462 109,462
Andrew Fryatt 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: 24 August 2021
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 are able to
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 2021, 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 21 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 21 April
2021.
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 pay rises, bonus payments or
share options during the year.
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 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.
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 2021:
Board Remuneration Audit & Risk Nomination
--------------------- ------ ------------- ------------- -----------
Total meetings held 11 4 2 1
--------------------- ------ ------------- ------------- -----------
Ian Robinson 11 4 2 1
Philip Hanson 11 4 2 1
Mark Carrington 11 4 2 1
Andrew Fryatt 11 4 2 1
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
It is intended that the Audit Committee receives regular reports
from the auditor and assures itself that the internal control
environment of the Group is operating effectively. There are formal
policies and procedures in place to ensure the integrity and
accuracy of the accounting records and to safeguard the Group's
assets. Significant capital projects and acquisitions and disposals
require Board approval.
Corporate Social Responsibility
The Board recognises the 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
Caroline Ackroyd
Dated: 24 August 2021
Directors' Responsibilities Statement
The Directors are responsible for preparing the Directors'
Report, the Strategic Report and the Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have to prepare the financial statements in accordance with
international financial reporting standards in conformity with the
requirements of the Companies Act 2006. Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs and profit or loss of the company and group for that
period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable international financial reporting
standards in conformity with the requirements of the Companies Act
2006 have been followed, subject to any material departures
disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and the
Company's transactions, and disclose with reasonable accuracy, at
any time, the financial position of the Group and the Company and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Group and the Company and hence, for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
By Order of the Board
Andrew Fryatt
Dated: 24 August 2021
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2021 2020
Note GBP'000 GBP'000
Revenue 1 25,957 29,723
Direct Costs (5,792) (5,680)
-------- --------
Net Revenue 1 20,165 24,043
Other operating income 2 793 38
Operating expenses 3 (20,867) (32,955)
-------- --------
Operating Profit / (loss) 91 (8,874)
-------- --------
Finance costs 4 (451) (518)
-------- --------
Net financing costs (451) (518)
-------- --------
Loss before tax (360) (9,392)
Tax credit 5 119 436
-------- --------
Loss for the year (241) (8,956)
Loss for the year is attributable
to:
Non-controlling interests 71 188
Owners of the parent (312) (9,144)
-------- --------
(241) (8,956)
Other comprehensive income
Items that will be reclassified
subsequently to profit
or loss
Exchange differences on
retranslation of foreign
operations 27 (6) (155)
Total comprehensive income
for the period (247) (9,111)
-------- --------
Total comprehensive income
is attributable to:
Non-controlling interests 26 71 188
Owners of the Parent (318) (9,299)
-------- --------
(247) (9,111)
Basic loss per share
Loss per share 6 (0.34p) (9.95p)
Total (0.34p) (9.95p)
The accompanying Notes form part of these Consolidated Financial
Statements.
Consolidated Balance Sheet
As at 31 March 2021 2020
Note GBP'000 GBP'000
Non-current assets
Property, plant and equipment 12 2,060 2,887
Goodwill 14 29,789 27,586
Other intangible assets 15 799 2,604
-------- --------
32,648 33,077
-------- --------
Current assets
Trade and other receivables 16 6,214 5,229
Contract assets 17 619 648
Current tax asset 474 391
Cash and cash equivalents 18 752 1,996
-------- --------
8,059 8,264
-------- --------
Total assets 40,707 41,341
-------- --------
Current liabilities
Borrowings 18 8,338 7,939
Trade and other payables 19 8,065 7,498
Contract Liabilities 17 1,163 949
Current lease liabilities 13 666 678
Current tax liabilities 194 106
Provisions 19 42 42
-------- --------
18,468 17,212
-------- --------
Non-current liabilities
Non-current lease liabilities 13 877 1,515
Deferred tax liabilities 20 113 422
-------- --------
990 1,937
-------- --------
Total liabilities 19,458 19,149
-------- --------
Net assets 21,249 22,192
-------- --------
Equity
Equity attributable to owners
of the parent
Share capital 21 34,992 34,992
Share premium 21 10,088 10,088
Capital redemption reserve 24 125 125
Shares purchased for treasury 23 (25) (25)
Share option reserve 25 - 696
Foreign currency translation
reserve 27 (161) (155)
Retained earnings 28 (24,124) (24,868)
-------- --------
Equity attributable to owners
of the parent 20,895 20,853
Non-controlling interest 26 354 1,339
Total equity 21,249 22,192
-------- --------
These Financial Statements were approved by the Board of
Directors on 24 August 2021 and were signed on its behalf by:
Andrew Fryatt
Director
Company number: 05935923
The accompanying Notes form part of these Consolidated Financial
Statements.
Consolidated cash flow statement
For the year ended 31 March 2021 2020
Note GBP'000 GBP'000
Cash flow from operating activities
Loss after tax (241) (8,956)
Adjustments for:
Depreciation of property, plant & equipment 259 331
Depreciation of right of use assets 666 666
Amortisation of intangibles 1,118 1,547
Impairment of goodwill - 5,468
Impairment of other intangibles 690 321
Financial expenses 451 518
Fair value movement of put / call option (435) 123
Share-based payment expense 3 (696) (484)
Taxation charge (119) (436)
------- -------
Operating cash flow before changes in working
capital 1,693 (902)
(Increase) / Decrease in trade and other
receivables (901) 2,428
Increase / (Decrease) in trade and other
payables 1,466 (573)
------- -------
Cash generated from operations 2,258 953
Interest paid (74) (279)
Tax paid (376) (309)
------- -------
Net cash flow from operating activities 1,808 365
------- -------
Cash flow from investing activities
Payment of deferred consideration (377) (325)
Acquisition of intangible assets (3) (108)
Acquisition of non-controlling interest (1,925) -
Acquisition of property, plant and equipment 12 (98) (66)
------- -------
Net cash outflow from investing activities (2,403) (499)
------- -------
Cash flow from financing activities
Increase in borrowings 18 - 7,700
Repayment of borrowings 18 - (5,650)
Repayment of Lease Liabilities (IFRS16) 13 (649) (610)
Net cash inflow / (outflow) from financing
activities (649) 1,440
------- -------
Net (decrease) / increase in cash and cash
equivalents (1,244) 1,306
Cash and cash equivalents at beginning of
year 1,996 690
------- -------
Cash and cash equivalents at end of year 752 1,996
------- -------
Cash and cash equivalents comprise:
Cash at bank and in hand 752 1,996
The accompanying Notes form part of these Consolidated Financial
Statements.
Consolidated statement of changes in equity
Foreign
Share Capital Share Currency Equity
Share Premium Redemption Treasury Option Translation Retained attributable Non-controlling Total
Capital Account Reserve Shares Reserve Reserve Earnings to parent Interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Balance at 31
March
2019 34,992 10,088 125 (25) 838 - (15,889) 30,129 1,151 31,280
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Charge in
respect
of
share-based
payments - - - - 23 - - 23 - 23
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Transactions
with
owners - - - - 23 - - 23 - 23
Profit/(loss)
for
the period - - - - - - (9,144) (9,144) 188 (8,956)
Transfer in
relation
to lapsed
share
options - - - - (165) - 165 - - -
Retranslation
of
foreign
currency - - - - - (155) - (155) - (155)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
income for
the period - - - - (165) (155) (8,979) (9,299) 188 (9,111)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Balance at 31
March
2020 34,992 10,088 125 (25) 696 (155) (24,868) 20,853 1,339 22,192
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Acquisition of
Subsidiaries - - - - - - 1,056 1,056 (1,056) -
Charge in
respect
of share-based
payments - - - - - - - - - -
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Transactions
with
owners - - - - - - 1,056 1,056 (1,056) -
Profit/(loss)
for
the period - - - - - - (312) (312) 71 (241)
Transfer in
relation
to lapsed
share
options - - - - (696) - - (696) - (696)
Retranslation
of
foreign
currency - - - - - (6) - (6) - (6)
Total
comprehensive
income for
the period - - - - (696) (6) (312) (1,014) 71 (943)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Balance at 31
March
2021 34,992 10,088 125 (25) - (161) (24,124) 20,895 354 21,249
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
The accompanying Notes form part of these Consolidated Financial
Statements.
Principal Accounting Policies
Jaywing plc is a Company incorporated in the UK and is AIM
listed.
The Consolidated Financial Statements consolidate those of
Jaywing plc and its subsidiaries (together referred to as the
'Group').
The Consolidated Financial Statements have been prepared and
approved by the Directors in accordance with International
accounting standards in conformity with the Companies Act 2006. 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.
The summary accounts set out above do not constitute statutory
accounts as defined by section 434 of the Companies Act 2006. The
Consolidated Statement of Comprehensive Income, the Consolidated
Balance Sheet, the Consolidated Statement of Cash Flows, the
Consolidated Statement of Changes in Equity and the Notes to the
Financial Statements for the year the ended 31 March 2021 have been
extracted from the Group's statutory financial statements upon
which (i) the auditor's opinion is unqualified and (ii) did not
contain a statement under either sections 498(2) or 498 (3) of the
Companies Act 2006. The audit report for the year ended 31 March
2020 did not contain statements under section 498(2) or 498 (3) of
the Companies Act 2006. The statutory financial statements for the
year ended 31 March 2020 have been delivered to the Registrar of
Companies. The 31 March 2021 accounts were approved by the
directors on 24 August 2021, but have not yet been delivered to the
Registrar of Companies.
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
individual companies with the group and a consolidated position for
the group, the board has also considered the potential impact of
Covid-19 on the cash flows of the group for the assessed period to
31 March 2023. 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.
Since March 2020, the economic impact of Covid-19 has resulted
in revenue levels below those of the prior year, although we have
been able to provide continuous service to our clients during this
period. The Group has taken actions to protect both cash and
profitability through this period, including voluntary salary
reductions, rent deferrals and taking advantage of Government
schemes for job retention and VAT payment deferral. The Group has
continued to win new work through the period, and it remains on
track to improve its performance year on year building on the
restructure started in late 2019.
At the beginning of the financial year being reported, the
impact of Covid-19 indicated the existence of a degree of
uncertainty which cast significant doubt, as with many other
organisations, about the Group's ability to continue as a going
concern. 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. 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.
We recognise revenue and net revenue in the financial
statements, net revenue is defined as revenue recognised against a
client less any direct third party costs, where we act as principal
in the transaction, based on the control which the group holds over
the services provided.
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 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, each with different
performance obligations, such as PPC and SEO management, which will
have agreed KPIs. These services will be set out in the contract
with revenue amounts associated and the revenue streams will be
recognised separately.
The transaction price is set out in the contract for each
service provided and revenue is allocated to the various
performance obligations on this basis. The customer may choose to
take additional services for a period of time, which would be
subject to a separate agreement. Any performance fees payable under
a contract would relate to a specific month and be calculated in
line with the provisions set out in the contract.
Revenue is recognised over time as the customer simultaneously
receives and consumes the benefits of the services as the service
is performed. It is recognised using the output method, on a
straight-line basis over the life of the contract as the amount of
work required to perform under these contracts does not vary
significantly from month to month, therefore the straight-line
method provides a faithful depiction of the transfer of goods or
services.
Project-based
A client will enter into a framework agreement 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. The customer
may choose to vary the scope at any stage, and that would be
subject to an updated work order. That work order would still be
part of the original contract as those services would not be
distinct from those in the original contract.
Revenue is recognised over time, using the input method as
Jaywing's performance creates or enhances an asset that the
customer controls as the asset is created or enhanced, and the
revenue recognised reflects the efforts or inputs Jaywing has made
to the satisfaction of the performance obligation.
Consulting day rates
A client will enter into a contract for a piece of work that is
quoted as a number of days charged at a rate per day. This work
will be either risk, marketing or data based and could involve
building models, databases and analysis of data. Invoices will
usually be raised monthly for the number of days of work
performed.
A specific piece of work is contracted for, which will normally
be a number of days' work charged at a rate per day, with different
rates for different levels of seniority. The transaction price is
set out in the contract. The customer may choose to vary the scope
at any stage, and that would be subject to an updated work
schedule. That work order would still be part of the original
contract as those services would not be distinct from those in the
original contract.
Revenue is recognised over time as the customer simultaneously
receives and consumes the benefit of the services as the services
are performed. It is recognised using the input method, based on
the number of days' work performed during the month.
Licences
A client enters into a contract for a product licence, including
support from Jaywing, to run that product and interpret the results
from it. The product and support are not separately identifiable
because the client is not able to operate the product licence
without this support as they do not have the skills or a login to
the system. 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.
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.
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 31 to the Consolidated Financial Statements.
Classification of instruments issued by the Group
Instruments issued by the Group are treated as equity (i.e.
forming part of shareholders' funds) only to the extent that they
meet the following two conditions:
-- they include no contractual obligations upon the Company (or
Group as the case may be) to deliver cash or other financial
assets, or to exchange financial assets or financial liabilities
with another party, under conditions that are potentially
unfavourable to the Company (or Group); and
-- where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments, or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the items are
classified as a financial liability. Where the instrument so
classified takes the legal form of the Company's own shares, the
amounts presented in these Financial Statements for called up Share
Capital and Share Premium Account exclude amounts in relation to
those shares.
Finance payments associated with financial liabilities are dealt
with as part of finance expenses. Finance payments associated with
financial instruments that are classified in equity are dividends
and are recorded directly in equity.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Depreciation is charged to profit or loss on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. Land is not depreciated. The
estimated useful lives are as follows:
Leasehold improvements - over period of lease
Office equipment - 3 - 5 years
Buildings - 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.
The estimated useful lives are as follows:
Customer relationships - 4 to 12 years
Development costs - 3 to 6 years
Trademarks - 2 to 20 years
Order books - 1 year
Impairment
For goodwill that has an indefinite useful life, the recoverable
amount is estimated annually. For other assets, the recoverable
amount is only estimated when there is an indication that an
impairment may have occurred. The recoverable amount is the higher
of fair value less costs to sell and value in use. Value in use is
determined by assessing net present value of the asset based on
future cash flows.
An impairment loss is recognised whenever the carrying amount of
an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-generating
units, are allocated first to reduce the carrying amount of any
goodwill allocated to the cash-generating unit and then to reduce
the carrying amount of the other assets in the unit on a pro rata
basis. A cash generating unit is the smallest identifiable group of
assets that generates cash inflows that are largely independent of
the cash inflows from other assets or groups of assets. With the
exception of goodwill, all assets are subsequently reassessed for
indications that an impairment loss previously recognised no longer
exists.
Put/call options
The put/call options in Frank Digital PTY have been valued by an
independent assessor and are recognised with both a service and
non-service element in the accounts. The non-service element is
fully recognised as at the date of acquisition and the fair value
reviewed annually. The service element is treated as a cash-settled
share-based payment with the share-based payment valued at the
point of inception and the cost being spread over the life of the
asset.
Fair value measurement
Management uses valuation techniques to determine the fair value
of financial instruments and non-financial assets. This involves
developing estimates and assumptions consistent with how market
participants would price the instrument. Management bases its
assumptions on observable data as far as possible, but this is not
always available. In that case, management uses the best
information available. Estimated fair values may vary from the
actual prices that would be achieved in an arm's length transaction
at the reporting date (see Note 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.
Share-based payment transactions
The weighted average fair value for the EBITDA performance
options was calculated using the Black-Scholes Merton Option
Pricing Model, and the fair value for the share price options was
calculated using the Monte Carlo Model. This is charged to profit
or loss over the vesting period of the award. The charge to profit
or loss takes account of the estimated number of shares that will
vest. Where the options do not have any market conditions attached,
the number expected to vest is reassessed at each reporting period.
All share-based remuneration is equity-settled. Provision is made
for National Insurance when the Group is committed to settle this
liability. The charge to profit or loss takes account of the
options expected to vest, is deemed to arise over the vesting
period, and is discounted. The remaining share based payment
schemes were terminated in October 2020.
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.
Expenses
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 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:
-- the initial recognition of goodwill;
-- the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit other than in a business
combination;
-- differences relating to investments in subsidiaries to the
extent that they will probably not reverse in the foreseeable
future.
The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of
assets and liabilities, using tax rates enacted or substantively
enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised.
Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank borrowings that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
statement of cash flows.
Trade and other receivables
IFRS 9's impairment requirements use more forward-looking
information to recognise expected credit losses - the 'expected
credit loss (ECL) model'. This replaced IAS 39's 'incurred loss
model'.
Recognition of credit losses is no longer dependent on the Group
first identifying a credit loss event. Instead the Group considers
a broader range of information when assessing credit risk and
measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the
expected collectability of the future cash flows of the
instrument.
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected
life of the financial instrument.
Financial 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 reports its business activities in three client-facing
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 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.
Significant management judgement
The following are significant management judgements in applying
the accounting policies of the Company that have the most
significant effect on the financial statements.
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.
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.
Accounting estimates and judgements
Accounting estimates
Impairment of goodwill and other intangible assets
The carrying amount of goodwill is GBP29,789k (2020: GBP27,586k)
and the carrying amount of other intangible assets is GBP799k
(2020: GBP2,604k). 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 assumes the credit risk. Where this is
via an agency arrangement and the Group assumes the credit risk for
all billings, it therefore recognises gross billings as revenue.
For other income sources, revenue recognition is assessed in line
with the five steps of IFRS.
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.
Put / Call Option
The put/call options in Frank Digital PTY have been valued by an
independent assessor and are recognised with both a service and
non-service element in the accounts. The non-service element is
fully recognised as at the date of acquisition and the fair value
reviewed annually. The service element is treated as a cash-settled
share-based payment with the share-based payment valued at the
point of inception and the cost being spread over the life of the
asset.
Identification of performance obligations
The determination of the number of distinct performance
obligations in a contract requires judgement, based on whether the
customer can benefit from use of the service on its own or together
with other resources that are readily available to it, and also
whether the promise to transfer the service is separately
identifiable from other promises in the contract. As explained in
the accounting policy for revenue, contracts usually include just
one distinct performance obligation.
Allocation of the transaction price to performance
obligations
Where a contract contains multiple performance obligations, the
transaction price is required to be allocated to the different
performance obligations. Wherever possible, the transaction price
is allocated on a standalone selling price basis, by reference to
the agreed customer statement of works. In the event that this is
not available, the price is allocated to the various performance
obligations on a reasonable basis with reference to the expected
time involved in performing the service and management's experience
of similar projects.
Notes to the Consolidated Financial Statements
1. Segmental analysis
During the year 2020/21, the Group reported its operations by
client-facing market segments (Retail, FMCG, Financial &
Professional Services), reflecting the revised operating divisions
of the Group.
During the year, no customer accounted for greater than 10% of
the Group's revenue (2020: None).
Group Net Revenue by Client Facing Operating Segments
2021 2020
GBP'000 GBP'000
Retail 7,337 8,686
FMCG 6,317 7,776
Financial & Professional Services 6,511 7,581
------- -------
20,165 24,043
------- -------
"Retail" includes: Retail, Travel & Leisure, Hospitality,
Property & Utilities
"FMCG" includes: Consumer Goods, Industrial, Telecoms, Support
Services, Healthcare, Education, Public Sector & Non-Profit
"Financial & Professional Services " includes: Financial
& Professional Services
Net Revenue by Geographic Markets
2021 2020
GBP'000 GBP'000
United Kingdom 15,969 20,180
Australia 4,196 3,863
------- -------
20,165 24,043
------- -------
All revenue is recognised over time.
Net Revenue is defined as revenue less third-party direct costs
of sale. Revenue in the UK was GBP21,706k (2020: GBP25,810k), and
in Australia GBP4,251k (2020: GBP3,913k).
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:
2021 2020
GBP'000 GBP'000
United Kingdom 32,554 32,963
Australia 94 114
------- -------
32,648 33,077
------- -------
Non-current assets are allocated based on their physical
location.
2. Other operating income
2021 2020
GBP'000 GBP'000
Other operating income 793 38
------- -------
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
GBP451,000. Under the corresponding scheme in Australia, Cashflow
boost and Job Keepers, the Group received GBP330,000. Of the
GBP781,000 received in the year to March 2021, GBP601,000 was
received in the six month period to September 2020.
Other operating 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 a
further distribution of GBP12,000 (2020: GBP38,000). It is
anticipated there may be further distributions in the future but
the Board is unaware of the quantum or timing of these potential
receipts.
3. Operating expenses
2021 2020
Continuing operations: GBP'000 GBP'000
Wages and salaries 13,135 16,511
Social Security Costs 1,267 1,793
Other Pension Costs 707 1,021
Share-based payments credits (696) (484)
Fair value movement on put / call option (435) 123
Depreciation of property, plant & equipment 259 331
Depreciation of right of use assets 666 666
Restructuring costs 488 867
Amortisation 1,118 1,547
Impairment to the carrying value of goodwill - 5,468
Impairment of other intangible assets 690 321
Other operating expenses 3,668 4,791
------- -------
Total operating expenses 20,867 32,955
------- -------
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 fair value movement in put / call option in 2021 relates to
the crystallisation of a gain on the acquisition of the remaining
25% of Massive Group PTY Ltd and a movement in relation to the fair
value measurement of the Frank Digital PTY Ltd put / call
option.
4. Finance costs
2021 2020
GBP'000 GBP'000
Interest expense 403 404
Interest on lease liabilities (see note 13) 74 101
Fair values finance charge / (credit) on Put
/ Call option (26) 13
------- -------
Total 451 518
------- -------
5. Tax credit
2021 2020
GBP'000 GBP'000
Recognised in the consolidated statement of
comprehensive income:
Current year tax 224 (193)
Origination and reversal of temporary differences (343) (243)
------- -------
Total tax credit (119) (436)
------- -------
Reconciliation of total tax charge:
Loss before tax (360) (9,392)
------- -------
Taxation using the UK Corporation Tax rate of
19% (2019: 19%) (68) (1,784)
Effects of:
Non-deductible expenses (51) 1,348
Total tax credit (119) (436)
------- -------
6. Loss per share
2021 2020
Pence per Pence per
Share Share
Basic loss per share (0.34p) (9.95p)
Diluted loss per share (0.34p) (9.95p)
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:
2021 2020
GBP'000 GBP'000
Loss for the year attributable to shareholders (318) (9,299)
Weighted average number of ordinary shares in issue:
2021 2020
Number Number
Basic 93,432,217 93,432,217
Adjustment for share options - 3,243,178
Diluted 93,432,217 96,675,395
---------- ----------
7. Auditor's remuneration
2021 2020
GBP'000 GBP'000
Auditor's remuneration:
Audit of Company Financial Statements 40 37
Other amounts payable to the auditor and its
associates in respect of:
Audit of Subsidiary Company Financial Statements 97 90
Audit related assurance services 4 4
Taxation compliance services 30 28
Taxation advisory services 66 44
------- -------
Amounts paid to the Group's auditor in respect of services to
the Company, other than the audit of the Company's Financial
Statements, have not been disclosed separately as the information
is required instead to be disclosed on a consolidated basis. In
addition to last year's reported audit figures an amount was agreed
and paid to cover over-runs of GBP40,000, making the total payable
in relation to the audit GBP167,000.
8. Key management personnel compensation
Key management of the Group is considered to be the Board of
Directors and the Senior Leadership Team.
2021 2020
GBP'000 GBP'000
Short-term benefits:
Salaries including bonuses 1,429 1,912
Social security costs 182 246
Total short-term benefits 1,611 2,158
Share-based payment credit (696) (484)
Defined contribution pension plan costs 103 190
Key management compensation 1,018 1,864
------- -------
Further information in respect of Directors is given in the
Directors' Remuneration Report.
Remuneration in respect of Directors was as follows:
2021 2020
GBP'000 GBP'000
Emoluments receivable 276 733
Fees paid to third parties for Directors' services 28 30
Company pension contributions to money purchase
pension schemes 14 87
------- -------
318 850
------- -------
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 GBP208,000
(2020: GBP257,000).
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:
2021 2020
Number Number
Management and administration 44 73
Client Service Staff 245 287
289 360
------ ------
The aggregate payroll costs of these persons were as
follows:
2021 2020
GBP'000 GBP'000
Wages and salaries 13,135 16,511
Social security costs 1,267 1,793
Other pension costs 707 1,021
Share option (credits) - PSP Options (see Note
10) (588) (409)
Share option (credits) - Employers NI (see Note
10) (108) (75)
------- -------
14,413 18,841
------- -------
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:
2021 2020
Weighted Weighted
average average
Number of exercise Number of exercise
share options price share options price
At start of the year 3,301,200 5.0p 6,169,926 5.0p
Issued during the year - 5.0p - 5.0p
Exercised during the year - 5.0p - 5.0p
Lapsed during the year (3,301,200) 5.0p (2,868,726) 5.0p
At end of the year - 5.0p 3,301,200 5.0p
-------------- --------- -------------- ---------
Exercisable at end of year - 5.0p 850,865 5.0p
-------------- --------- -------------- ---------
The share options scheme was terminated in October 2020.
Share options outstanding at the year-end were as follows:
As at 31 March 2021
Period of exercise
Number Exercise price From To
- - - -
As at 31 March 2020
Period of exercise
Number Exercise price From To
3,301,200 5.0p 01/04/2017 30/09/2022
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 2021 this
resulted in a credit to the P&L of GBP696k.
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 Massive Group Pty in October
2020, the Group includes one subsidiary (2020: two) with material
non-controlling interests (NCI):
Name Proportion of ownership Total comprehensive
interests and voting income allocated Accumulated NCI
rights held by NCI to NCI
2021 2020 2021 2020 2021 2020
% % GBP'000 GBP'000 GBP'000 GBP'000
Massive Group
PTY - 25 - 147 - 1,056
Frank Digital
PTY 25 25 71 41 354 283
---------- ---------- --------- ---------
71 188 354 1,339
---------- ---------- --------- ---------
No dividends were paid to the NCI during the financial years
2021 and 2020.
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 (GBP2.2m), the
total consideration for the purchase of the 100% interest was $9.6m
(GBP5.4m). At 31 March 2021 an amount of GBP0.3m was still
outstanding to the original shareholders, this was fully paid by 30
June 2021.
12. Property, plant and equipment
Leasehold Office
Buildings improvements equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April 2019 - 1,438 1,411 2,849
Additions - 66 66
Recognition of right
of use assets 2,673 - 130 2,803
Disposals - - (432) (432)
At 31 March 2020 2,673 1,438 1,175 5,286
Additions - - 98 98
Disposals - - (679) (679)
--------- ------------- ----------- -------
At 31 March 2021 2,673 1,438 594 4,705
--------- ------------- ----------- -------
Depreciation
At 1 April 2019 - 1,018 816 1,834
Depreciation charge
for the year - 40 291 331
Depreciation of right
of use assets 640 - 26 666
Depreciation on disposals - - (432) (432)
--------- ------------- ----------- -------
At 31 March 2020 640 1,058 701 2,399
Depreciation charge
for the year - 67 192 259
Depreciation of right
of use asset 640 - 26 666
Depreciation on disposals - - (679) (679)
--------- ------------- ----------- -------
At 31 March 2021 1,280 1,125 240 2,645
--------- ------------- ----------- -------
Net book value
At 31 March 2021 1,393 313 354 2,060
--------- ------------- ----------- -------
At 31 March 2020 2,033 380 474 2,887
--------- ------------- ----------- -------
At 1 April 2019 - 420 595 1,015
--------- ------------- ----------- -------
The assets are covered by a fixed charge in favour of the
Group's lenders.
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:
2021 2020
GBP'000 GBP'000
Right of use assets
Buildings 1,393 2,033
Plant and machinery 78 104
------- -------
1,471 2,137
======= =======
Lease liabilities
Current 666 678
Non-current 877 1,515
------- -------
1,543 2,193
======= =======
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to
leases:
2021 2020
GBP'000 GBP'000
Depreciation charge of right of use assets
Buildings 640 640
Plant and machinery 26 26
------- -------
666 666
------- -------
Interest expense (included in finance cost) 74 101
------- -------
There are no other amounts relating to low value or short term
leases excluded from the above amounts.
14. Goodwill
Goodwill
GBP'000
Cost and net book value
At 1 April 2019 33,054
Impairment in year (5,468)
--------
At 31 March 2020 27,586
Additions (note 11) 2,203
At 31 March 2021 29,789
========
Goodwill by Geographic Market 2021 2020
GBP'000 GBP'000
United Kingdom 24,873 24,873
Australia 4,916 2,713
------- --------
29,789 27,586
======= ========
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 we will be reviewing the
trading positions going forward. This is a change to previous year
when there were 6 CGU's used in the forecast, the re-organisation
of the business operation means that it is more accurate to use 2
CGU's for forecasting, as this is how the businesses are run on a
day to day basis. The value in use calculations were based on
projected cash flows in perpetuity. Budgeted cash flows for 2021/22
to 2028/29 were used. These were based on the forecast for 2022
with growth rates of 7.5% then applied to EBITDA for the following
two years, and 2.5% for subsequent years. In management's view this
is a conservative assumption.
The average year-on-year growth in earnings before interest,
tax, depreciation and amortisation (EBITDA) that has been used as
the basis for forecasting cash flows for each of the cash
generating units when testing for impairment were:
Year-on-year
growth
2022/23 to 2023/24 7.5%
2024/25 to Perpetuity 2.5%
These growth rates are based a conservative view to give
consistency with prior year valuation models. 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 11.5%
(2020:10.9%). The individual cash generating units were assessed
for risk variances from the WACC, but in the absence of
geographical risk, currency risk and any significant price risk
variations, the same WACC was used for all the cash generating
units.
As a result of these tests, no impairment was considered
necessary (2020: GBP5,468k).
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.
-- With no movement in EBIDTA a movement of 0.5% to 12% in the
WACC rate gave the result of no impairment,
-- A movement by 1% to 12.5% gave rise to no impairment .
-- Keeping the WACC rate at 11.5% and reducing EBITDA by 5% gave rise to no impairment .
-- A reduction of EBITDA by 10% gave rise to no impairment.
-- The final test was an increase in WACC by 1% to 12.5% and a
reduction in EBITDA by 10%, this gave rise to an impairment of
GBP2,313k.
15. Other intangible assets
Customer Development
relationships Order books Trademarks costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April 2019 21,305 1,457 1,080 1,471 25,313
Additions during the year
from acquisitions - - - 108 108
At 31 March 2020 21,305 1,457 1,080 1,579 25,421
Additions during the year - - - 3 3
Disposals during the year - - - (161) (161)
At 31 March 2021 21,305 1,457 1,080 1,421 25,263
-------------- ------------- ------------ ----------- -------
Amortisation
At 1 April 2019 18,610 1,457 313 569 20,949
Amortisation charge for
the year 1,296 - 51 200 1,547
Intangible impairment 321 - - - 321
At 31 March 2020 20,227 1,457 364 769 22,817
Amortisation charge for
the year 875 - 26 217 1,118
Disposal - - - (161) (161)
Intangible impairment - - 690 - 690
At 31 March 2021 21,102 1,457 1,080 825 24,464
-------------- ------------- ------------ ----------- -------
Net book amount
At 31 March 2021 203 - - 596 799
-------------- ------------- ------------ ----------- -------
At 1 April 2020 1,078 - 716 810 2,604
-------------- ------------- ------------ ----------- -------
At 1 April 2019 2,695 - 767 902 4,364
-------------- ------------- ------------ ----------- -------
The remaining amortisation period for customer relationships is
one year. The trademarks relate one entity and a trade name, this
name stopped being used during the period and the balance has been
impaired to nil value to reflect the retirement of the name.
The cost of brought forward customer relationships was
determined as at the date of acquisition of the subsidiaries by
professional valuers. The valuations used the discounted cash flow
method, assuming rates of customer attrition at 10% and sales
growth at 2% each year. The discount rate applied at that time to
the future cash flows were specific to each Subsidiary and were all
in the range 14.6% to 15.5%.
Trademarks represent the trading names used by the company.
These are estimated to have an economic life of 20 years, the
remaining trading name covered by this was retired in the year and
the corresponding balance impaired to nil value.
Development costs relate to internally developed products that
are either sold to clients standalone or used to provide services
to them.
Goodwill and other intangible assets have been tested for
impairment. The method, key assumptions and results of the
impairment review are detailed in Note 14. On the basis of this
review, it has been concluded that there is no need to impair the
carrying value of these intangible assets (2020: GBP321,000).
16. Trade and other receivables
2021 2020
GBP'000 GBP'000
Trade receivables 5,536 4,503
Prepayments 426 559
Deferred tax 158 104
Other receivables 94 63
------- -------
6,214 5,229
======= =======
The carrying amount of trade and other receivables approximates
to their fair value.
17. Contract assets and liabilities
Contract assets
2021 2020
GBP'000 GBP'000
Accrued income 619 648
======= =======
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
Revenue
GBP'000
At 31 March 2020 949
Recognised in year (885)
Invoiced in year 1,099
--------
At 31 March 2021 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
2021 2020
GBP'000 GBP'000
Borrowings 8,338 7,939
------- ---------
%%
Average interest rates at the
balance sheet date were: 4.82 5.42
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 reduction in the
LIBOR rate over the last year has led to a reduction in the
underlying rate of interest payable on the loan.
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 (formerly known as
Scope Creative marketing Limited), Alphanumeric Limited, Gasbox
Limited, Jaywing Central Limited, Jaywing Innovation limited, Bloom
Media (UK) Limited, Epiphany Solutions limited).
Further details of the borrowings are provided in Note 30.
Reconciliation of Net debt
1 April Cash flow Accrued 31 March
2020 Interest 2021
not paid
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 1,996 (1,244) - 752
Borrowings (7,939) - (399) (8,338)
-------- ---------- ---------- ---------
Net Debt (5,943) (1,244) (399) (7,586)
-------- ---------- ---------- ---------
The changes in the Group's liabilities arising from financing
activities can be classified as follows:
Long-term Short-term Total
borrowings borrowings
GBP'000 GBP'000 GBP'000
1 April 2020 - 7,939 7,939
Interest accrued not paid - 399 399
------------- ------------ --------
31 March 2021 - 8,338 8,338
------------- ------------ --------
Long-term Short-term Total
borrowings borrowings
GBP'000 GBP'000 GBP'000
1 April 2019 3,850 1,800 5,650
Cash-flows:
* Repayment (3,850) (1,800) (5,650)
* Proceeds - 7,700 7,700
Interest accrued not paid - 239 239
------------ ------------ --------
31 March 2020 - 7,939 7,939
------------ ------------ --------
19. Trade and other payables
2021 2020
GBP'000 GBP'000
Trade payables 2,145 2,301
Tax and social security 2,161 1,052
Accruals 2,402 2,376
Deferred Consideration 1,236 1,769
Other payables 121 -
------- -------
8,065 7,498
------- -------
The carrying amount of trade and other payables approximates to
their fair values. All amounts are short term.
Deferred consideration (comprising put/call options and other
deferred consideration) is carried at fair value through profit and
loss account movements (see Note 33).
Provisions
2021 2020
GBP'000 GBP'000
At 1 April 2020 and 31 March 2021 42 42
Total provisions are analysed as follows:
Current 42 42
------- -------
At 31 March 2021 a provision of GBP42,000 (2020: GBP42,000) 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.
20. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities:
2021 2020
GBP'000 GBP'000
Accelerated capital allowances on property,
plant and equipment:
At start of year (27) 12
Prior year adjustment (1) (2)
Origination and reversal of temporary
differences (20) (37)
------- -------
At end of year (48) (27)
------- -------
Other temporary differences:
At start of year 345 549
Prior year adjustment (41) (7)
Origination and reversal of temporary
differences (301) (197)
------- -------
At end of year 3 345
------- -------
Total deferred tax:
At start of year 318 561
Origination and reversal of temporary
differences (Note 5) (363) (243)
------- -------
At end of year (45) 318
------- -------
Origination on acquisition
Deferred tax is included within:
Deferred tax liability 113 422
Deferred tax asset (158) (104)
------- -------
(45) 318
------- -------
The majority of the other temporary differences relates to the
liability arising on the valuation of intangible assets on
acquisition.
There are no deductible differences or losses carried forward
for which no deferred tax asset is recognised. There are no
temporary differences associated with investments in Subsidiaries
for which deferred tax liabilities have not been recognised.
The March 2021 Budget announced an increase in the UK standard
rate of corporation tax to 25% from 1 April 2023. The legislation
received Royal Assent on 10 June 2021 so was substantively enacted
after the reporting date. Deferred tax as at 31 March 2021 has
therefore been provided at 19%.
21. Share capital
Authorised:
45p deferred 5p ordinary
shares shares
GBP'000 GBP'000
Authorised Share Capital
at 31 March 2020 and
at 31 March 2021 45,000 10,000
------------- ------------
Allotted, issued and fully paid:
45p deferred 5p ordinary
shares shares
Number Number GBP'000
At 31 March 2020 67,378,520 93,432,217 34,992
At 31 March 2021 67,378,520 93,432,217 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 GBP1,000,000 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
2021 2020
GBP'000 GBP'000
At start and end of year 10,088 10,088
------- -------
23. Treasury shares
2021 2020
GBP'000 GBP'000
At start and end of year (99,622 shares) (25) (25)
------- -------
24. Capital redemption reserve
2021 2020
GBP'000 GBP'000
At start and end of year 125 125
------- -------
25. Share option reserve
2021 2020
GBP'000 GBP'000
At start of year 696 838
Share option charge - 23
Transfer in relation to lapsed share options (696) (165)
------- -------
At end of year - 696
------- -------
The Board of Directors approved the original transfer of
reserves from Retained Earnings to a designated share option
reserve.
26. Non-controlling interest
2021 2020
GBP'000 GBP'000
At start of year 1,339 1,151
Acquisition of subsidiaries (note 11) (1,056) -
Share of profit for the year 71 188
------- -------
At end of year 354 1,339
------- -------
27. Foreign currency translation reserve
2021 2020
GBP'000 GBP'000
At start of year (155) -
Exchange differences on translation of foreign
operations (6) (155)
At end of year (161) (155)
------- -------
28. Retained earnings
2021 2020
GBP'000 GBP'000
At start of year (24,868) (15,889)
Acquisition of non-controlling interest 1,056 -
Transfer in relation to lapsed share options - 165
Retained loss for the year (312) (9,144)
At end of year (24,124) (24,868)
-------- --------
29. Capital commitments
The Group had no commitments to purchase property, plant and
equipment at 31 March 2021 or at 31 March 2020: GBPNil.
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 GBP27,500 (2020: GBP30,000). At the year end, GBP7,500
(2020: GBP7,500) was outstanding to Deacon Street Partners
Limited.
On 2 October 2019 entities associated with two of its major
shareholders (the "Major Shareholders") acquired the Company's
existing secured loan facility of GBP5,200,000 ("Jaywing Facility")
The Major Shareholders immediately provided the Company with
additional secured facilities by increasing the Jaywing Facility by
GBP3,000,000 to GBP8,200,000, 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 GBP8,338,000 (2020: GBP7,939,000) was outstanding.
Further details of these borrowings are provided in Note 18.
31. Standards and interpretations in issue at 31 March 2021 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.
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.
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 a number of financial risks, which are described in more detail
below.
The main risks arising from the Group's financial instruments
are market risk, cash flow interest rate risk, credit risk and
liquidity risk. The Directors review and agree policies for
managing each of these risks and they are summarised below.
Market risk
Market risk encompasses three types of risk, being currency
risk, fair value interest rate risk and price risk. In this
instance, price risk has been ignored as it is not considered a
material risk to the business. The Group's policies for managing
fair value interest rate risk are considered along with those for
managing cash flow interest rate risk and are set out in the
subsection entitled "interest rate risk" below.
Currency risk
The Group is only minimally exposed to translation and
transaction foreign exchange risk.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs by closely
managing the cash balance and by investing cash assets safely and
profitably.
The Group policy throughout the period has been to ensure
continuity of funding.
The maturity of borrowings is set out in Note 18 to the
Consolidated Financial Statements.
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.
2021 2020
GBP'000 GBP'000
Financial assets:
Floating interest rate:
Cash 752 1,996
Zero interest rate:
Trade receivables 5,536 4,503
------- -------
6,288 6,499
------- -------
Financial liabilities:
Floating interest rate:
Bank loans/revolving facility 8,338 7,939
Zero interest rate:
Trade payables 2,145 2,301
------- -------
10,483 10,240
------- -------
As at 31 March 2021, the Group's non-derivative financial
liabilities have contractual maturities (including interest
payments where applicable) as summarised below:
31 March 2021 Current Non-current
Within 6 to 12 1 to 5 later than
6 months months years 5 years
GBP'000 GBP'000 GBP'000 GBP'000
Bank borrowings 8,338 - - -
Trade and other payables 10,977 - - -
--------- ------- ------- ----------
Total amount due 19,315 - - -
--------- ------- ------- ----------
This compares to the maturity of the Group's non-derivative
financial liabilities in the previous reporting period as
follows:
31 March 2020 Current Non-current
Within 6 to 12 1 to 5 later than
6 months months years 5 years
GBP'000 GBP'000 GBP'000 GBP'000
Bank borrowings 7,939 - - -
Trade and other payables 10,746 - - -
--------- ------- ------- ----------
Total amount due 18,685 - - -
--------- ------- ------- ----------
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 GBP79,389 lower, and if the interest rate on these
liabilities had been 1% lower, profit before tax would have
improved by GBP79,389.
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 2021
of GBP53,000 (2020: GBP172,000) which has been provided
accordingly.
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:
2021 2020
GBP'000 GBP'000
Financial assets
Loans and receivables
Trade and other receivables 5,630 4,566
Cash and cash equivalents 752 1,996
-------- --------
6,382 6,562
Financial liabilities:
Financial liabilities measured at amortised
cost
Borrowings (8,338) (7,939)
Lease liabilities (1,543) (2,193)
Trade and other payables (9,422) (8,553)
Provisions for liabilities (42) (42)
-------- --------
(19,345) (18,727)
-------- --------
Net financial assets and liabilities (12,963) (12,165)
-------- --------
Plant, property and equipment 2,060 2,887
Goodwill 29,789 27,586
Other intangible assets 799 2,604
Contract assets 619 648
Prepayments 426 559
Deferred tax 158 104
Taxation payable 474 391
Provisions for deferred tax (113) (422)
34,212 34,357
-------- --------
Total equity 21,249 22,192
-------- --------
Capital management policies and procedures
The Group's capital management objectives are:
-- to ensure the Group's ability to continue as a going concern; and
-- to provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
This is achieved through close management of working capital and
regular reviews of pricing. Decisions on whether to raise funding
using debt or equity are made by the Board based on the
requirements of the business.
Capital for the reporting period under review is summarised as
follows:
2021 2020
GBP'000 GBP'000
Total equity 21,129 22,192
------- -------
Financial assets and financial liabilities measured at fair
value in the statement of financial position are grouped into three
levels of a fair value hierarchy. The three levels are defined
based on the observability of significant inputs to the
measurement, as follows:
-- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities
-- Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly or indirectly
-- Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of
financial assets and liabilities measured at fair value on a
recurring basis:
31 March 2021 Level 1 Level 2 Level 3 Total
Financial liabilities GBP'000 GBP'000 GBP'000 GBP'000
Deferred consideration - - (1,236) (1,236)
--------- --------- -------- --------
Net fair value - - (1,236) (1,236)
--------- --------- -------- --------
31 March 2020 Level 1 Level 2 Level 3 Total
Financial liabilities GBP'000 GBP'000 GBP'000 GBP'000
Deferred consideration - - (1,769) (1,769)
--------- --------- -------- --------
Net fair value - - (1,769) (1,769)
--------- --------- -------- --------
There were no transfers between Level 1 and Level 2 in 2021 or
2020.
Measurement of fair value of financial instruments
The Group's finance team performs valuations of financial items
for financial reporting purposes, including Level 3 fair values, in
consultation with third party valuation specialists for complex
valuations. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of
maximising the use of market-based information. The finance team
reports directly to the chief financial officer (CFO) and to the
audit committee. Valuation processes and fair value changes are
discussed among the audit committee and the valuation team at least
every year, in line with the Group's reporting dates.
The following valuation techniques are used for instruments
categorised in Levels 2 and 3:
-- Contingent consideration (Level 3) - The fair value of p ut/call options and other deferred consideration related to acquisitions is estimated using a present value technique. The GBP1,236k fair value is estimated by probability-weighting the estimated future cash outflows, adjusting for risk and discounting at 11.5%. The probability-weighted cash outflows before discounting are GBP1,236k and reflect management's estimate of a 100% probability that the contract's target level will be achieved. The discount rate used is 11.5%, based on the Group's estimated incremental borrowing rate for unsecured liabilities at the reporting date, and therefore reflects the Group's credit position. The effects on the fair value of risk and uncertainty in the future cash flows are dealt with by adjusting the estimated cash flows rather than adjusting the discount rate.
The following table provides information about the sensitivity
of the fair value measurement to changes in the most significant
inputs:
Description Significant unobservable Estimate Sensitivity of the
input of the fair value measurement
input to input
Put and call options Probability of meeting 100% Not applicable
and other deferred target
consideration
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:
Put/call
options
and other
deferred
consideration
GBP'000
Balance at 1 April 2019 1,632
Amount recognised in profit
or loss 137
---------------
Balance at 31 March 2020 1,769
Amount recognised in profit
or loss (533)
---------------
Balance at 31 March 2021 1,236
---------------
33. Post balance sheet events
There have been no reportable post balance sheet events since 31
March 2021.
Company Financial Statements
Company Profit and Loss account
2021 2020
Note GBP'000 GBP'000
Turnover - -
Administrative expenses 2 (1,638) (24,847)
------- --------
Operating loss 3 (1,638) (24,847)
Income from fixed asset investment 4 1,717 2,400
Other income 4 20 166
Finance Costs 5 (421) (487)
------- --------
Loss on ordinary activities before taxation (322) (22,768)
Taxation on ordinary activities 6 331 (96)
------- --------
Loss and total comprehensive income on
ordinary activities after taxation 18 9 (22,864)
------- --------
The accompanying Notes to the Parent Company Financial
Statements form an integral part of these Financial Statements.
Company Balance Sheet
2021 2020
Note GBP'000 GBP'000
Fixed assets
Tangible assets 10 1,242 1,397
Investments 12 34,714 32,511
-------- --------
35,956 33,908
-------- --------
Current assets
Cash at bank 12 182
Debtors due within one year 13 1,237 1,417
-------- --------
1,249 1,599
Current liabilities
Creditors: amounts falling due within one
year 14 (21,540) (19,025)
-------- --------
Total assets less current liabilities 15,665 16,344
-------- --------
Non-current liabilities
Creditors: amounts falling due after more
than one year 15 (840) (970)
-------- --------
Net assets 14,825 15,512
-------- --------
Capital and reserves
Called up share capital 17 34,992 34,992
Share premium account 18 10,088 10,088
Treasury shares 19 (25) (25)
Share option reserve 18 - 696
Capital redemption reserve 18 125 125
Profit and loss account 18 (30,355) (30,364)
-------- --------
Equity shareholders' funds 14,825 15,512
-------- --------
The Financial Statements were approved by the Board of Directors
and authorised for issue on 24 August 2021.
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.
Company Statement of Changes in Equity
Called-up Share Treasury Share Capital Profit
Share Premium Shares Option Redemption and loss
Capital account Reserve Reserve account Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 34,992 10,088 (25) 838 125 (7,665) 38,353
Share-based payment
charge - - - 23 - - 23
Transactions with
owners - - - 23 - - 23
--------- -------- -------- -------- ----------- --------- --------
Profit for the year
and total other
comprehensive income - - - - - (22,864) (22,864)
--------- -------- -------- -------- ----------- --------- --------
Transfer in relation
to lapsed share
options - - - (165) - 165 -
--------- -------- -------- -------- ----------- --------- --------
Total comprehensive
income - - - (165) - (22,699) (22,864)
--------- -------- -------- -------- ----------- --------- --------
At 31 March 2020 34,992 10,088 (25) 696 125 (30,364) 15,512
--------- -------- -------- -------- ----------- --------- --------
At 1 April 2020 34,992 10,088 (25) 696 125 (30,364) 15,512
Share-based payment
charge - - - - - - -
Transactions with
owners - - - - - - -
Profit for the year
and total other
comprehensive income - - - - - 9 9
Transfer in relation
to lapsed share
options - - - (696) - - (696)
--------- -------- -------- -------- ----------- --------- --------
Total comprehensive
income - - - (696) - 9 (687)
--------- -------- -------- -------- ----------- --------- --------
At 31 March 2021 34,992 10,088 (25) - 125 (30,355) 14,825
--------- -------- -------- -------- ----------- --------- --------
The accompanying Notes to the Parent Company Financial
Statements form an integral part of these Financial Statements.
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 (GBP) and
have been presented in round thousands (GBP'000).
Going concern
In determining the appropriate basis of preparation of the
financial statements, the Directors are required to consider
whether the Company can continue in operational existence for the
foreseeable future.
In addition to the normal process of preparing forecasts for the
individual companies with the group and a consolidated position for
the group, the board has also considered the potential impact of
Covid-19 on the cash flows of the company for the assessed period
to 31 March 2023. 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.
Since March 2020, the economic impact of Covid-19 has resulted
in revenue levels below those of the prior year, although we have
been able to provide continuous service to our clients during this
period. The Company has taken actions to protect both cash and
profitability through this period, including voluntary salary
reductions, rent deferrals and taking advantage of Government
schemes for job retention and VAT payment deferral.
At the beginning of the financial year being reported, the
impact of Covid-19 indicated the existence of a degree of
uncertainty which cast significant doubt, as with many other
organisations, about the Company's ability to continue as a going
concern. 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.
The Company continues to have the support of the debt holders
with letters of support received.
The Company's financial statements do not include the
adjustments that would result if the Company were unable to
continue as a going concern. The Directors have a reasonable
expectation that the Company 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 A statement of cash flows and related notes
2 The requirement to produce a balance sheet at the beginning of
the earliest comparative period
3 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
4 Presentation of comparative reconciliations for property,
plant and equipment, intangible assets
5 Capital management disclosures
6 Presentation of comparative reconciliation of the number of
shares outstanding at the beginning and at the end of the
period
7 The effect of future accounting standards not adopted
8 Certain share-based payment disclosures
9 Disclosures in relation to impairment of assets
10 Disclosures in respect of financial instruments (other than
disclosures required as a result of
recording financial instruments at fair value)
11 IFRS 9 disclosures in respect of allowances for expected
credit losses reconciliations and credit risk and hedge
accounting
12. IFRS 15 disclosures in respect of disaggregation of revenue,
contract assets reconciliations and contract liabilities
reconciliation and unsatisfied performance obligations
Investments in Subsidiaries, Associates and Joint Ventures
Investments in Subsidiary undertakings, Associates and Joint
Ventures are stated at cost less any applicable provision for
impairment.
Tangible assets
Property, plant and equipment (PPE) is initially recognised at
acquisition cost or manufacturing cost, including any costs
directly attributable to bringing the assets to the location and
condition necessary for them to be capable of operating in the
manner intended by the Company's management.
PPE is subsequently measured at cost less accumulated
depreciation and impairment losses.
Depreciation is recognised on a straight-line basis (unless
otherwise stated) to write down the cost less estimated residual
value of PPE. The following useful lives are applied:
- Leasehold improvements: 5-10 years
- Fixtures, fittings and equipment: 2-5 years
- 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'. This replaces IAS 39's 'incurred loss
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.
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.
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.
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.
Share-based payments
Where equity-settled share options are awarded by the Parent
Company to employees of this Company, the fair value of the options
at the date of grant is charged to profit or loss over the vesting
period with a corresponding entry in Retained Earnings.
Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options that eventually vest.
Non-vesting conditions and market vesting conditions are
factored into the fair value of the options granted. As long as all
other vesting conditions are satisfied, a charge is made
irrespective of whether the market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure to
achieve a market vesting condition or where a non-vesting condition
is not satisfied.
Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
the statement of comprehensive income over the remaining vesting
period.
Profit from operations
Profit from operations comprises the results of the Company
before interest receivable and similar income, interest payable and
similar charges, corporation tax and deferred tax.
Put/call options
The put/call option in Frank Digital PTY has been valued by an
independent assessor and are recognised with both a service and
non-service element in the accounts. The non-service element is
fully recognised as at the date of acquisition and the fair value
reviewed annually. The service element is treated as a cash-settled
share-based payment with the share-based payment valued at the
point of inception and the cost being spread over the life of the
asset.
Fair value measurement
Management uses valuation techniques to determine the fair value
of financial instruments and non-financial assets. This involves
developing estimates and assumptions consistent with how market
participants would price the instrument. Management bases its
assumptions on observable data as far as possible, but this is not
always available. In that case, management uses the best
information available. Estimated fair values may vary from the
actual prices that would be achieved in an arm's length transaction
at the reporting date.
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.
2. Other operating charges
2021 2020
GBP'000 GBP'000
Share-based payment credit (587) (227)
Related National Insurance credit (109) (42)
Impairment of carrying value of investment - 19,274
Put / Call Valuation (120) -
Administrative expenses 2,454 5,842
Total administrative expenses 1,638 24,847
------- -------
3. Operating loss
2021 2020
GBP'000 GBP'000
Operating loss is stated after charging:
Depreciation of owned fixed assets 58 74
Depreciation of right of use assets 169 169
------- -------
227 243
------- -------
4. Income from fixed asset investments
2021 2020
GBP'000 GBP'000
Dividends received from subsidiary companies 1,717 2,400
------- -------
Other income of GBP20k (2020: GBP166k) is from furlough receipts
(2020: recharges to Group companies for buildings and
printers).
5. Finance costs
2021 2020
GBP'000 GBP'000
Bank interest payable 403 423
Interest on lease liability 44 51
Finance charge on acquisition (26) 13
------- -------
Total 421 487
------- -------
6. Tax on ordinary activities
The tax credit / (charge) is based on the profit
for the year and represents: 2021 2020
GBP'000 GBP'000
UK corporation tax at 19% (2020: 19%) 408 931
Adjustment in respect of prior period (55) (1,039)
------- --------
Total current tax 353 (108)
Deferred tax:
Origination and reversal of timing differences (22) 12
331 (96)
======= ========
The tax credit can be explained as follows: 2020 2020
GBP'000 GBP'000
Loss before tax (322) (22,768)
------- --------
Tax using the UK corporation tax rate of 19%
(2020: 19%) (61) (4,325)
Effect of:
Non-taxable income 343 (422)
Non-deductible expenses / credit (6) 3,612
Prior year adjustment 55 1,039
------- --------
Current year credit 331 (96)
------- --------
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
2021 2020
Average number of staff employed by the Company 17 33
------- -------
2021 2020
Aggregate emoluments (including those of Directors): GBP'000 GBP'000
Wages and salaries 788 2,800
Social security costs 101 279
Pension contribution 52 182
Share-based payment credit (696) (269)
Total emoluments 245 2,992
------- -------
Further information in respect of Directors is given in the
Directors' Remuneration table in the Directors' Remuneration
Report.
Remuneration in respect of Directors was as follows:
2021 2020
GBP'000 GBP'000
Emoluments receivable 277 733
Fees paid to third parties for Directors' services 27 30
Company pension contributions to money purchase
pension schemes 13 87
------- -------
317 850
------- -------
The highest paid Director received remuneration of GBP203,000
(2020: GBP257,000).
9. Dividends
The Directors do not recommend the payment of a dividend for the
current year (2020: GBPNil).
10. Tangible fixed assets
Fixtures
Leasehold &
Buildings Improvements fittings Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost at 1 April 2020 1,147 389 388 1,924
Additions - - 73 73
Disposals - - (102) (102)
--------- ------------- ------- ------- -------
Cost at 31 March 2021 1,147 389 359 1,895
--------- ------------- ------- ------- -------
Depreciation at 1 April
2020 143 120 264 527
Charge for the year on owned
assets - 41 17 58
Disposals - - - (101) (101)
Charge on right of use assets 143 - 26 169
--------- ------------- ------- ------- -------
Depreciation at 31 March
2021 286 161 206 653
--------- ------------- ------- ------- -------
Net book value at 31 March
2021 861 228 153 1,242
--------- ------------- ------- ------- -------
Net book value at 31 March
2020 1,004 269 124 1,397
--------- ------------- ------- ------- -------
11. Leases
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:
2020 2020
GBP'000 GBP'000
Right of use assets
Buildings 861 1,005
Plant and machinery 78 104
------- -------
939 1,109
======= =======
Lease liabilities
Current 169 162
Non-current 840 970
------- -------
1,009 1,132
======= =======
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to
leases:
2021 2020
GBP'000 GBP'000
Depreciation charge of right of use assets
Buildings 143 143
Plant and machinery 26 26
------- -------
169 169
------- -------
Interest expense (included in finance cost) 44 51
======= =======
12. Investments
Subsidiaries
GBP'000
Cost at 1 April 2020 58,915
Additions 2,203
Cost at 31 March 2021 61,118
------------
Impairment at 1 April 2020 26,404
Impairment in year -
Impairment at 31 March 2021 26,404
------------
Net book value at 31 March 2021 34,714
------------
Net Book Value at 31 March 2020 32,511
------------
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 no
impairment was required to the carrying value of the Company's
investments (2020: GBP19,274k).
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 (GBP2.2m), the
total consideration for the purchase of the 100% interest was $9.6m
(GBP5.4m). At 31 March 2021 an amount of GBP0.3m was outstanding to
the original shareholders. This amount was fully paid by 30 June
2021.
At 31 March 2021 the Company held either directly or indirectly,
20% or more of the allotted Share Capital of the following
companies:
Proportion held
Class of
share
capital By parent By the Nature of
held Company Group Business
Alphanumeric Group Holdings
Limited Ordinary 100% 100% Dormant
Alphanumeric Holdings
Limited Ordinary - 100% Dormant
Alphanumeric Limited Ordinary 100% 100% Data services & consultancy
Bloom Media (UK) Limited Ordinary 100% 100% Dormant
Dig for Fire Limited Ordinary - 100% Dormant
Digital Marketing Network
Limited Ordinary 100% 100% Dormant
Digital Media and Analytics
Limited Ordinary 100% 100% Dormant
DMG London Limited Ordinary 100% 100% Dormant
Epiphany Solutions Limited Ordinary 100% 100% Search Engine Optimisation
Frank Digital PTY Limited Ordinary 75% 75% Website design and build
Gasbox Limited Ordinary 100% 100% Non-trading
Hyperlaunch New Media
Limited Ordinary 100% 100% Dormant
Inbox Media Limited Ordinary - 100% Dormant
Iris Associates Limited Ordinary - 100% Dormant
Jaywing Central Limited Ordinary 100% 100% Online marketing & media
Jaywing Information
Limited Ordinary 100% 100% Dormant
Jaywing Innovation Limited Ordinary 100% 100% Product development
Jaywing North Limited Ordinary 100% 100% Dormant
Massive Group PTY Limited Ordinary 100% 100% Search Engine Optimisation
Jaywing UK Limited (formerly
Scope Creative Marketing
Limited) Ordinary 100% 100% Direct marketing
Shackleton PR Limited Ordinary - 100% Dormant
The Comms Department
Limited Ordinary - 100% Dormant
Woken Limited Ordinary - 100% 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 Country of Incorporation Address
Frank Digital PTY Australia 2 Elizabeth Plaza, North Sidney,
Limited Australia NSW 2060
Massive Group PTY 2 Elizabeth Plaza, North Sidney,
Limited 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 1 year
2021 2020
GBP'000 GBP'000
Amounts due from Group undertakings 58 58
Prepayments 262 173
Other taxation and social security - 243
Deferred tax 34 12
Corporation tax 883 931
1,237 1,417
------- -------
Amounts due from Group undertakings attract no interest and are
repayable on demand.
14. Creditors: amounts falling due within one year
2021 2020
GBP'000 GBP'000
Borrowings (Note 16) 8,338 7,939
Trade creditors 335 343
Amounts owed to Group undertakings 10,270 8,170
Other taxation and social security 913 74
Other creditors 13 47
Accruals 266 521
Lease liability 169 162
Deferred consideration payable on acquisition
of subsidiary undertakings 1,236 1,769
------- -------
21,540 19,025
------- -------
Deferred consideration includes put/call options and other
deferred consideration which has increased in the year due to fair
value movements of GBP31k, plus releases against the other deferred
considerations of GBP496k.
Amounts owed to Group undertakings attract no interest and are
repayable on demand.
15. Creditors: amounts falling due in more than one year
2021 2020
GBP'000 GBP'000
Lease liability 840 970
======= =======
16. Borrowings
2021 2020
GBP'000 GBP'000
Summary:
Borrowings 8,338 7,939
------- -------
Borrowings are repayable as follows: 2021 2020
GBP'000 GBP'000
Within one year:
Borrowings 8,338 7,939
------- -------
Total due within one year 8,338 7,939
------- -------
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. The
reduction in the LIBOR rate over the last year has led to a
reduction in the underlying rate of interest payable on the
loan.
17. Share capital
Allotted, issued and fully paid:
45p deferred 5p ordinary
shares shares
Number Number GBP'000
At 31 March 2020 67,378,520 93,432,217 34,992
At 31 March 2021 67,378,520 93,432,217 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 GBP1,000,000 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
2021 2020
GBP'000 GBP'000
At 31 March 2021 and 31 March 2020 25 25
------- -------
20. Share-based payments
Share-based payment credit is as follows:
2020 2020
GBP'000 GBP'000
Share-based payment (587) (227)
Related National Insurance costs (109) (42)
------- -------
(696) (269)
------- -------
21. Provision for liabilities
Deferred
tax
(Note 6)
GBP'000
At 1 April 2020 12
Amounts of deferred tax recognised in profit or loss 22
---------
At 31 March 2021 34
---------
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 2021 the amount thus guaranteed by the
company was GBPnil (2020: GBPnil).
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 GBP52,000 (2020: GBP182,000).
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 2020. 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 (2020: 1,489,025).
Shareholder Information
General Meeting
A General Meeting will be held on Tuesday 21st September 2021 at
the offices of Jaywing plc, Albert Works, Sidney Street, Sheffield,
S1 4RG at 12:30pm.
Dividend
There is no dividend payable.
Multiple accounts on the shareholder register
If you have received two or more copies of or notifications
about the Annual Report, 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.
-- 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 2021.
Issued Share Capital
As at 10 August 2021 (being the last practicable date before the
publication of the Annual Report), 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 28 July 2021 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 .
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
Caroline Ackroyd
Albert Works
71 Sydney Street
Sheffield
S1 4RG
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR PPURWRUPGGWA
(END) Dow Jones Newswires
August 25, 2021 09:49 ET (13:49 GMT)
Jaywing (LSE:JWNG)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Jaywing (LSE:JWNG)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024