TIDMJWNG
RNS Number : 5442G
Jaywing PLC
26 November 2020
Jaywing plc
("Jaywing", the "Company" or "Group")
Audited results for the year ended 31 March 2020
Jaywing plc, the UK agency specialising in data science,
announces its audited results for the year ended 31 March 2020.
Copies of the annual report and accounts together with the notice
of the General Meeting will be issued to shareholders shortly and
will also be available to view and download from the Company's
website: www.jaywingplc.com.
Financial highlights
Year to 31 March Year to 31 March Year to 31
2020 Including 2020 Excluding March 2019
IFRS16 IFRS16 Excluding IFRS16
GBP'000 GBP'000 GBP'000
Net Revenue* 24,043 24,043 29,845
----------------- ----------------- ------------------
Adjusted EBITDA** (158) (869) 2,625
----------------- ----------------- ------------------
Cash Generated from
Operations 953 343 2,422
----------------- ----------------- ------------------
Net Debt (excluding
IFRS 16)*** (5,943) (5,943) (4,960)
----------------- ----------------- ------------------
First Half Year and Second Half Year Performance
6 months to 30 6 months to Year to 31
September 2019 31 March 2020 March 2020
GBP'000 GBP'000 GBP'000
Net Revenue* 11,996 12,047 24,043
---------------- --------------- ------------
Adjusted EBITDA** (573) 415 (158)
---------------- --------------- ------------
Cash Generated from
Operations
Including IFRS 16 380 573 953
Excluding IFRS 16 8 335 343
---------------- --------------- ------------
Net Debt (excluding
IFRS 16)*** (5,748) (5,943) (5,943)
---------------- --------------- ------------
Reconciliation of Operating Loss with Adjusted EBITDA
6 months 6 months Year to Year to Year to
to 30 September to 31 March 31 March 31 March 31 March
2019 2020 2020 Including 2020 Excluding 2019
GBP'000 IFRS16 IFRS16 Excluding
GBP'000 GBP'000 GBP'000 IFRS16
GBP'000
Operating Loss from
Continuing Operations (1,380) (7,494) (8,874) (8,919) (809)
----------------- ------------- ---------------- ---------------- -----------
Add Back:
----------------- ------------- ---------------- ---------------- -----------
Depreciation 187 144 331 331 412
----------------- ------------- ---------------- ---------------- -----------
Depreciation of right
of use assets 333 333 666 - -
----------------- ------------- ---------------- ---------------- -----------
Amortisation of intangibles 777 770 1,547 1,547 1,795
----------------- ------------- ---------------- ---------------- -----------
EBITDA (83) (6,247) (6,330) (7,041) 1,398
----------------- ------------- ---------------- ---------------- -----------
Impairment of goodwill
and other intangibles - 5,789 5,789 5,789 1,050
----------------- ------------- ---------------- ---------------- -----------
Restructuring charges 295 572 867 867 -
----------------- ------------- ---------------- ---------------- -----------
Share based payment
charges / (credits) (785) 301 (484) (484) 177
----------------- ------------- ---------------- ---------------- -----------
Adjusted EBITDA (573) 415 (158) (869) 2,625
----------------- ------------- ---------------- ---------------- -----------
* Revenue less third-party direct costs of sale
** Adjusted EBITDA represents EBITDA before restructuring costs,
impairment charges and share based payment charges / (credits)
*** Including accrued interest
Enquiries:
Jaywing plc ( www.jaywingplc.com )
Andrew Fryatt (CEO)
Tel: 0114 281 1200
Cenkos Securities plc
Nicholas Wells/Callum Davidson (Nominated Adviser)
Tel: 0207 397 8900
This announcement is released by Jaywing and contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 ("MAR"), and is disclosed in accordance
with the Group's obligations under Article 17 of MAR.
Chairman's Statement
The results for the year ended 31 March 2020 reflect a
disappointing first half to 30 September 2019 of deteriorating
revenues and cash flow performance followed by a more pleasing
second half of revenue stabilisation and adjusted EBITDA and cash
flow improvement as a result of actions taken by the board. These
actions were part of a formal restructuring plan adopted by the
board to streamline business processes and cost structures, improve
efficiencies and working capital performance.
Adjusted EBITDA* for the first half was a loss of GBP573k and a
profit of GBP415k for the second half, resulting in a net adjusted
EBITDA loss of GBP158k for the year.
Cash flow generated from operations**, which include
restructuring costs, was GBP380k in the first half and GBP573k in
the second half, a total of GBP953k for the year.
It is pleasing to note that the Australian businesses continued
to perform well throughout the year delivering strong Net Revenue
and cash flow generation. We look forward to further developing the
collaboration between our UK and Australian management teams.
In late March 2020 we were delighted to welcome Andrew Fryatt to
the board as CEO. Andrew has continued to implement the remaining
elements of the restructuring plan as well as taking the urgent
actions required to mitigate the impact of Covid-19 on the
business, our clients and our people.
We continue to win new business and the recent realignment of
our business sectors to align with the clients and market segments
we serve, should enable the business to further develop and tailor
its comprehensive service offering to existing and new clients.
I am pleased to see the results of the actions taken to improve
profitability and cash flow performance and would like to thank our
people throughout the group both in the UK and Australia for their
dedication and achievements during these challenging times and for
their ongoing support. Whilst the general business outlook remains
uncertain, I believe the actions we have taken have placed us in a
better position to adapt to change, whilst continuing to serve and
further develop our services to clients.
Ian Robinson
Non-Executive Chairman
* Adjusted EBITDA represents EBITDA before restructuring costs,
impairment charges and share based payment charges / (credits).
** including IFRS 16
Chief Executive's Report
The year ended 31 March 2020 ("FY 20") was a challenging year
for Jaywing, with difficult market conditions impacting trading and
cash flow performance in the first half. This led to the
implementation of a restructuring plan which delivered a turnround
in second half performance. These actions taken to restructure the
business have enabled Jaywing to enter the new financial year in a
more resilient state at the end of March 2020, at the time I joined
the board. Further details of the year's trading-performance and
these actions are provided in the Strategic Review section
below.
Since the end of March 2020, the business has been impacted by
the COVID-19 pandemic, which has reduced revenues by around 20% in
the first quarter of the new financial year, as a result of clients
reducing or delaying spend during the initial lockdown period.
However, the business has been able to continue operating
successfully on a remote basis, and has taken measures to secure
its financial position, including voluntary salary reductions by
all employees and use of the Government's furlough arrangements for
around 50 employees.
During FY 20 our Australian businesses delivered 1% revenue
growth, and 46% EBITDA growth. We have started to see the benefit
of being able to offer multiple services to individual clients,
generating larger monthly retainers, and also our growing
reputation for data and analytics in the Australian market. A more
"consulting-led" approach has enabled us to build stickier client
relationships.
Outlook
Extrapolating from Q4 performance would have suggested a
significant improvement in profitability in FY 21. However, in the
face of COVID-19, significant reductions in marketing spend across
the industry have severely impacted many businesses, and, with the
rate of recovery continuing to be unclear, it is difficult to
confidently assess the outlook for FY 21. Our broad client mix
means we are less reliant on any one specific sector and more able
to manage variations in market conditions. Some clients have
already returned to pre-pandemic spend levels, but others continue
to defer expenditure. We have nonetheless continued to win new
business and have a good pipeline of new opportunities.
We have also reorganised our UK operating structure to focus on
core market sectors and better support future growth, with a
further 8% reduction in headcount, and this will be described more
fully in the interim results statement, which are expected to be
published in early December.
The actions taken to support the business through the pandemic
have very effectively protected profitability and cashflow, but we
believe that we are still at least 6 months away from revenues
returning to pre-pandemic levels in the UK, which could be further
extended if the second wave hits hard. In Australia, where the
pandemic seems to now be more controlled, revenues are already
close to Q4's level, which is very encouraging.
At this stage we expect the impact of COVID-19 to be a
significant reduction in full year net revenues for FY 21 compared
to FY 20, but with good prospects for a significant improvement in
underlying EBITDA.
Our employees have demonstrated an inspiring commitment to
Jaywing, not least in the voluntary salary reduction during the
first wave of the pandemic, and the capabilities of our people are
our biggest asset. We are focusing on promoting our broad range of
specialist capabilities across our full client base, seamlessly
collaborating to address client challenges, and we believe this
joined-up approach will be the blueprint for future revenue
growth.
Andrew Fryatt
Chief Executive Officer
Jaywing plc
Strategic Review
Results
The results for the year overall have been disappointing. There
was a significant fall in Net Revenue, EBITDA and cash flow in the
first half of the year which led to the appointment of external
consultants in August 2019, to review the cash flow position of the
Group and make recommendations. This was followed by the
acquisition of the Company's existing secured loan facility by
entities associated with two of its major shareholders, described
in further detail below, and the board's implementation of a
restructuring plan to turn the financial position around. It is
pleasing to note that the second half year results following
implementation of this plan have delivered a stronger second half
with higher exit adjusted EBITDA run rates. Further details are
provided below.
The Company's Net Revenue for the year ended 31 March 2020 was
GBP24.0m, a decrease of 20% on the prior year of GBP29.8m. This
reflected weak trading in the UK business partly offset by strong
growth in the Australian business.
The adjusted EBITDA loss amounted to GBP0.2m (a loss of GBP0.9m
excluding IFRS 16) compared with a profit of GBP2.6m for the prior
year (excluding IFRS 16).
Cashflow generated from operations including IFRS 16 amounted to
GBP1.0m (GBP0.3m excluding IFRS 16) compared with GBP2.4m for the
prior year excluding IFRS 16.
First and second half performance
The results for the year reflect a significant turnround in
Adjusted EBITDA and cash flow performance between the first half of
the year to 30 September 2019 and the second half of the year to 31
March 2020 following actions taken by the board, as referred to
below, to stabilise the decline in Net Revenue and significantly
improve profitability and cash flow performance.
The table in the Financial Highlights shows the key figures for
the two half years. The Net Revenue decline in the first half
stabilised in the second half. Adjusted EBIDTA turned round by
GBP1.0m, from a first half loss of GBP0.6m to a positive of
GBP0.4m. Cash flow generated from operations increased by GBP0.2m
from GBP0.4m in the first half to GBP0.6m in the second half,
though these figures include restructuring costs of GBP0.3m and
GBP0.6m in the first and second half respectively.
Secured Loan Facility
The weak trading and cash flow performance during the first half
of the year led to the appointment of external consultants in
August 2019, to review the cash flow position of the Group and make
recommendations. On 2 October 2019 entities associated with two of
its major shareholders (the "Major Shareholders") acquired the
Company's existing secured loan facility of GBP5.2m ("Jaywing
Facility") The Major Shareholders immediately provided the Company
with additional secured facilities by increasing the Jaywing
Facility by GBP3m to GBP8.2m, 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 the term loan previously provided to
Jaywing. The Company remains in ongoing discussions with the Major
Shareholders with regard to a possible future restructuring of the
Jaywing Facility.
Net Debt
At 31 March 2020, Net Debt including accrued interest (excluding
IFRS 16) was GBP5.9m (2019: GBP5.0m) and was represented by The
Jaywing Facility of GBP7.9m less cash of GBP2.0m.
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.
On 31 October 2020 the Net Debt including accrued interest
(excluding IFRS 16) was GBP6.9m and comprised the Jaywing Facility
of GBP8.2m less cash of GBP1.3m.
Restructuring Plan
In August 2019 the board of the Company 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
EBITDA and cash flow run rates of the business . This review
resulted in a detailed implementation plan (the "Restructuring
Plan") which was implemented by the Company under the oversight of
the consultants, on behalf of the board. The implementation of the
Restructuring Plan has continued into the current financial year
under the leadership of Andrew Fryatt, who was appointed as CEO at
the end of March 2020. The main restructuring costs arising from
this plan were incurred in the period from September 2019 to March
2020.
Total restructuring costs disclosed for the year ended 31 March
2020 amount to GBP867,000. These comprise GBP295,000 relating to
the initial consulting exercise and the subsequent acquisition of
the Jaywing Facility, and GBP572,000 relating to the costs of the
restructuring plan and its implementation.
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 now owns 100% of the shares in Massive Group,
which has traded as Jaywing Australia since 2017.
Jaywing and Massive Group 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 from July
2020. This 25% stake has now been acquired by Jaywing for a
consideration of $4.0m (c.GBP2.2m), comprising $3.0m (c.GBP1.66m)
immediately, followed by a series of monthly payments totalling
$1.0m (c.GBP0.54m) between now and 30 June 2021. The total
consideration for the purchase of the 100% interest in Massive
Group is $9.6m (c. GBP5.4m).
Massive Group's business has grown strongly since 2016 and has
more than doubled its EBITDA since then. This has enabled
approximately 93% of the total consideration for the put option to
be funded from cash generated in Australia. Massive Group continues
to work collaboratively with the UK business on clients and
services.
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 10.9% (2019: 10.2%). This was applied to cash
flows for each of the business units using estimated growth rates
in each business unit. As a result of these calculations the Board
has concluded that a goodwill impairment of GBP5,468k was required
(2019: GBP1,050k).
Share Options
The Company's Performance Share Plan terminated on 8 October
2020 and there are no outstanding share options.
Current trading and future prospects
Since March 2020, the economic impact of COVID-19 has resulted
in revenue levels below those of the prior year, although the Group
has been able to provide continuous service to its clients during
this period. The Company has taken actions to protect both cash and
profitability through this period, including voluntary salary
reductions, cost reductions, rent deferrals, Government grant
income and deferral of certain HMRC payments. The Group has
continued to win new business during the first half of the
financial year and, whilst there remains considerable uncertainty
in markets generally, the Company believes that it is well
positioned following the restructuring of its business to benefit
as economic activity recovers.
Going Concern
In determining the appropriate basis of preparation of the
financial statements, the Directors are required to consider
whether the Company and Group can continue in operational existence
for the foreseeable future.
In addition to the normal process of preparing forecasts for the
individual companies within 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 a period in excess
of 12 months from the date of signing the financial statements.
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 the Group
has been able to provide continuous service to its 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 and building on the
results which followed implementation of the Restructuring Plan in
late 2019.
The second quarter has continued to see a positive trend. Whilst
there remains considerable uncertainty in markets generally, the
Group believes that it is well placed to benefit as economic
activity recovers.
The impact of Covid-19 indicates the existence of a material
uncertainty which may cast significant doubt about the Company's
and the Group's ability to continue as a going concern. The Company
and Group financial statements do not include the adjustments that
would result if the Company and Group were unable to continue as a
going concern. Notwithstanding this material uncertainty, the
Directors have a reasonable expectation that the Company and Group
have 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.
The Company's lenders have confirmed that they will continue to
provide financial support for a period of at least 12 months from
the date of the Directors signing the financial statements for the
year ended 31 March 2020 by not making demand for repayment of the
balance of the Jaywing Facility, should doing so prevent Jaywing
PLC from meeting its debts as and when they fall due.
Principal Risks and Uncertainties
The evaluation of the Company's risk management process is the
responsibility of the Board. Jaywing has developed its risk
reporting framework in conjunction with the business leadership
team who take an active and responsible role in this process. Below
is a summary of the current key risks.
Risk Mitigation
1. COVID-19
Since late March 2020, Jaywing The Company has been quick to take
has been impacted by the COVID-19 action to mitigate the impact of
pandemic, with some clients this reduction in demand by putting
pausing spend or delaying planned in place measures to minimise the
projects. financial effect on the Company.
Most of Jaywing's staff have been
able to work effectively from home
and we have continued to provide
good levels of service and support
to its existing clients as well
as adding new business.
-------------------------------------------
2. Loss of key staff
Jaywing is dependent on its The expertise of Jaywing's people
ability to recruit and retain is a key source of competitive
staff with adequate experience advantage and the Company's remuneration
and technical expertise to service and incentive packages are reviewed
its clients. regularly to retain and incentivise
key staff. The Company also provides
an attractive and collaborative
working environment and culture.
-------------------------------------------
3. Loss of business from clients
Loss of business from clients The Company aims to minimise such
could lead to a reduction in losses by continuing to focus on
overall revenue and profitability. providing a high quality service
to its clients at all times as
well as offering a wide range of
services to existing clients and
adding new clients through its
new business activities.
Jaywing has recently announced
a restructure of its main business
sectors based on clients and markets
with the aim of getting closer
to each of them with Jaywing's
full range of services tailored
to clients and the markets they
operate in.
Jaywing's client concentration
risk is low .
The impact of revenue losses on
profitability is mitigated by ensuring
that the Company's cost base is
efficiently aligned with its revenues.
-------------------------------------------
4. Changes in technology
The digital marketing industry Jaywing is committed to innovation
is characterised by constant in data science led products and
developments in technology, services and has dedicated resources
online media and data science. to this. The Company has close
In this environment, it is vital relationships with online media
to be at the forefront of this owners (e.g. Google) and has early
change, to ensure Jaywing is access to new product developments
able to provide the benefits as a consequence of the significant
of these changes in technology online media budgets that it manages
to its clients and remain competitive. on behalf of its clients.
Jaywing also has a strong team
focused on the use of technology
whose brief is to keep themselves
abreast of new developments through
their own research and through
their relationships with technology
providers.
-------------------------------------------
5. Liquidity
Poor trading and cash flow performance Jaywing's key financial measures
could lead to a lack of ongoing are focussed on cash generation
support from its lenders and and net debt. The Company monitors
an inability to raise equity its trading and cash flow performance
to meet the needs of the business. closely and takes prompt action
to mitigate any adverse trends.
-------------------------------------------
6. Compliance with regulations
and changes in legislation
Failure to comply with regulations Jaywing engages advisers in relevant
such as GDPR and changes in specialisations to assist with
legislation could lead to reputational compliance. Experts in Jaywing's
damage for Jaywing and its clients business areas are able to ensure
as well as fines and loss of client initiatives are all compliant,
business. alongside external input where
appropriate.
-------------------------------------------
Board of Directors
Ian Robinson, Non-Executive Chairman
Chair of Audit & Risk Committee and member of Remuneration
and Nomination Committees
Ian is a Non-Executive Director and Chairman of Audit Committee
of Gusbourne plc, an Aim listed company. He is also a Director of a
number of privately-owned businesses. He has previously held a
number of other senior financial appointments both in the UK and
overseas. He is a Fellow of the Institute of Chartered Accountants
in England & Wales and holds an honours degree in Economics
from the University of Nottingham.
Andrew Fryatt, Chief Executive,
Andrew has more than 30 years' experience in
technology-dependent businesses, primarily in the Retail and
Telecoms sectors. Following an honours degree in Economics from the
University of Cambridge, he began his career in the Mars Group,
progressing through various marketing roles before joining
Kingfisher Group in a senior marketing role. His experience
included senior marketing and commercial roles before moving into
general management, and he has run major divisions of Daisy and Zen
Internet, as well as gaining experience as CEO of Ideal Shopping
Direct plc. He has a particular focus on customer excellence and
has received several awards on behalf of his businesses for
delivering outstanding service.
Mark Carrington, Non-Executive Director
Member of Audit & Risk, Remuneration and Nomination
Committees
Mark is a Fellow of the Association of Chartered Certified
Accountants. He is a Non-Executive Director of a number of
privately-owned businesses both in the UK and Overseas. He is also
involved in the provision of management services to a number of
other privately-owned and AIM quoted businesses, ensuring he is
always abreast of the most recent regulatory changes and associated
best practice. Mark is a Non-Executive Director of Political
Holdings Limited US and Shutdown Maintenance Services Limited.
Philip Hanson, Non-Executive Director
Chair of Remuneration and Nomination Committees and member of
Audit & Risk Committees
Philip has extensive experience in marketing and ecommerce both
in the UK and internationally, having held a number of senior roles
in the FMCG and retail financial services sectors - latterly as
Global Marketing & ecommerce Director for Travelex. He is also
Non-Executive Director of the Bettys & Taylors Group. He is a
Director of the French and Australian entities of the Goelet family
wine business (Silver Blue LLC, SCEA Domaine de Nizas and Red Earth
Nominees Pty Ltd respectively) where he regularly travels to
understand the business, its changing markets and resultant
challenges, and to provide counsel to the Executive Directors.
Philip was a Director of Travelex Card Services Ltd until December
2015.
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 2020.
Principal activity
The principal activity of the Company, and Group, during the
year under review is that of data-science-led performance marketing
agency and consulting services.
Results and dividend
The Group's profit after taxation from continuing operations for
the year ended 31 March 2020 was a loss of GBP9.0 million (2019:
loss of GBP0.9 million). The Directors do not propose to pay a
dividend.
Future developments
The future developments of the Group are referred to in the
Chief Executive's Report.
Political and charitable donations
No political or charitable donations were made during the year
(2019: GBPNil).
Directors' interests
The present membership of the Board, together with biographies
on each, is set out above. 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 34 to
the Consolidated Financial Statements.
Share Capital
Details of the Company's Share Capital, including rights and
obligations attaching to each class of share, are set out in Note
22 of the Consolidated Financial Statements.
There are no restrictions on the transfer of ordinary shares in
the capital of the Company, other than customary restrictions
contained within the Company's Articles of Association and certain
restrictions which may be required from time-to-time by law, for
example, insider trading law. In accordance with the Model Code,
which forms part of the Listing Rules of the Financial Services
Authority, certain Directors and employees are required to seek the
prior approval of the Company to deal in its shares.
The Company is not aware of any agreements between shareholders
that may result in restrictions on the transfer of securities
and/or voting rights. The Company's Articles of Association contain
limited restrictions on the exercise of voting rights.
The Company's Articles of Association may only be amended by
special resolution at a General Meeting of shareholders.
Major interests in shares
As at 16 November 2020, 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:
2020 2019
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 3,972,500 4.3 3.0
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 and Chief Executive Officer's statements describe
the Group's activities, strategy and future prospects, including
the considerations for long term decision making.
The Company considers that its major stakeholders are its
employees, customers, lenders and shareholders. When making
decisions, the interests of these stakeholders is 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 customers 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,
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 2019 to 31 March 2020 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 2019/20 (tCO2e)
Direct emissions (Scope 1) - natural gas
and LPG 36,211
----------------
Indirect emissions (Scope 2) - from purchases
electricity 96,616
----------------
Total tCO2e (Scope 1 & 2) 132,827
----------------
Other indirect emissions (Scope 3) - grey
fleet travel 45,952
----------------
Gross Total Emissions 178,779
----------------
Intensity metric (Gross Emissions): Tonnes
of CO2e per employee 550
----------------
Total energy consumption (kWh) 611,351
----------------
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
-- 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 this announcement
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: 25 November 2020
Directors' Remuneration Report
In preparing this report, we have followed the spirit of the
QCA's Corporate Code of Governance and drawn on best practice
available, as well as those aspects of the UK Corporate Governance
Code 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 five 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 2020 there were four Executive
Directors on the Board as follows:
Martin Boddy (Executive Chairman) - resigned 27 January 2020
Robert Shaw (Chief Executive Officer) - resigned 26 March
2020
Michael Sprot (Chief Financial Officer) - resigned 24 March
2020
Adrian Lingard (Chief Operating Officer) - resigned 20 December
2019
On 21 April 2020 Andrew Fryatt (Chief Executive Officer), who
joined the company on 26 March 2020, was appointed to the
Board.
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
Company for the years ended 31 March 2020 and 2019 are shown
below:
31 March 2020 2019
GBP GBP
Aggregate emoluments 732,939 841,771
Sums paid to third parties
for Directors' services 30,000 30,000
---------------------------- -------- --------
762,939 871,771
---------------------------- -------- --------
The emoluments of the Directors are shown below:
31 March 2020 2020 2020 2020 2019 2020 2019
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 - - 147,416 183,104 16,461 20,000
Resigned
25 April
Andy Gardner 2018 - - - - 7,234 - 579
Resigned
Michael 24 March
Sprot 2020 111,954 - - 111,954 111,833 38,712 39,610
Resigned
Robert 26 March
Shaw 2020 237,538 - - 237,538 244,000 19,795 20,000
Resigned
Adrian 20 December
Lingard 2019 146,031 - - 146,031 205,600 12,169 16,800
Mark Carrington 30,000 - - 30,000 30,000 - -
Ian Robinson 50,000 - - 50,000 50,000 - -
Philip
Hanson 40,000 - - 40,000 40,000 - -
Total 762,939 - - 762,939 871,771 87,137 96,989
---------------------------------- -------- --------- ------ -------- -------- --------------- ---------------
paid to a third party for the Director's services
The salary of the highest paid Director was 5.6 times the
average salary of all company employees excluding the Directors in
the table above.
Pensions
The Company made pension contributions on behalf of each of the
Executive Directors. The amounts are 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 whom
Date of contract Notice period contracted
3 months (6 months
26 March from 30 September
Andrew Fryatt 2020 2020) 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 2020 2019
Number of shares Number of shares
Ian Robinson 470,267 470,267
Philip Hanson 109,462 109,462
The table below sets out options granted under the Company's
Performance Share Plan. All these options lapsed on 30 September
2020, and the Performance Share Plan was closed to all participants
once all options lapsed:
Normal
At 31 At 31 date from
March March Exercise which Expiry
2020 2019 price exercisable date
---------- -------- ---------- --------- ------------- ------------
Martin
Boddy 44,106 254,106 5p 1-Aug-2016 30-Sep-2020
Michael
Sprot 32,386 532,386 5p 1-Aug-2016 30-Sep-2020
Adrian
Lingard 419,227 919,227 5p 1-Aug-2016 30-Sep-2020
Robert
Shaw 794,773 1,294,733 5p 1-Aug-2016 30-Sep-2020
Other related party transactions
No Director of the Group, except for Rob Shaw, has, or had, a
disclosable interest in any contract of significance subsisting
during or at the end of the year.
Disclosable transactions by the Company under IAS 24, Related
Party Disclosures, are set out in Note 32. There have been no other
disclosable transactions by the Company and its Subsidiaries with
Directors of the Company or any of the subsidiary companies and
with substantial shareholders since the publication of the last
Annual Report.
By Order of the Board
Philip Hanson
Dated: 25 November 2020
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 2020, 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 five times a year to set the overall direction and strategy
of the Group. All strategic operational and investment decisions
are subject to Board approval.
The roles of Chief Executive Officer and Chairman are separate
and there is a clear division of their responsibilities. All
Directors are subject to re-election at least every three years
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 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 of the Executive Directors and authorises their annual
bonus payments for achievement of objectives. The Remuneration
Committee approves remuneration packages sufficient to attract,
retain and motivate Executive Directors required to run the Group
successfully, but does not pay more than is necessary for this
service.
The Committee did not award any pay rises, bonuses 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 twice
annually. The Audit & Risk Committee oversees the monitoring of
the adequacy and effectiveness of the Group's internal controls,
accounting policies and financial reporting and provides a forum
for reporting by the Group's external auditor. Its duties include
keeping under review the scope and results of the audit and its
cost effectiveness, consideration of management's response to any
major audit recommendations and the independence and objectivity of
the auditor.
The Audit & Risk Committee review the significant estimates,
judgements and risks in relation to the annual report and these are
outlined in the Strategic Report. The Committee also reviews the
risks outlined in the Principal Risks and Uncertainties detailed
above, and challenges the Executive Directors on the controls and
processes in place to manage these. The effectiveness of the
external audit process has been assessed through discussions with
both management and the auditors, and it is proposed that Grant
Thornton be reappointed as external auditor.
Nomination Committee
The Nomination Committee comprises Philip Hanson (Chair), Ian
Robinson and Mark Carrington. It is responsible for nominating to
the Board candidates for appointment as Directors, having regard
for the balance and structure of the Board. The 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 2020:
Board Remuneration Audit & Risk Nomination
--------------------- ------ ------------- ------------- -----------
Total meetings held 7 5 2 2
--------------------- ------ ------------- ------------- -----------
Ian Robinson 7 5 2 2
Philip Hanson 7 5 2 2
Mark Carrington 7 5 2 2
Martin Boddy 5 3 1 -
Michael Sprot 6 2 2 -
Robert Shaw 4 1 - -
Adrian Lingard 5 - - -
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, suppliers and business partners when operating the
business.
Employment
At a subsidiary level, each individual company has established
policies which address key corporate objectives in the management
of employee relations, communication and employee involvement,
training and personal development and equal opportunity. The Board
recognises its legal responsibility to ensure the wellbeing, safety
and welfare of its employees and to maintain a safe and healthy
working environment for them and for its visitors. Health and
Safety is on the agenda for regularly scheduled plc Board and
Operations Board meetings.
Environment
By their nature, the Group's regular operations are judged to
have a low environmental impact and are not expected to give rise
to any significant inherent environmental risks over the next 12
months.
By Order of the Board
Caroline Ackroyd Dated: 25 November 2020
Directors' Responsibilities Statement
The Directors are responsible for preparing the Directors'
Report, the Strategic Report and the Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
have elected to prepare the Group Financial Statements in
accordance with International Financial Reporting Standards
(IFRSs), as adopted by the European Union, and have elected to
prepare the Parent Company Financial Statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law, including FRS101
"Reduced Disclosure Framework"). Under company law, the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs and
profit or loss of the Company and Group for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards/IFRSs as
adopted by the EU have been followed, subject to any material
departures disclosed and explained in the financial statements;
and
-- prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and the
Company's transactions, and disclose with reasonable accuracy, at
any time, the financial position of the Group and the Company and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Group and the Company and hence, for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
By Order of the Board
Andrew Fryatt
Dated: 25 November 2020
Independent auditor's report to the members of Jaywing plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Jaywing plc
(the 'parent company') and its subsidiaries (the 'group')
for the year ended 31 March 2020, which comprise the consolidated
statement of comprehensive income, the consolidated balance
sheet, the consolidated cash flow statement, the consolidated
statement of changes in equity, the principal accounting
policies, the company profit and loss account, the company
balance sheet, the company statement of changes in equity,
and notes to the financial statements, including a summary
of significant accounting policies. The financial reporting
framework that has been applied in the preparation of
the group financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the
European Union. The financial reporting framework that
has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard
101 'Reduced Disclosure Framework' (United Kingdom Generally
Accepted Accounting Practice).
In our opinion:
* the financial statements give a true and fair view of
the state of the group's and of the parent company's
affairs as at 31 March 2020 and of the group's loss
and parent company's loss for the year then ended;
* the group financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
* the parent company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
* the financial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
'Auditor's responsibilities for the audit of the financial
statements' section of our report. We are independent of the group
and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the
UK, including the FRC's Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
The impact of uncertainties arising from the UK exiting the
European Union on our audit
Our audit of the financial statements requires us to obtain an
understanding of all relevant uncertainties, including those
arising as a consequence of the effects of Brexit. All audits
assess and challenge the reasonableness of estimates made by the
directors and the related disclosures and the appropriateness of
the going concern basis of preparation of the financial statements.
All of these depend on assessments of the future economic
environment and the group's and the parent company's future
prospects and performance.
Brexit is one of the most significant economic events for the
UK, and at the date of this report its effects are subject to
unprecedented levels of uncertainty, with the full range of
possible outcomes and their impacts unknown. We applied a
standardised firm-wide approach in response to these uncertainties
when assessing the group's and the parent company's future
prospects and performance. However, no audit should be expected to
predict the unknowable factors or all possible future implications
for a group or a parent company associated with a course of action
such as Brexit.
Material uncertainty related to going concern
We draw attention to the going concern note within the principal
accounting policies, which details the factors that the directors
have considered in making their going concern assessment. The
uncertainty as to the future impact of the recent COVID-19 outbreak
has been included as part of the directors' consideration, and they
have considered the reasonably plausible impact of the outbreak on
the group's trading and cash flow forecasts. As stated in the going
concern note, these events or conditions, along with the other
matters as set forth in the going concern note, indicate that a
material uncertainty exists that may cast significant doubt on the
group's and the parent company's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In concluding that a material uncertainty exists, our audit work
included, but was not restricted to:
-- obtaining management's base case cash flow forecasts covering
the period to March 2022, assessing how these cash flow forecasts
were compiled and assessing their appropriateness by applying
relevant sensitivities to the underlying assumptions, and
challenging those assumptions;
-- assessing the accuracy of management's past forecasting by
comparing management's forecasts for last year to the actual
results for last year and considering the impact on the base case
cash flow forecast;
-- obtaining management's worst-case scenario prepared to assess
the potential impact of Covid-19 on the business. We evaluated
management's assumptions regarding the impact of a reduction in
revenue. We considered whether the assumptions are consistent with
our understanding of the business derived from other detailed audit
work undertaken;
-- assessing the impact of the mitigating factors available to
management in respect of the ability to restrict cash impact,
including the level of available facilities; and
-- assessing the adequacy of related disclosures within the annual report and accounts.
Overview of our audit approach
* Overall materiality: GBP130,000, which represents 5%
of the group's loss before tax at the planning stage
of the audit, before the impairment of goodwill and
other non-current assets was recorded;
* Key audit matters in respect of the group were
identified as material uncertainty related to going
concern, revenue recognition and impairment of
goodwill and other non-current assets, and in respect
of the parent company, impairment of investments in
subsidiaries; and
* We assessed the components within the group and
performed a full scope audit of the financial
statements of Jaywing plc and of the financial
information of all non-dormant UK components. We
performed specified audit procedures on the financial
information of the Australian components.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those that had
the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the material uncertainty
related to going concern section, we have determined the matters
described below to be the key audit matters to be communicated in
our report.
How the matter was addressed
Key Audit Matter - Group in the audit - Group
====================================== =============================================================
Revenue recognition Our audit work included, but
Revenue is a major driver was not restricted to:
of the business and under * assessing whether the revenue recognition policy is
ISA (UK) 240 'The Auditor's in accordance with IFRS 15 'Revenue from Contracts
Responsibilities Relating with Customers';
to Fraud in an Audit of Financial
Statements', there is a presumed
risk of fraud in revenue recognition * testing a sample of contract revenue to the group's
that could result in material accounting policy to determine whether it has been
misstatements. recognised in line with the policy;
The group enters into a high
volume of transactions and
some contracts are entered * agreeing a sample of revenue transactions to customer
into which span the 31 March payments, remittances and other evidence of
2020 year end. These contracts performance of the service;
have varying terms and degrees
of complexity. There is a
risk that the deferral and * performing analytical procedures, including trend and
recognition of revenues does ratio analysis comparing results to prior year; and
not match the underlying terms
of customer contracts, in
particular the period over * testing revenue recognised around the year end to
which the performance obligations ensure it is recorded in the correct period.
are met, or is not in accordance
with the requirements of IFRS
15 'Revenue from Contracts The group's accounting policy
with Customers'. on revenue, including its
Revenue recognition is dependent recognition, is shown in the
on management judgement, heightening financial statements.
this risk. Key observations
We therefore identified revenue Based on our audit work, we
recognition as a significant did not identify any material
risk, which was one of the misstatement in revenue recognition
most significant assessed and we concluded that revenue
risks of material misstatement. was recognised in accordance
with the group's accounting
policy and IFRS 15 'Revenue
from Contracts with Customers.'
====================================== =============================================================
Impairment of goodwill and Our audit work included, but
other non-current assets was not restricted to:
The carrying value of goodwill * assessing whether the accounting policy for
and other non-current assets intangible assets and goodwill is in accordance with
at 31 March 2020 was GBP33.1 IAS 38 'Intangible Assets' and IAS 36 'Impairment of
million. The group's performance Assets', and whether the accounting policy had been
in the first half of the year applied consistently
was below management's expectations,
giving rise to a risk that
the carrying value of these * assessing the integrity of the impairment models by
assets exceeds their recoverable testing the mechanical accuracy;
amount.
Management performs an impairment
review on an annual basis * understanding the process used by management to
using discounted cash flows determine the discount rates, and using auditor's
on a value in use basis. experts to evaluate them against their expectations
The key judgements in assessing and the industry norms;
goodwill and other non-current
assets for impairment include
t he growth and discount rates * assessing the appropriateness of the cash generating
applied in the discounted units identified;
cash flow calculations, due
to the sensitivity of these
assumptions to changes, and * assessing the appropriateness of any changes to
the identification of cash assumptions since the prior period;
generating units.
We therefore identified impairment
of goodwill and other non-current * challenging the cash flow forecasts with reference to
assets as a significant risk, historical forecasts and actual performance to
which was one of the most support any significant expected future changes to
significant assessed risks the business; and
of material misstatement.
* assessing the adequacy of the disclosures included
within the financial statements for compliance with
IAS 36 'Impairment of Assets'.
The group's accounting policy
on intangible assets and goodwill,
and on impairment are shown
in the financial statements
and related disclosures are
included in notes 15 and 16.
Key observations
From the audit work we performed,
we identified that the discount
rate calculated by management
was outside of our expectations.
As a result of our challenge,
a material adjustment has
been made by management to
the impairment recorded in
the financial statements.
No other issues were identified
from the audit work we performed
in this area.
Based on our audit work, we
have concluded that the impairment
of goodwill and other non-current
assets has been accounted
for in accordance with IAS
36, and that the disclosures
made in notes 15 and 16 to
the financial statements appropriately
describe this matter.
====================================== =============================================================
Key Audit Matter - Parent How the matter was addressed
company in the audit - Parent company
====================================== =============================================================
Impairment of investments Our audit work included, but
in subsidiaries was not restricted to:
The carrying value of the * assessing whether the accounting policy for
parent company's investments investments in subsidiaries is in accordance with IAS
in subsidiaries at 31 March 27 'Separate Financial Statements' and IAS 36
2020 was GBP32.5 million. 'Impairment of Assets', and whether the accounting
The group's performance in policy had been applied consistently;
the first half of the year
was below management's expectations,
giving rise to a risk that * assessing the integrity of the impairment models by
the carrying value of these testing the mechanical accuracy;
assets exceeds their recoverable
amount.
Management performs an impairment * understanding the process used by management to
review on an annual basis determine the discount rates, and using auditor's
using discounted cash flows experts to evaluate them against their expectations
on a value in use basis. and the industry norms;
The key judgements in assessing
the carrying value of investments
in subsidiaries for impairment * assessing the appropriateness of any changes to
include t he growth and discount assumptions since the prior period; and
rates applied in the discounted
cash flow calculations, due
to the sensitivity of these * challenging the cash flow forecasts with reference to
assumptions to changes. historical forecasts and actual performance to
We therefore identified impairment support any significant expected future changes to
of investments in subsidiaries the business.
as a significant risk, which
was one of the most significant
assessed risks of material The company's accounting policy
misstatement. on the valuation of investments
is shown in note 1 to the financial
statements and related disclosures
are included in K.
Key observations
Based on our audit work, we
have concluded that the impairment
of investments is accounted
for in accordance with the
requirements of IAS 36.
====================================== =============================================================
Our application of materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality in determining the nature, timing
and extent of our audit work and in evaluating the results of that
work.
Materiality was determined as follows:
Materiality Group Parent company
measure
===================== ================================= =================================
Financial statements GBP130,000, which is GBP89,000, which represents
as a whole 5% of the group's loss 1% of the parent company's
before tax at the planning total assets, capped
stage of the audit, at 68% of group materiality.
before the impairment This benchmark is considered
of goodwill and other the most appropriate
non-current assets given the activities
was recorded. We chose of the parent company
not to revise our materiality primarily being that
during the course of of a holding company,
the audit once the and therefore its major
final loss before tax, activities relate to
which was higher than its assets.
the loss at the planning Materiality for the
stage, was known. This current year is lower
benchmark is considered than the level that
the most appropriate we determined for the
because earnings before year ended 31 March
tax (EBT), which is 2019, which reflects
a loss before tax in the reduction in the
the current year, is total assets of the
a key measure of performance parent company at the
for the stakeholders year end and the capping
of the group. at a lower percentage
Materiality for the of group materiality,
current year is lower which was also lower,
than the level that this year.
we determined for the
year ended 31 March
2019 which reflects
the lower measurement
percentage applied
to the benchmark this
year of 5% compared
to 10.5% last year,
although the loss before
tax at the planning
stage of the audit
this year was actually
higher.
===================== ================================= =================================
Performance 75% of financial statement 75% of financial statement
materiality materiality. materiality.
used to drive
the extent of
our testing
===================== ================================= =================================
Specific materiality We determined a lower We determined a lower
level of specific materiality level of specific materiality
for certain areas such for certain areas such
as directors' remuneration as directors' remuneration
and related party transactions. and related party transactions.
===================== ================================= =================================
Communication GBP6,500 and misstatements GBP4,500 and misstatements
of misstatements below that threshold below that threshold
to the audit that, in our view, that, in our view,
& risk committee warrant reporting on warrant reporting on
qualitative grounds. qualitative grounds.
===================== ================================= =================================
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a
thorough understanding of the group's business, its environment and
risk profile and in particular included:
-- documenting the processes and controls covering all of the
significant risks and evaluating the design and implementation of
those controls;
-- evaluation by the group audit team of identified components
to assess the significance of that component and to determine the
planned audit response based on a measure of materiality.
Significance was determined as a percentage of the group's total
assets, revenues and loss before tax;
-- a full scope statutory audit of the financial statements of
the parent company and of the financial information of all other
non-dormant UK-based group entities;
-- specified audit procedures on financial information of the Australian components;
-- there has been no change in the overview of the scope of the
current year audit from the scope of that of the prior year;
-- we performed a full scope audit of the financial statement of
the parent company, and of the UK trading entities. The components
that were subject to full scope audit procedures made up 84% of the
group's revenue and 93% of the group's net assets; and
-- audit work on all components in the UK was performed by the
group engagement team. The audit work on all components in
Australia was carried out by Grant Thornton Australia under the
direction and supervision of the group engagement team.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report and accounts, other than the financial statements and our
auditor's report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies
Act 2006 is unmodified
In our opinion, based on the work undertaken in the course
of the audit:
* the information given in the strategic report and the
directors' report for the financial year for which
the financial statements are prepared is consistent
with the financial statements; and
* the strategic report and the directors' report have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report under the Companies
Act 2006
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors for the financial statements
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and the parent company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Donna Steel
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
SHEFFIELD
25 November 2020
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2020 2019
Continuing operations Note GBP'000 GBP'000
Revenue 1 29,723 35,554
Direct Costs (5,680) (5,709)
-------- --------
Net Revenue 24,043 29,845
Other operating income 2 38 13
Operating expenses 3 (32,955) (30,667)
-------- --------
Operating loss from continuing
operations (8,874) (809)
-------- --------
Finance income 4 - 4
Finance costs 5 (518) (305)
-------- --------
Net financing costs (518) (301)
-------- --------
Loss before tax from continuing
operations (9,392) (1,110)
Tax credit 6 436 175
-------- --------
Loss after tax from continuing
operations (8,956) (935)
-------- --------
Loss for the year from
discontinued operations - (1,610)
Loss for the year (8,956) (2,545)
Loss for the year is attributable
to:
Non-controlling interests 188 140
Owners of the parent (9,144) (2,685)
-------- --------
(8,956) (2,545)
Other comprehensive income
Items that will be reclassified
subsequently to profit
or loss
Exchange differences on
retranslation of foreign
operations 28 (155) 20
Total comprehensive income
for the period (9,111) (2,525)
-------- --------
Total comprehensive income
is attributable to:
Non-controlling interests 188 140
Owners of the Parent (9,299) (2,665)
-------- --------
(9,111) (2,525)
Basic loss per share 7
Loss per share from continuing
operations (9.95p) (1.15p)
Loss per share from discontinued
operations - (1.72p)
-------- --------
Total (9.95p) (2.87p)
The accompanying Notes form part of these Consolidated Financial
Statements.
Net Revenue was previously called Gross Profit. It is calculated
in the same way, as revenue less third party direct cost of
sales.
Consolidated Balance Sheet
As at 31 March 2020 2019
Note GBP'000 GBP'000
Non-current assets
Property, plant and equipment 13 2,887 1,015
Goodwill 15 27,586 33,054
Other intangible assets 16 2,604 4,364
-------- --------
33,077 38,433
-------- --------
Current assets
Trade and other receivables 17 5,877 8,256
Current tax asset 391 -
Cash and cash equivalents 1,996 690
-------- --------
8,264 8,946
-------- --------
Total assets 41,341 47,379
-------- --------
Current liabilities
Other interest-bearing loans
and borrowings 18 7,939 1,800
Trade and other payables 19 8,447 9,546
Current lease liabilities 14 678 -
Current tax liabilities 106 205
Provisions 20 42 42
-------- --------
17,212 11,593
-------- --------
Non-current liabilities
Other interest-bearing loans
and borrowings 18 - 3,850
Non-current lease liabilities 14 1,515 -
Deferred tax liabilities 21 422 656
-------- --------
1,937 4,506
-------- --------
Total liabilities 19,149 16,099
-------- --------
Net assets 22,192 31,280
-------- --------
Equity
Equity attributable to owners
of the parent
Share Capital 22 34,992 34,992
Share Premium 23 10,088 10,088
Capital Redemption Reserve 25 125 125
Shares purchased for treasury 24 (25) (25)
Share Option Reserve 26 696 838
Foreign Currency Translation
Reserve 28 (155) -
Retained Earnings 29 (24,868) (15,889)
-------- --------
Equity attributable to owners
of the parent 20,853 30,129
Non-controlling interest 27 1,339 1,151
Total equity 22,192 31,280
-------- --------
These Financial Statements were approved by the Board of
Directors on 25 November 2020 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 2020 2019
Note GBP'000 GBP'000
Cash flow from operating activities
Loss after tax (8,956) (2,545)
Adjustments for:
Depreciation, amortisation and impairment 8,333 3,440
Loss on sale of HSM Limited - 1,370
Financial income - (4)
Financial expenses 518 305
Share-based payment expense 3 (484) 177
Taxation charge (436) (175)
------- -------
Operating cash flow before changes in working
capital (1,025) 2,568
Decrease in trade and other receivables 2,428 1,599
(Decrease)/increase in trade and other payables (450) (1,745)
------- -------
Cash generated from operations 953 2,422
Interest received - 4
Interest paid (279) (305)
Tax paid (309) (287)
------- -------
Net cash flow from operating activities 365 1,834
------- -------
Cash flow from investing activities
Payment of deferred consideration (325) (592)
Proceeds from sale of HSM Limited - 403
Acquisition of intangible assets (108) (297)
Acquisition of property, plant and equipment 13 (66) (252)
------- -------
Net cash outflow from investing activities (499) (738)
------- -------
Cash flow from financing activities
Increase in borrowings 18 7,700 -
Repayment of borrowings 18 (5,650) (900)
Repayment of Lease Liabilities (IFRS16) 14 (610) -
Acquisition of non-controlling interest - (138)
Net cash inflow / (outflow) from financing
activities 1,440 (1,038)
------- -------
Net increase in cash and cash equivalents 1,306 58
Cash and cash equivalents at beginning of
year 690 632
------- -------
Cash and cash equivalents at end of year 1,996 690
------- -------
Cash and cash equivalents comprise:
Cash at bank and in hand 1,996 690
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
2018 34,992 10,088 125 (25) 736 (20) (13,773) 32,123 1,718 33,841
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Acquisition of
Subsidiaries - - - - - - 569 569 (707) (138)
Charge in
respect
of
share-based
payments - - - - 102 - - 102 - 102
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Transactions
with
owners - - - - 102 - 569 671 (707) (36)
Profit/(loss)
for
the period - - - - - - (2,685) (2,685) 140 (2,545)
Retranslation
of
foreign
currency - - - - - 20 - 20 - 20
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
income for
the period - - - - - 20 (2,685) (2,665) 140 (2,525)
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
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
-------- -------- ----------- --------- -------- ------------ --------- ------------- ---------------- --------
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 Group's statutory accounts for 31 March 2019 have been
delivered to the Registrar of Companies and those for 31 March 2020
will be delivered following the Company's General Meeting. The
Auditor's reports on both the 31 March 2019 and 31 March 2020
accounts were unqualified, did not draw attention to any matters by
way of an emphasis and did not contain any statement under Section
498 of the Companies Act 2006.
The Consolidated Financial Statements have been prepared and
approved by the Directors in accordance with International
Financial Reporting Standards as adopted by the EU (Adopted IFRSs).
The Consolidated Financial Statements have been prepared under the
historical cost convention.
The accounting policies set out in the most recently published
statutory financial statements have been followed. The policies
have remained unchanged from the previous year, except as set out
below.
Changes in accounting policies
New and revised standards that are effective for annual periods
beginning on or after 1 April 2019
The Group has adopted IFRS 16 during the year. Details of the
impact of this is below and in the Notes to the Accounts.
Going concern
In determining the appropriate basis of preparation of the
financial statements, the Directors are required to consider
whether the Company and 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 a period in excess of
12 months from the date of signing the financial statements. 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.
The second quarter has continued to see a positive trend. Whilst
there remains considerable uncertainty in markets generally, the
Group believes that it is well placed to benefit as economic
activity recovers.
The impact of COVID-19 indicates the existence of a material
uncertainty which may cast significant doubt about the Company's
and the Group's ability to continue as a going concern. The Company
and Group financial statements do not include the adjustments that
would result if the Company and Group were unable to continue as a
going concern. Notwithstanding this material uncertainty, the
Directors have a reasonable expectation that the Company and Group
have 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.
The Group recognises contract liabilities for consideration
received in respect of unsatisfied performance obligations and
reports these amounts as other liabilities in the statement of
financial position (see Note 19). Similarly, if the Group satisfies
a performance obligation before it receives the consideration, the
Group recognises a receivable in its statement of financial
position (see Note 17).
Monthly retainers
A client will sign up to a contract for a period of between six
and 18 months, with a fixed fee each month for an agreed amount of
work to be performed. Under each contract, there may be more than
one service provided to the customer, each with different
performance obligations, such as PPC and SEO management, which will
have agreed KPIs. These services will be set out in the contract
with revenue amounts associated and the revenue streams will be
recognised separately.
The transaction price is set out in the contract for each
service provided and revenue is allocated to the various
performance obligations on this basis. The customer may choose to
take additional services for a period of time, which would be
subject to a separate agreement. Any performance fees payable under
a contract would relate to a specific month and be calculated in
line with the provisions set out in the contract.
Revenue is recognised over time as the customer simultaneously
receives and consumes the benefits of the services as the service
is performed. It is recognised using the output method, on a
straight-line basis over the life of the contract as the amount of
work required to perform under these contracts does not vary
significantly from month to month, therefore the straight-line
method provides a faithful depiction of the transfer of goods or
services.
Project-based
A client will enter into a framework agreement that covers all
work performed by Jaywing, and will then issue a brief or PO for a
specific piece of work to be performed. This could be the
development of a website for a client, or the production of a
creative campaign. The work would normally take a period of between
one and six months to complete.
Normally, a specific brief or work order is provided for a
project under the overall framework agreement. This will detail the
services to be provided to the customer, with a price set out
against each element as appropriate. The transaction price is set
out in the work order for each element of the project. The customer
may choose to vary the scope at any stage, and that would be
subject to an updated work order. That work order would still be
part of the original contract as those services would not be
distinct from those in the original contract.
Revenue is recognised over time, using the input method as
Jaywing's performance creates or enhances an asset that the
customer controls as the asset is created or enhanced, and the
revenue recognised reflects the efforts or inputs Jaywing has made
to the satisfaction of the performance obligation.
Consulting day rates
A client will enter into a contract for a piece of work that is
quoted as a number of days charged at a rate per day. This work
will be either risk, marketing or data based and could involve
building models, databases and analysis of data. Invoices will
usually be raised monthly for the number of days of work
performed.
A specific piece of work is contracted for, which will normally
be a number of days' work charged at a rate per day, with different
rates for different levels of seniority. The transaction price is
set out in the contract. The customer may choose to vary the scope
at any stage, and that would be subject to an updated work
schedule. That work order would still be part of the original
contract as those services would not be distinct from those in the
original contract.
Revenue is recognised over time as the customer simultaneously
receives and consumes the benefit of the services as the services
are performed. It is recognised using the input method, based on
the number of days' work performed during the month.
Licences
A client enters into a contract for a product licence, including
support from Jaywing, to run that product and interpret the results
from it. The product and support are not separately identifiable
because the client is not able to operate the product licence
without this support as they do not have the skills or a login to
the system.
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 33 to the Consolidated Financial Statements.
Classification of instruments issued by the Group
Instruments issued by the Group are treated as equity (i.e.
forming part of shareholders' funds) only to the extent that they
meet the following two conditions:
-- they include no contractual obligations upon the Company (or
Group as the case may be) to deliver cash or other financial
assets, or to exchange financial assets or financial liabilities
with another party, under conditions that are potentially
unfavourable to the Company (or Group); and
-- where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments, or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the items are
classified as a financial liability. Where the instrument so
classified takes the legal form of the Company's own shares, the
amounts presented in these Financial Statements for called up Share
Capital and Share Premium Account exclude amounts in relation to
those shares.
Finance payments associated with financial liabilities are dealt
with as part of finance expenses. Finance payments associated with
financial instruments that are classified in equity are dividends
and are recorded directly in equity.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Depreciation is charged to profit or loss on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. Land is not depreciated. The
estimated useful lives are as follows:
Leasehold improvements - 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 Massive Group PTY and Frank Digital PTY
have been valued by an independent assessor and are recognised with
both a service and non-service element in the accounts. The
non-service element is fully recognised as at the date of
acquisition and the fair value reviewed annually. The service
element is treated as a cash-settled share-based payment with the
share-based payment valued at the point of inception and the cost
being spread over the life of the asset.
Fair value measurement
Management uses valuation techniques to determine the fair value
of financial instruments and non-financial assets. This involves
developing estimates and assumptions consistent with how market
participants would price the instrument. Management bases its
assumptions on observable data as far as possible, but this is not
always available. In that case, management uses the best
information available. Estimated fair values may vary from the
actual prices that would be achieved in an arm's length transaction
at the reporting date (see Note 35).
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension
plans are recognised as an expense in profit or loss as
incurred.
Share-based payment transactions
The weighted average fair value for the EBITDA performance
options was calculated using the Black-Scholes Merton Option
Pricing Model, and the fair value for the share price options was
calculated using the Monte Carlo Model. This is charged to profit
or loss over the vesting period of the award. The charge to profit
or loss takes account of the estimated number of shares that will
vest. Where the options do not have any market conditions attached,
the number expected to vest is reassessed at each reporting period.
All share-based remuneration is equity-settled. Provision is made
for National Insurance when the Group is committed to settle this
liability. The charge to profit or loss takes account of the
options expected to vest, is deemed to arise over the vesting
period, and is discounted.
Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation. If the effect is
material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the
risks specific to the liability.
Expenses
Leases
The Company has adopted IFRS 16 - Leases for the financial year
ended 31 March 2020, and it has chosen to use the modified
retrospective approach to adoption which means there are no
restatements to the prior year figures. This has resulted in a
change to accounting policy and this is detailed fully in note
14.
IFRS 16 introduces a single lessee accounting model, whereby the
Company now recognises a lease liability and a right of use asset
at 1 April 2019 for leases previously classified as operating
leases. Within the income statement, operating lease charges, which
previously were included in administrative expenses, have been
replaced by depreciation and interest expenses.
See notes 14 and 30 for more details.
For the comparative period ended 31 March 2019, where the
Company is a lessee, payments made under an operating lease
agreement are recognised as an expense on a straight-line basis
over the lease term.
Incentives received to enter into an operating lease are
credited to the profit and loss account, to reduce the lease
expense, on a straight-line basis over the period of the lease.
Associated costs, such as maintenance and insurance, are expensed
as incurred.
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 areas: Brand
Performance, Online Performance and Data, Analysis &
Technology. Central Costs represents the Group's head office
function, along with intragroup transactions.
The Group derives its revenue from the provision of digital
marketing services.
Standards and interpretations in issue at 31 March 2020 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.
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.
Minority Interests
The profit or loss attributable to the minority ownership stakes
in subsidiary companies is transferred from Retained Earnings to
Minority Interest each year.
Notes to the Consolidated Financial Statements
1. Segmental analysis
During the year 2019/20, Jaywing reported its business
activities in three areas: Brand Performance, Online Performance
and Data, Analysis & Technology. From 1 April 2020, the Group
will report its revenues by market sector (Retail, FMCG, Financial
and Professional Services) as well as by main service segments,
reflecting the updated organisation structure of the Company which
is now organised by market channels.
The Group primarily derives its revenue from the provision of
digital marketing services in the UK. Approximately GBP3,863,000
(2019: GBP3,813,000) of sales were made to clients via the
Company's Australian subsidiaries. During the year, no customer
accounted for greater than 10% of the Group's revenue (2019: One
customer).
Group Net Revenue analysed by sector and geography is as
follows:
Year ended 31 March 2020
Brand Performance Online Performance Data, Analysis Total
& Technology
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 5,872 8,282 6,026 20,180
Australia 1,399 2,464 - 3,863
------------------ ------------------- --------------- --------
Total 7,271 10,746 6,026 24,043
------------------ ------------------- --------------- --------
Year ended 31 March 2019
Brand Performance Online Performance Data, Analysis Total
& Technology
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 7,894 10,195 7,943 26,032
Australia 1,287 2,526 - 3,813
------------------ ------------------- --------------- --------
Total 9,181 12,721 7,943 29,845
------------------ ------------------- --------------- --------
For 2020, revenue includes GBP1,530k (2019: GBP1,133k) included
in the contract liability balance at the beginning of the
period.
The Group's non-current assets (other than financial
instruments, investments accounted for using the equity method,
deferred tax assets and post-employment benefit assets) are located
into the following geographic regions:
2020 2019
GBP'000 GBP'000
United Kingdom 32,963 38,295
Australia 114 138
------- -------
33,077 38,433
------- -------
Non-current assets are allocated based on their physical
location. The above table does not include discontinued operations
(disposal groups), for which revenue and assets can be attributed
to United Kingdom.
Capital additions; Property, plant and equipment
Brand Performance Online Performance Data, Analysis Central Total
& Technology Costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 31 March 2020 23 30 5 8 66
----------------- ------------------ -------------- ------- -------
Year ended 31 March 2019 70 160 - 22 252
----------------- ------------------ -------------- ------- -------
2. Other operating income
2020 2019
GBP'000 GBP'000
Other operating income 38 13
------- -------
During the years to 31 March 2019 and 31 March 2020, the Group
received money from the administrator of a client for a contractual
obligation to perform services on their behalf. During the year,
the Group received a further distribution of 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
2020 2019
Continuing operations: GBP'000 GBP'000
Wages and salaries 16,511 17,890
Social Security Costs 1,793 2,003
Other Pension Costs 1,021 1,189
Share-based payments charges / (credits) (484) 177
Depreciation 997 412
Restructuring costs 867 -
Amortisation 1,547 1,833
Impairment to the carrying value of goodwill 5,468 1,050
Impairment of other intangible assets 321 -
Other operating expenses 4,914 6,113
------- -------
Total operating expenses 32,955 30,667
------- -------
4. Finance income
2020 2019
GBP'000 GBP'000
Interest income - 4
Total - 4
------- -------
5. Finance costs
2020 2019
GBP'000 GBP'000
Interest expense 404 292
Interest on lease liabilities 101 -
Finance charge on acquisition 13 13
------- -------
Total 518 305
------- -------
6. Tax credit
2020 2019
GBP'000 GBP'000
Recognised in the consolidated statement of
comprehensive income:
Current year tax (193) 91
Origination and reversal of temporary differences (243) (266)
------- -------
Total tax credit (436) (175)
------- -------
Reconciliation of total tax charge:
Loss before tax (9,392) (1,110)
------- -------
Taxation using the UK Corporation Tax rate of
19% (2019: 19%) (1,784) (211)
Effects of:
Non-deductible expenses 1,348 36
Total tax credit (436) (175)
------- -------
7. Loss per share
2020 2019
Pence per Pence per
Share Share
Basic loss per share from continuing operations (9.95p) (1.13p)
Basic loss per share from discontinued operations - (1.72p)
--------- ---------
Basic total loss per share (9.95p) (2.85p)
Diluted loss per share from continuing operations (9.95p) (1.13p)
Diluted loss per share from discontinued operations - (1.72p)
--------- ---------
Diluted total loss per share (9.95p) (2.85p)
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:
2020 2019
GBP'000 GBP'000
Loss for the year attributable to shareholders
from continuing operations (9,299) (1,055)
Loss for the year attributable to shareholders
from discontinued operations - (1,610)
------- -------
Total loss for the year attributable to shareholders (9,299) (2,665)
Weighted average number of ordinary shares in issue:
2020 2019
Number Number
Basic 93,432,217 93,432,217
Adjustment for share options 3,243,178 1,706,627
Diluted 96,675,395 95,138,844
---------- ----------
8. Expenses and auditor's remuneration
2020 2019
GBP'000 GBP'000
The following are included in profit before
tax:
Depreciation of property, plant and equipment 331 412
Depreciation of right of use assets 666 -
Amortisation of other intangible assets 1,547 1,833
Employee emoluments 18,841 21,259
------- -------
Auditor's remuneration:
Audit of Company Financial Statements 37 36
Other amounts payable to the auditor and its
associates in respect of:
Audit of Subsidiary Company Financial Statements 110 81
Audit related assurance services 4 19
Taxation compliance services 28 35
Taxation advisory services 44 7
------- -------
Amounts paid to the Group's auditor in respect of services to
the Company, other than the audit of the Company's Financial
Statements, have not been disclosed separately as the information
is required instead to be disclosed on a consolidated basis.
9. Key management personnel compensation
Key management of the Group is considered to be the Board of
Directors and the Senior Leadership Team.
2020 2019
GBP'000 GBP'000
Short-term benefits:
Salaries including bonuses 1,912 2,183
Social security costs 246 298
Total short-term benefits 2,158 2,481
Share-based payment charges / (credit) (484) 177
Defined contribution pension plan 190 208
Key management compensation 1,864 2,866
------- -------
Further information in respect of Directors is given in the
Directors' Remuneration Report.
Remuneration in respect of Directors was as follows:
2020 2019
GBP'000 GBP'000
Emoluments receivable 733 842
Fees paid to third parties for Directors' services 30 30
Company pension contributions to money purchase
pension schemes 87 97
------- -------
850 969
------- -------
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 GBP257,000
(2019: GBP264,000).
10. Staff numbers and costs
The average number of persons employed by the Group (including
Directors) during the year, analysed by category, was as
follows:
2020 2019
Continuing operations: Number Number
Management and administration 73 80
Client Service Staff 287 332
360 412
------ ------
The aggregate payroll costs of these persons were as
follows:
2020 2019
GBP'000 GBP'000
Wages and salaries 16,511 17,890
Social security costs 1,793 2,003
Other pension costs 1,021 1,189
Share option charges / (credits) - PSP Options
(see Note 11) (409) 184
Share option (credits) - Employers NI (see Note
11) (75) (7)
------- -------
18,841 21,259
------- -------
11. Employee benefits
The Company grants share options under the Jaywing plc
Performance Share Plan, more details of which are given in the
Directors' Remuneration Report.
Details of the share options outstanding at the end of the year
are as follows, the share option schemes terminated after the
balance sheet date:
2020 2019
Weighted Weighted
average average
Number of exercise Number of exercise
share options price share options price
At start of the year 6,169,926 5.0p 6,126,322 5.0p
Issued during the year - 5.0p 2,546,042 5.0p
Exercised during the year - 5.0p - 5.0p
Lapsed during the year (2,868,726) 5.0p (2,502,438) 5.0p
At end of the year 3,301,200 5.0p 6,169,926 5.0p
-------------- --------- -------------- ---------
Exercisable at end of year 850,865 5.0p 949,639 5.0p
-------------- --------- -------------- ---------
Share options outstanding at the end of the year have an
exercise price of 5 pence. Awards of share options are made on an
individual basis with particular performance criteria relevant to
the participant. Options are usually granted for a maximum of five
years. The share options scheme was terminated in October 2020.
Share options outstanding at the year-end were as follows:
As at 31 March 2020
Period of exercise
Number Exercise price From To
3,301,200 5.0p 01/04/2017 30/09/2022
As at 31 March 2019
Period of exercise
Number Exercise price From To
6,169,926 5.0p 01/04/2017 30/09/2022
All schemes expire 6 months after the third anniversary of
vesting. The last scheme expires on 30/09/2022. The schemes were
terminated in October 2020 when all vesting periods came to an end
due to members leaving the scheme or the company.
On 4 May 2016, 30 September 2016 and 2 December 2018, share
options were granted to employees in order to incentivise
performance. The vesting conditions for these share options relate
to either EBITDA performance in the period commencing 1 April 2016
and continued employment with Jaywing.
Charge to the statement of comprehensive income
Under IFRS 2, the Group is required to recognise an expense in
the relevant Company's Financial Statements. The expense is
apportioned over the vesting period based upon the number of
options which are expected to vest and the fair value of those
options at the date of grant.
For the awards made, the Group commissioned an independent
valuation from BDO LLP and adopted their findings.
The weighted average fair value for the EBITDA performance
options was calculated using the Black-Scholes Merton Option
Pricing Model, and the fair value for the share price options was
calculated using the Monte Carlo Model. The following inputs were
used:
2020
GBP'000
Share price at date of grant 19p
Exercise price 5p
Expected volatility 37.3%
Dividend yield 0%
Risk-free rate 0.88%
Option life 2.3 years
Expected volatility was determined by calculating the standard
deviation of the share price multiplied by the square root of the
relevant time period of the option grant to give an indication of
the share price volatility. The risk-free rate was calculated using
the yield on long-dated UK Government Treasury Gilts at each date
of grant.
The fair value of the EBITDA performance options was calculated
between 14.10p and 23.12p, depending on the period to which the
options relate.
The fair value of the share price options and the retention
options was calculated as 6.13p.
12. Interests in Subsidiaries
The details of subsidiaries held directly by the Group are set
out in Note 12 of the plc Parent Company accounts. The Group
includes two subsidiaries (2019: 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
2020 2019 2020 2019 2020 2019
% % GBP'000 GBP'000 GBP'000 GBP'000
Massive Group
PTY 25 25 147 109 1,056 909
Frank Digital
PTY 25 25 41 31 283 242
188 140 1,339 1,151
No dividends were paid to the NCI during the years 2020 and
2019. During the year ended 31 March 2019, Jaywing plc acquired the
25% of Jaywing Innovation Ltd not previously owned for
consideration of GBP138k and the GBP707k was transferred into
Retained Earnings as can be seen on the Consolidated Statement of
Changes in Equity.
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).
Management are of the view that Massive Group PTY is material to
the results of the Group and further financial information is
disclosed below:
2020 2019
GBP'000 GBP'000
Non-current assets 88 108
Current assets 1,738 1,439
------- -------
Total assets 1,826 1,547
Non-current liabilities - -
Current liabilities (302) (438)
------- -------
Total liabilities (302) (438)
Equity attributable to owners of the parent 1,143 832
Non-controlling interest 1,056 909
------- -------
2020 2019
GBP'000 GBP'000
Revenue 2,500 2,831
Profit and total comprehensive income for the
year attributable to owners of the parent 408 436
Profit and total comprehensive income for the
year attributable to NCI 147 109
------- -------
Profit and total comprehensive income for the
year 554 545
2020 2019
GBP'000 GBP'000
Net cash from operating activities 398 -
------- -------
13. Property, plant and equipment
Leasehold Office
Buildings improvements equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April 2018 - 1,737 2,373 4,110
Additions - 106 146 252
Disposals - (405) (1,108) (1,513)
At 31 March 2019 - 1,438 1,411 2,849
Additions - - 66 66
Recognition of right
of use asset 2,673 - 130 2,803
Disposals - - (432) (432)
--------- ------------- ----------- -------
At 31 March 2020 2,673 1,438 1,175 5,286
--------- ------------- ----------- -------
Depreciation
At 1 April 2018 - 1,222 1,445 2,667
Depreciation charge
for the year - 183 322 505
Depreciation on disposals - (387) (951) (1,338)
--------- ------------- ----------- -------
At 31 March 2019 - 1,018 816 1,834
Depreciation charge
for the year - 40 291 331
Depreciation of right
of use asset 640 - 26 666
Depreciation on disposals - - (432) (432)
--------- ------------- ----------- -------
At 31 March 2020 640 1,058 701 2,399
--------- ------------- ----------- -------
Net book value
At 31 March 2020 2,033 380 474 2,887
--------- ------------- ----------- -------
At 31 March 2019 - 420 595 1,015
--------- ------------- ----------- -------
At 1 April 2018 - 515 928 1,443
--------- ------------- ----------- -------
The assets are covered by a fixed charge in favour of the
Group's lenders.
14. 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 statement of financial
position
The balance sheet shows the following amounts relating to
leases:
2020 2019
GBP'000 GBP'000
Right of use assets
Buildings 2,033 -
Plant and machinery 104 -
------- -------
2,137 -
======= =======
Lease liabilities
Current 678 -
Non-current 1,515 -
2,193 -
======= =======
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to
leases:
2020 2019
GBP'000 GBP'000
Depreciation charge of right of use assets
Buildings 640 -
Plant and machinery 26 -
------- -------
666 -
------- -------
Interest expense (included in finance cost) 101 -
------- -------
The Group leases four offices and printers. The Company 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.
Until the 2020 financial year, leases of property, plant and
equipment were classified as operating leases, see note 30 for
details. From 1 April 2019, leases are recognised as a right of use
asset and a corresponding liability at the date at which the leased
asset is available for use by the group.
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.
15. Goodwill
Goodwill
GBP'000
Cost and net book value
At 1 April 2018 34,104
Impairment in year (1,050)
At 31 March 2019 33,054
Impairment in year (5,468)
--------
At 31 March 2020 27,586
========
2020 2019
Brand Performance GBP'000 GBP'000
Scope Creative Marketing Limited 7,570 5,550
Jaywing Central Limited 2,004 5,205
Bloom Media (UK) Limited - 4,287
Frank Digital PTY 818 818
Online Performance
Epiphany Solutions Limited 5,957 5,957
Massive Group PTY 1,895 1,895
Data, Analysis & Technology
Alphanumeric Limited 9,342 9,342
27,586 33,054
-------- -------
Goodwill and other intangible assets have been tested for
impairment by assessing the value in use of the relevant cash
generating units. The value in use calculations were based on
projected cash flows in perpetuity. Budgeted cash flows for 2020/21
to 2027/28 were used. These were based on the forecast for 2021
with growth rates of 5% then applied to EBITDA for the following
two years, and 2.0% for subsequent years. In management's view this
is a conservative assumption.
In the year the Goodwill value of Bloom Media was transferred
into the balance for Scope Creative Marketing Limited.
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
2021/22 to 2022/23 5.0%
2023/24 to Perpetuity 2.0%
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 10.9%
(2019:10.2%). The individual cash generating units were assessed
for risk variances from the WACC, but in the absence of
geographical risk, currency risk and any significant price risk
variations, the same WACC was used for all the cash generating
units.
As a result of these tests, an impairment of GBP5,468k was
considered necessary (2019: GBP1,050k).
16. 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 2018 23,486 1,457 1,080 1,236 27,259
Additions during the year
from acquisitions - - - 251 251
Disposals during the year (2,181) - - (16) (2,197)
At 31 March 2019 21,305 1,457 1,080 1,471 25,313
Additions during the year - - - 108 108
At 31 March 2020 21,305 1,457 1,080 1,579 25,421
-------------- ------------- ------------ ----------- -------
Amortisation
At 1 April 2018 19,179 1,457 250 411 21,297
Amortisation charge for
the year 1,612 - 63 210 1,885
Amortisation adjustment - - - (52) (52)
Disposals (2,181) - - - (2,181)
At 31 March 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
-------------- ------------- ------------ ----------- -------
Net book amount
At 31 March 2020 1,078 - 716 810 2,604
-------------- ------------- ------------ ----------- -------
At 1 April 2019 2,695 - 767 902 4,364
-------------- ------------- ------------ ----------- -------
At 1 April 2018 4,307 - 830 825 5,962
-------------- ------------- ------------ ----------- -------
The remaining amortisation period for customer relationships are
two years. The remaining amortisation period for trademarks are
fourteen years.
The cost of brought forward customer relationships was
determined as at the date of acquisition of the subsidiaries by
professional valuers. The valuations used the discounted cash flow
method, assuming rates of customer attrition at 10% and sales
growth at 2% each year. The discount rate applied at that time to
the future cash flows were specific to each Subsidiary and were all
in the range 14.6% to 15.5%.
Trademarks represent the trading names used by the company.
These are estimated to have an economic life of 20 years. The
valuation used the discounted cash flow method, assuming an
estimated royalty rate of 2% and sales growth of 2% each year. The
valuation assumes that each year 80% to 90% of revenues are
generated using the Trademark and applied a discount rate of
19%.
Development costs relate to internally developed products that
are either sold to clients standalone or used to provide services
to them.
The order book represents contracted revenues over the next 12
months. The valuation used the discounted cash flow method,
assuming a net operating profit margin of 30.5%. The discount rate
applied was 15.8%.
Goodwill and other intangible assets have been tested for
impairment. The method, key assumptions and results of the
impairment review are detailed in Note 15. On the basis of this
review, it has been concluded that there is no need to impair the
carrying value of these intangible assets (2019: GBPNil).
17. Trade and other receivables
2020 2019
GBP'000 GBP'000
Trade receivables 4,503 6,215
Prepayments and accrued income 1,208 1,530
Deferred tax 104 95
Other receivables 62 416
------- -------
5,877 8,256
------- -------
The carrying amount of trade and other receivables approximates
to their fair value.
All of the Group's trade and other receivables have been
reviewed for indicators of impairment and lifetime credit losses.
Certain trade receivables were found to be impaired and a loss
allowance for lifetime credit losses has been recorded. The amount
charged to the consolidated income statement for the year in
relation to expected credit losses was GBP59,000 (2019: GBP87,000).
Trade and other receivables which are not impaired or past due are
considered by the Group to be of good credit quality.
The movement in the allowance for estimated irrecoverable
amounts can be reconciled as follows:
2020
GBP'000
Balance at start of the year 88
Amounts written off (uncollectible) (10)
Impairment loss reversed (3)
Impairment loss 97
Balance at end of the year 172
-------
18. Bank and overdraft, loans and borrowings
2020 2019
GBP'000 GBP'000
Summary
Borrowings 7,939 5,650
------- ---------
7,939 5,650
------- ---------
Borrowings are repayable as follows:
Within one year
Borrowings 7,939 1,800
------- ---------
Total due within one year 7,939 1,800
------- ---------
In more than one year but less than
two years - 3,850
In more than two years but less than
three years - -
In more than three years but less than
four years - -
Total amount due 7,939 5,650
Average interest rates at the
balance sheet date were: %%
Term loan 5.42 4.10
As the loans are at variable market rates their carrying amount
is equivalent to their fair value.
Reconciliation of Net debt
1 April Cash flow Accrued 31 March
2019 Interest 2020
not paid
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 690 1,306 - 1,996
Borrowings (5,650) (2,050) (239) (7,939)
-------- ---------- ---------- ---------
Net Debt (4,960) (742) (239) (5,943)
-------- ---------- ---------- ---------
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 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
------------ ------------ --------
Long-term Short-term Total
borrowings borrowings
GBP'000 GBP'000 GBP'000
1 April 2018 1,800 4,750 6,550
Cash-flows:
* Repayment (900) (3,550) (4,450)
* Proceeds 2,950 600 3,550
------------ ------------ --------
31 March 2019 3,850 1,800 5,650
------------ ------------ --------
19. Trade and other payables
2020 2019
GBP'000 GBP'000
Trade payables 2,301 2,604
Tax and social security 1,052 1,137
Other payables, accruals and deferred
income 5,094 5,805
------- -------
8,447 9,546
------- -------
The carrying amount of trade and other payables approximates to
their fair values. All amounts are short term.
Other payables, accruals and deferred income include deferred
consideration (comprising put/call options and other deferred
consideration) which is carried at fair value through profit and
loss (see Note 35).
20. Provisions
2020 2019
GBP'000 GBP'000
At start of the year 42 151
Disposal of HSM Limited - (109)
At end of the year 42 42
------- -------
Total provisions are analysed as follows:
Current 42 42
------- -------
42 42
------- -------
At 31 March 2020 a provision of GBP42,000 (2019: 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.
21. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities:
2020 2019
GBP'000 GBP'000
Accelerated capital allowances on property,
plant and equipment:
At start of year 12 (1)
Prior year adjustment (2) (2)
Origination and reversal of temporary
differences (37) 15
------- -------
At end of year (27) 12
------- -------
Other temporary differences:
At start of year 549 828
Prior year adjustment (7) 2
Origination and reversal of temporary
differences (197) (281)
------- -------
At end of year 345 549
------- -------
Total deferred tax:
At start of year 561 827
Rate change - -
Origination and reversal of temporary
differences (Note 6) (243) (266)
------- -------
At end of year 318 561
------- -------
Origination on acquisition
Deferred tax is included within:
Deferred tax liability 422 656
Deferred tax asset (104) (95)
------- -------
318 561
------- -------
The majority of the other temporary differences relates to the
liability arising on the valuation of intangible assets on
acquisition.
There are no deductible differences or losses carried forward
for which no deferred tax asset is recognised. There are no
temporary differences associated with investments in Subsidiaries
for which deferred tax liabilities have not been recognised.
22. Share Capital
Authorised:
45p deferred 5p ordinary
shares shares
GBP'000 GBP'000
Authorised Share Capital
at 31 March 2019 and
at 31 March 2020 45,000 10,000
------------- ------------
Allotted, issued and fully paid:
45p deferred 5p ordinary
shares shares
Number Number GBP'000
At 31 March 2019 67,378,520 93,432,217 34,992
At 31 March 2020 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.
23. Share Premium
2020 2019
GBP'000 GBP'000
At start and end of year 10,088 10,088
------- -------
24. Treasury Shares
2020 2019
GBP'000 GBP'000
At start and end of year (99,622 shares) (25) (25)
------- -------
25. Capital Redemption reserve
2020 2019
GBP'000 GBP'000
At start and end of year 125 125
------- -------
26. Share Option reserve
2020 2019
GBP'000 GBP'000
At start of year 838 736
Share option charge 23 102
Transfer in relation to lapsed share options (165) -
------- -------
At end of year 696 838
------- -------
The Board of Directors approved the original transfer of
reserves from Retained Earnings to a designated share option
reserve.
27. Non-Controlling Interest
2020 2019
GBP'000 GBP'000
At start of year 1,151 1,718
Disposal of Subsidiaries - (707)
Share of profit for the year 188 140
------- -------
At end of year 1,339 1,151
------- -------
28. Foreign Currency Translation Reserve
2020 2019
GBP'000 GBP'000
At start of year - (20)
Exchange differences on translation of foreign
operations (155) 20
At end of year (155) -
------- -------
29. Retained Earnings
2020 2019
GBP'000 GBP'000
At start of year (15,889) (13,773)
Acquisition of non-controlling interest - 569
Transfer in relation to lapsed share options 165 -
Retained loss for the year (9,144) (2,685)
At end of year (24,868) (15,889)
-------- --------
30. Operating leases
The Group's future minimum operating lease payments are as
follows:
Within 1 After 5
year 1 to 5 years years Total
GBP'000 GBP'000 GBP'000 GBP'000
31 March 2020 - - - -
31 March 2019 695 1,990 310 2,995
-------------- -------- ------------ ------- -------
During the year GBPnil (2019: GBP447,000) was recognised as an
expense in the Statement of Comprehensive Income in respect of
operating leases.
31. Capital commitments
The Group had no commitments to purchase property, plant and
equipment at 31 March 2020 (2019: GBPNil).
32. Related Parties
The services of Mark Carrington as Non-Executive Director of the
Company were purchased from Deacon Street Partners Limited for a
fee of GBP30,000 (2019: GBP30,000). At the year end, GBP7,500
(2019: 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 GBP5.2m ("Jaywing Facility") The
Major Shareholders immediately provided the Company with additional
secured facilities by increasing the Jaywing Facility by GBP3m to
GBP8.2m, 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 the term loan previously provided to Jaywing. At
the yearend GBP7,938,960 (2019: nil) was outstanding.
During the period, the company made sales of GBP27,889 (2019:
GBP25,683) to Run For All Limited, a company in which Mr R Shaw is
a Non-Executive Director. At 31 March 2020 the balance receivable
from Run For All Limited was GBP11,291 (2019: GBP23,205). Mr R Shaw
resigned from the board on 26 March 2020.
During the period, the company made sales of GBP5,144 (2019:
GBP59,661) to Impellam plc, a company that Lord Michael Ashcroft,
the largest Jaywing plc shareholder, is Chairman of. At 31 March
2020 the balance receivable from Impellam plc was GBPnil (2019:
GBP5,000).
33. Accounting estimates and judgements
Accounting estimates
Impairment of goodwill and other intangible assets
The carrying amount of goodwill is GBP27,586k (2019: GBP33,054k)
and the carrying amount of other intangible assets is GBP2,604k
(2019: GBP4,364k). The Directors are confident that the carrying
amount of goodwill and other intangible assets is fairly stated and
have carried out an impairment review. The forecast cash generation
for each CGU and the WACC represent significant assumptions and
should the assumptions prove to be incorrect, there would be a
significant risk of a material adjustment within the next financial
year. The sensitivity to the key assumptions is shown in Note
15.
Share-based payment charges / (credits)
On 4 May 2016, 30 September 2016 and 2 December 2018, share
options were granted to employees in order to incentivise
performance. These share options vest based upon conditions which
relate to either EBITDA performance in the period commencing 1
April 2016, the share price at various future dates or continued
employment with Jaywing.
The share-based payment charge consists of two elements, the
charge for the fair value at the date of grant and a charge for the
employer's NI. The fair value charge has been assessed using an
external valuation company, and judgement has been made on the
number of shares expected to vest based on the achievement of
EBITDA and share price targets.
Accounting judgements
Recognition of revenue
The Directors consider that they act as a principal in
transactions where the Group assumes the credit risk. Where this is
via an agency arrangement and the Group assumes the credit risk for
all billings, it therefore recognises gross billings as revenue.
For other income sources, revenue recognition is assessed in line
with the five steps of IFRS.
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.
34. Financial risk management
The Group uses various financial instruments. These include
loans, cash, issued equity investments and various items, such as
trade receivables and trade payables that arise directly from its
operations. The main purpose of these financial instruments is to
raise finance for the Company's operations.
The existence of these financial instruments exposes the Group
to a number of financial risks, which are described in more detail
below.
The main risks arising from the Group's financial instruments
are market risk, cash flow interest rate risk, credit risk and
liquidity risk. The Directors review and agree policies for
managing each of these risks and they are summarised below.
Market risk
Market risk encompasses three types of risk, being currency
risk, fair value interest rate risk and price risk. In this
instance, price risk has been ignored as it is not considered a
material risk to the business. The Group's policies for managing
fair value interest rate risk are considered along with those for
managing cash flow interest rate risk and are set out in the
subsection entitled "interest rate risk" below.
Currency risk
The Group is only minimally exposed to translation and
transaction foreign exchange risk.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs by closely
managing the cash balance and by investing cash assets safely and
profitably.
The Group policy throughout the period has been to ensure
continuity of funding.
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 review regularly 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.
2020 2019
GBP'000 GBP'000
Financial assets:
Floating interest rate:
Cash 1,996 690
Zero interest rate:
Trade receivables 4,623 6,215
------- -------
6,619 6,905
------- -------
Financial liabilities:
Floating interest rate:
Bank loans/revolving facility 7,939 5,650
Zero interest rate:
Trade payables 2,301 2,604
------- -------
10,240 8,254
------- -------
As at 31 March 2020, the Group's non-derivative financial
liabilities have contractual maturities (including interest
payments where applicable) as summarised below:
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 - - -
--------- ------- ------- ----------
This compares to the maturity of the Group's non-derivative
financial liabilities in the previous reporting period as
follows:
31 March 2019 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 1,005 987 3,954 -
Trade and other payables 9,546 - - -
--------- ------- ------- ----------
Total amount due 10,551 987 3,954 -
--------- ------- ------- ----------
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 GBP64,286 lower, and if the interest rate on these
liabilities had been 1% lower, profit before tax would have
improved by GBP64,286.
Credit risk
The Group applies the IFRS 9 simplified model of recognising
lifetime expected credit losses for all trade receivables as these
items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables
have been assessed on a collective basis as they possess shared
credit risk characteristics. They have been grouped based on the
days past due and also according to the geographical location of
customers.
The expected loss rates are based on the payment profile for
sales over the past 48 months before 31 March 2019 and 1 January
respectively, as well as the corresponding historical credit losses
during that period. The historical rates are adjusted to reflect
current and forward-looking macroeconomic factors affecting the
customer's ability to settle the amount outstanding. The Group has
identified gross domestic product (GDP) and unemployment rates of
the countries in which the customers are domiciled to be the most
relevant factors, and accordingly adjusts historical loss rates for
expected changes in these factors. However, given the short period
exposed to credit risk, the impact of these macroeconomic factors
has not been considered significant within the reporting
period.
Trade receivables are written off (i.e. derecognised) when there
is no reasonable expectation of recovery. Failure to make payments
within 180 days from the invoice date and failure to engage with
the Group on alternative payment arrangement, amongst other things,
are considered indicators of no reasonable expectation of
recovery.
The Directors consider that the Group's trade receivables were
impaired for the year ended 31 March 2020 and a provision for
GBP172,000 (2019: GBP61,000) has been provided accordingly. See
Note 17 for further information.
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:
2020 2019
GBP'000 GBP'000
Financial assets
Loans and receivables
Trade and other receivables 4,565 6,631
Cash and cash equivalents 1,996 690
-------- --------
6,561 7,321
Financial liabilities:
Current:
Financial liabilities measured at amortised
cost
Borrowings (7,939) (5,650)
Lease liabilities (2,193) -
Trade and other payables (8,553) (9,546)
Provisions for liabilities (42) (42)
-------- --------
(18,727) (15,238)
-------- --------
Net financial assets and liabilities (12,166) (7,917)
-------- --------
Plant, property and equipment 2,887 1,015
Goodwill 27,586 33,054
Other intangible assets 2,604 4,364
Prepayments 1,208 1,530
Deferred tax 104 95
Taxation payable 391 (205)
Provisions for deferred tax (422) (656)
34,358 39,197
-------- --------
Total equity 22,192 31,280
-------- --------
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:
2020 2019
GBP'000 GBP'000
Total equity 22,192 31,280
------- -------
35. Financial risk management
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 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)
--------- --------- -------- --------
31 March 2019 Level 1 Level 2 Level 3 Total
Financial liabilities GBP'000 GBP'000 GBP'000 GBP'000
Deferred consideration - - (1,632) (1,632)
--------- --------- -------- --------
Net fair value - - (1,632) (1,632)
--------- --------- -------- --------
There were no transfers between Level 1 and Level 2 in 2020 or
2019.
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 GBP1,769k 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 GBP1,874k and reflect management's estimate of a 100% probability that the contract's target level will be achieved. The discount rate used is 11.5%, based on the Group's estimated incremental borrowing rate for unsecured liabilities at the reporting date, and therefore reflects the Group's credit position. The effects on the fair value of risk and uncertainty in the future cash flows are dealt with by adjusting the estimated cash flows rather than adjusting the discount rate.
The following table provides information about the sensitivity
of the fair value measurement to changes in the most significant
inputs:
Description Significant unobservable 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 2018 1,417
Acquired through business
combination 82
Amount recognised in profit
or loss 133
---------------
Balance at 31 March 2019 1,632
Amount recognised in profit
or loss 137
---------------
Balance at 31 March 2020 1,769
---------------
36. Post Balance Sheet Events
Since 31 March 2020 the following events have occurred that are
related to these financial statements:
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 now owns 100% of the shares in Massive Group,
which has traded as Jaywing Australia since 2017.
The 25% stake was acquired for $4.0m (GBP2.2m) and the total
consideration for the purchase of the 100% interest was $9.6m
(GBP5.4m).
On 8 October 2020, the Company's Performance Share Plan
terminated and there are no outstanding share options.
37. Changes in accounting policy
This note explains the impact of the adoption of IFRS 16,
'Leases', on the Company's financial statements.
As indicated in Principal Accounting Policies above, the Company
has adopted IFRS 16, 'Leases' retrospectively from 1 April 2019,
but has not restated comparatives for the 2019 reporting period, as
permitted under the specific transition provisions in the standard.
The reclassifications and the adjustments arising from the new
leasing rules are therefore recognised in the opening balance sheet
on 1 April 2019. The new accounting policies are disclosed in note
14.
On adoption of IFRS 16, the Company recognised lease liabilities
in relation to leases which had previously been classified as
'operating leases' under the principles of IAS 17, 'Leases'. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee's incremental borrowing
rate as of 1 April 2019. The weighted average lessee's incremental
borrowing rate applied to the lease liabilities for buildings on 1
April 2019 was 4.05% and for printers it was 5.06%.
In applying IFRS 16 for the first time, the group has used the
following practical expedients permitted by the standard:
-- applying a single discount rate to a portfolio of leases with
reasonably similar characteristics;
-- relying on previous assessments on whether leases are onerous
as an alternative to performing an impairment review - there were
no onerous contracts as at 1 April 2019;
-- accounting for operating leases with a remaining lease term
of less than 12 months as at 1 April 2019 as short-term leases;
-- excluding initial direct costs for the measurement of the
right of use asset at the date of initial application; and
-- using hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
The group has also elected not to reassess whether a contract is
or contains a lease at the date of initial application. Instead,
for contracts entered into before the transition date the group
relied on its assessment made applying IAS 17 and Interpretation
4.
Measurement of lease liabilities: 2020
GBP'000
Operating lease commitments disclosed at 31
March 2019 2,995
Discounted using the lessee's incremental borrowing
rate at the date of initial application (192)
-------
Lease liability recognised at 1 April 2019 2,803
-------
Of which are:
Current lease liabilities 697
Non-current lease liabilities 2,106
-------
2,803
-------
The associated right of use assets for property leases were
measured on a retrospective basis as if the new rules had always
been applied. Other right-of use assets were measured at the amount
equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised in the
balance sheet as at 31 March 2019.
The adoption of IFRS 16 resulted in a right of use asset of
GBP2,803k, with a corresponding liability of GBP2,803k, being
recognised as at 1 April 2019 which was depreciated to a value of
GBP2,137k as at 31 March 2020.
The Company has adopted IFRS 16 on a modified retrospective
basis. Upon transition, a lease liability has been recognised based
on future lease payments discounted at an appropriate borrowing
rate. Additionally, a right of use asset has been recognised along
with a related lease liability. Within the income statement, the
operating lease charge (GBP711k) has been replaced by depreciation
(GBP666k) and interest expense (GBP101k). This has resulted in a
decrease in operating expenses and an increase in finance
costs.
1.1
Company Financial Statements
Company Profit and Loss account
2020 2019
Note GBP'000 GBP'000
Turnover - 40
Administrative expenses 2 (24,847) (13,207)
-------- --------
Operating loss 3 (24,847) (13,167)
Income from fixed asset investment 4 2,400 6,546
Other income 4 166 -
Interest payable and similar charges 5 (487) (290)
-------- --------
Loss on ordinary activities before taxation (22,768) (6,911)
Taxation on ordinary activities 6 (96) (57)
-------- --------
Loss and total comprehensive income on
ordinary activities after taxation 18 (22,864) (6,968)
-------- --------
The accompanying Notes to the Parent Company Financial
Statements form an integral part of these Financial Statements.
Company Balance Sheet
2020 2019
Note GBP'000 GBP'000
Fixed assets
Tangible assets 10 1,397 355
Investments 12 32,511 51,460
-------- --------
33,908 51,815
-------- --------
Current assets
Cash at bank 182 -
Debtors due < 1 year 13 1,417 2,326
-------- --------
1,599 2,326
Current liabilities
Creditors: amounts falling due within one
year 14 (19,025) (11,938)
-------- --------
Total assets less current liabilities 16,344 42,203
-------- --------
Non current liabilities
Creditors: amounts falling due after more
than one year 15 (970) (3,850)
-------- --------
Net assets 15,512 38,353
-------- --------
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 18 696 838
Capital Redemption Reserve 18 125 125
Profit and Loss Account 18 (30,364) (7,665)
-------- --------
Equity shareholders' funds 15,512 38,353
-------- --------
The Financial Statements were approved by the Board of Directors
and authorised for issue on 25 November 2020 .
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 2018 34,992 10,088 (25) 736 125 (697) 45,219
Share-based payment
charge - - - 102 - - 102
Transactions with
owners - - - 102 - - 102
--------- -------- -------- -------- ----------- --------- --------
Profit for the year
and total other
comprehensive income - - - - - (6,968) (6,968)
--------- -------- -------- -------- ----------- --------- --------
Total comprehensive
income - - - 102 - (6,968) (6,866)
--------- -------- -------- -------- ----------- --------- --------
At 31 March 2019 34,992 10,088 (25) 838 125 (7,665) 38,353
--------- -------- -------- -------- ----------- --------- --------
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
--------- -------- -------- -------- ----------- --------- --------
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
company, the board has also considered the potential impact of
COVID-19 on the cash flows of the company for a period in excess of
12 months from the date of signing the financial statements. 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. The Company 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.
The second quarter has continued to see a positive trend. Whilst
there remains considerable uncertainty in markets generally, the
Company believes that it is well placed to benefit as economic
activity recovers.
The impact of COVID-19 indicates the existence of a material
uncertainty which may cast significant doubt about the Company's
ability to continue as a going concern. The Company financial
statements do not include the adjustments that would result if the
Company were unable to continue as a going concern. Notwithstanding
this material uncertainty, 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 has adopted IFRS 16 - Leases for the financial year
ended 31 March 2020, and it has chosen to use the modified
retrospective approach to adoption which means there are no
restatements to the prior year figures.
IFRS 16 introduces a single lessee accounting model, whereby the
Company now recognises a lease liability and a right of use asset
at 1 April 2019 for leases previously classified as operating
leases. Within the income statement, operating lease charges, which
previously were included in administrative expenses, have been
replaced by depreciation and interest expenses.
See notes 11 and 22 for more details.
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.
Revenue recognition
The turnover shown in the profit and loss account represents
amounts invoiced in relation to work undertaken during the year.
Revenue in the year was GBPnil. This has been assessed in line with
the five steps set out in IFRS 15:
1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance
obligations
5. Recognise revenue when the performance obligations are
satisfied
Based on the above, the revenue is recognised in accordance with
the stage of completion of contractual obligations to the customer.
The stage of completion is ascertained by assessing the fair value
of the services provided to the balance sheet date as a proportion
of the total fair value of the contract. Losses on contracts are
recognised in the period in which the loss first becomes
foreseeable.
Revenue - other revenue streams
Interest receivable
Interest receivable is reported on an accrual basis using the
effective interest method.
Dividends receivable
Dividends are recognised at the time the right to receive
payment is established.
Operating expenses
Operating expenses are recognised in profit or loss upon
utilisation of the service or as incurred.
Foreign currency translation
Foreign currency transactions are translated into the Company's
functional currency using the exchange rates prevailing at the
dates of the transactions (spot exchange rate).
Foreign exchange gains and losses resulting from the
re-measurement of monetary items denominated in foreign currency at
year-end exchange rates are recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are
measured at historical cost (translated using the exchange rates at
the transaction date), except for non-monetary items measured at
fair value, which are translated using the exchange rates at the
date when fair value was determined. Where a gain or loss on a
non-monetary item is recognised in other comprehensive income, the
foreign exchange component of that gain or loss is also recognised
in other comprehensive income.
Income taxes
Tax expense recognised in profit or loss comprises the sum of
deferred tax and current tax not recognised in other comprehensive
income or directly in equity.
Calculation of current tax is based on tax rates and laws that
have been enacted or substantively enacted by the end of the
reporting period. Deferred income taxes are calculated using the
liability method.
Calculation of deferred tax is based on tax rates and laws that
have been enacted or substantively enacted by the end of the
reporting period, that are expected to apply when the asset is
realised, or the liability is settled.
The measurement of deferred tax reflects the tax consequences
that would follow from the manner in which the entity expects to
recover the related asset or settle the related obligation.
Deferred tax assets are recognised to the extent that it is
probable that the underlying tax loss or deductible temporary
difference will be utilised against future taxable income. This is
assessed based on the Company's forecast of future operating
results, adjusted for significant non-taxable income and expenses,
and specific limits on the use of any unused tax loss or credit.
Deferred tax assets are not discounted.
Deferred tax liabilities are generally recognised in full, with
the exception of the following:
-- on the initial recognition of goodwill on investments in
Subsidiaries, where the Company is able to control the timing of
the reversal of the difference, and it is probable that the
difference will not reverse in the foreseeable future, on the
initial recognition of a transaction that is not a business
combination and at the time of the transaction affects neither
accounting or taxable profit.
Deferred tax liabilities are not discounted.
Post-employment benefits and short-term employee benefits
Short-term employee benefits
Short-term employee benefits, including holiday entitlement, are
current liabilities included in pension and other employee
obligations, measured at the undiscounted amount that the Company
expects to pay as a result of unused entitlement.
Post-employment benefit plans
Contributions to defined contribution pension schemes are
charged to profit or loss in the year to which they relate. Prepaid
contributions are recognised as an asset. Unpaid contributions are
reflected as a liability.
Share-based payments
Where equity-settled share options are awarded by the Parent
Company to employees of this Company, the fair value of the options
at the date of grant is charged to profit or loss over the vesting
period with a corresponding entry in Retained Earnings.
Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options that eventually vest.
Non-vesting conditions and market vesting conditions are
factored into the fair value of the options granted. As long as all
other vesting conditions are satisfied, a charge is made
irrespective of whether the market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure to
achieve a market vesting condition or where a non-vesting condition
is not satisfied.
Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
the statement of comprehensive income over the remaining vesting
period.
Profit from operations
Profit from operations comprises the results of the Company
before interest receivable and similar income, interest payable and
similar charges, corporation tax and deferred tax.
Put/call options
The put/call options in Massive Group PTY and Frank Digital PTY
have been valued by an independent assessor and are recognised with
both a service and non-service element in the accounts. The
non-service element is fully recognised as at the date of
acquisition and the fair value reviewed annually. The service
element is treated as a cash-settled share-based payment with the
share-based payment valued at the point of inception and the cost
being spread over the life of the asset.
Fair value measurement
Management uses valuation techniques to determine the fair value
of financial instruments and non-financial assets. This involves
developing estimates and assumptions consistent with how market
participants would price the instrument. Management bases its
assumptions on observable data as far as possible, but this is not
always available. In that case, management uses the best
information available. Estimated fair values may vary from the
actual prices that would be achieved in an arm's length transaction
at the reporting date.
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
2020 2019
GBP'000 GBP'000
Share-based payment charge (227) 133
Related National Insurance charge (42) (17)
Impairment of carrying value of investment 19,274 7,130
Administrative expenses 5,842 5,961
Total administrative expenses 24,847 13,207
------- -------
100% of turnover arose in the United Kingdom (2019: 100%).
3. Operating loss
2020 2019
Operating loss is stated after charging: GBP'000 GBP'000
Depreciation of owned fixed assets 74 84
Depreciation of right of use assets 169 -
------- -------
243 84
------- -------
4. Income from fixed asset investments
2020 2019
GBP'000 GBP'000
Dividends received from subsidiary companies 2,400 6,546
------- -------
Other income of GBP166k (2019: GBPnil) is from recharges to
Group companies for buildings and printers.
5. Other interest payable and similar charges
2020 2019
GBP'000 GBP'000
Bank interest payable 561 277
Interest on lease liability 51 -
Finance charge on acquisition 13 13
------- -------
Total 625 290
------- -------
6. Tax on ordinary activities
The tax charge is based on the profit for the
year and represents: 2020 2019
GBP'000 GBP'000
UK corporation tax at 19% (2019: 19%) 931 1,037
Adjustment in respect of prior period (1,039) (1,096)
-------- -------
Total current tax (108) (59)
Deferred tax:
Origination and reversal of timing differences 12 2
(96) (57)
======== =======
The tax credit can be explained as follows: 2020 2019
GBP'000 GBP'000
Loss before tax (22,768) (6,911)
-------- -------
Tax using the UK corporation tax rate of 19%
(2019: 19%) (4,325) (1,313)
Effect of:
Non-taxable income (422) (1,195)
Non-deductible expenses / credit 3,612 1,355
Prior year adjustment 1,039 1,096
-------- -------
Current year credit (96) (57)
-------- -------
7. Auditor's remuneration
Details of remuneration paid to the auditor by the Company are
shown in Note 8 to the Consolidated Financial Statements.
8. Directors and employees
2020 2019
Average number of staff employed by the Company 33 34
------- -------
2020 2019
Aggregate emoluments (including those of Directors): GBP'000 GBP'000
Wages and salaries 2,800 3,156
Social security costs 279 355
Pension contribution 182 196
Share-based payment charge (269) 116
Total emoluments 2,992 3,823
------- -------
Further information in respect of Directors is given in the
Directors' Remuneration table.
Remuneration in respect of Directors was as follows:
2020 2019
GBP'000 GBP'000
Emoluments receivable 733 842
Fees paid to third parties for Directors' services 30 30
Company pension contributions to money purchase
pension schemes 87 97
------- -------
850 969
------- -------
The highest paid Director received remuneration of GBP257,000
(2019 GBP264,000).
9. Dividends
The Directors do not recommend the payment of a dividend for the
current year (2019: GBPNil).
10. Tangible fixed assets
Fixtures
Leasehold &
Buildings Improvements fittings Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost at 1 April 2019 - 389 250 639
Additions - - 8 8
Recognition of right of
use asset 1,147 - 130 1,277
--------- ------------- --------- -------
Cost at 31 March 2020 1,147 389 388 1,924
--------- ------------- --------- -------
Depreciation at 1 April
2019 - 80 204 284
Charge for the year - 40 34 74
Charge on right of use assets 143 - 26 169
--------- ------------- --------- -------
Depreciation at 31 March
2020 143 120 264 527
--------- ------------- --------- -------
Net book value at 31 March
2020 1,004 269 124 1,397
--------- ------------- --------- -------
Net book value at 31 March
2019 - 309 46 355
--------- ------------- --------- -------
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 2019
GBP'000 GBP'000
Right of use assets
Buildings 1,005 -
Plant and machinery 104 -
------- -------
1,109 -
======= =======
Lease liabilities
Current 162 -
Non-current 970 -
------- -------
1,132 -
======= =======
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to
leases:
2020 2019
GBP'000 GBP'000
Depreciation charge of right of use assets
Buildings 143 -
Plant and machinery 26 -
------- -------
169 -
------- -------
Interest expense (included in finance cost) 51 -
======= =======
The Company leases an office in Sheffield and printers. The
Company 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.
Until the 2020 financial year, leases of property, plant and
equipment were classified as operating leases, see note 22 for
details. From 1 April 2019, leases are recognised as a right of use
asset and a corresponding liability at the date at which the leased
asset is available for use by the group.
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.
12. Investments
Subsidiaries
GBP'000
Cost at 1 April 2019 58,590
Payment of deferred consideration for Frank
Digital PTY Ltd 325
Capital contribution for share option scheme 24
Recharge of capital contribution from group
companies (24)
Cost at 31 March 2020 58,915
------------
Impairment at 1 April 2019 7,130
Impairment in year 19,274
Impairment at 31 March 2020 26,404
------------
Net book value at 31 March 2019 51,460
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 15 in the
Group's Financial Statements. This review has concluded that the
carrying value of the Company's investments is impaired by
GBP19,274k (2019: GBP7,130k).
At 31 March 2020 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% Agency services
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% Direct marketing
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 75% 75% Search Engine Optimisation
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
The Comms Department Limited is exempt from the requirement of
the Companies Act relating to the audit of individual Financial
Statements by virtue of s479A of the Companies Act 2006.
All the companies listed above have been consolidated.
All the companies listed above are incorporated in England and
Wales with the following exceptions:
Company Country of Incorporation
Epiphany Solutions PTY Limited Australia
Frank Digital PTY Limited Australia
Massive Group PTY Limited Australia
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
2020 2019
GBP'000 GBP'000
Amounts due from Group undertakings 58 609
Prepayments and accrued income 173 209
Other taxation and social security 243 469
Deferred tax 12 -
Corporation tax 931 1,039
1,417 2,326
------- -------
14. Creditors: amounts falling due within one year
2020 2019
GBP'000 GBP'000
Bank loans and overdrafts (Note 16) 7,939 6,618
Trade creditors 343 251
Amounts owed to Group undertakings 8,170 2,622
Other taxation and social security 74 90
Other creditors 47 53
Accruals and deferred income 521 672
Lease liability 162 -
Deferred consideration payable on acquisition
of Subsidiary undertakings 1,769 1,632
------- -------
19,025 11,938
------- -------
Deferred consideration includes put/call options and other
deferred consideration which has increased in the year due to fair
value movements of GBP137k.
15. Creditors: amounts falling due in more than one year
2020 2019
GBP'000 GBP'000
Lease liability 970 -
Bank loan - 3,850
970 3,850
------- -------
16. Borrowings
2020 2019
GBP'000 GBP'000
Summary:
Bank overdraft - 4,818
Bank loans 7,939 5,650
------- -------
7,939 10,468
------- -------
Borrowings are repayable as follows: 2020 2019
GBP'000 GBP'000
Within one year:
Bank overdraft - 4,818
Bank loans 7,939 1,800
------- -------
Total due within one year 7,939 6,618
------- -------
Bank loans:
In more than one year but less than two years: - 3,850
------- -------
17. Share Capital
Allotted, issued and fully paid:
45p deferred 5p ordinary
shares shares
Number Number GBP'000
At 31 March 2019 67,378,520 93,432,217 34,992
At 31 March 2020 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
2020 2019
GBP'000 GBP'000
At 31 March 2020 and 31 March 2019 25 25
------- -------
20. Share-based payments
Share-based payment charge is as follows:
2020 2019
GBP'000 GBP'000
Share-based payment (227) 133
Related National Insurance costs (42) (17)
------- -------
(269) 116
------- -------
Details of the share options issued and the basis of calculation
of the share-based payments, which all relate to share options
granted, are given in Note 11 to the Consolidated Financial
Statements.
21. Provision for liabilities
Deferred
tax
(Note 6)
GBP'000
At 1 April 2019 -
Amounts of deferred tax recognised
in profit or loss 12
---------
At 31 March 2020 12
---------
22. Commitments under operating leases
At 31 March 2020 the company had aggregate annual commitments
under non-cancellable operating leases as set out below:
Land and buildings
2020 2019
GBP'000 GBP'000
Operating leases which expire:
Within one year - 168
Within two to five years - 673
After five years - 463
--------- ---------
- 1,304
--------- ---------
23. Contingent liabilities
There is a cross guarantee between members of the Jaywing plc
group of companies on all bank overdrafts and borrowings with the
group's lenders. At 31 March 2020 the amount thus guaranteed by the
company was GBPnil (2019: GBPnil).
24. 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 32
to the Consolidated Financial Statements.
25. Financial risk management objectives and policies
Details of Group policies are set out in Note 34 to the
Consolidated Financial Statements.
26. 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 GBP182,000 (2019: GBP196,000).
27. 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 options are granted with a fixed exercise price and have a
vesting period of up to two years. The vesting conditions relate to
the performance of the overall Jaywing plc Group and continued
employment during the vesting period. There are no other market
conditions attached to the share options.
The number of options outstanding at the end of the year in
respect of Company employees were 1,489,025 (2019: 3,436,352).
No share options were exercised during the year. The exercise
prices for share options outstanding was 5p (2019: 5p). The
remaining contractual life of the share options was two years
(2019: two years).
Post year end the Company closed its share option scheme, as all
remaining options either lapsed or were cancelled.
28. Changes in accounting policies
This note explains the impact of the adoption of IFRS 16,
'Leases', on the Company's financial statements.
As indicated in note 1 above, the Company has adopted IFRS 16,
'Leases' retrospectively from 1 April 2019, but has not restated
comparatives for the 2019 reporting period, as permitted under the
specific transition provisions in the standard. The
reclassifications and the adjustments arising from the new leasing
rules are therefore recognised in the opening balance sheet on 1
April 2019. The new accounting policies are disclosed in note
11.
On adoption of IFRS 16, the Company recognised lease liabilities
in relation to leases which had previously been classified as
'operating leases' under the principles of IAS 17, 'Leases'. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee's incremental borrowing
rate as of 1 April 2019. The weighted average lessee's incremental
borrowing rate applied to the lease liabilities for buildings on 1
April 2019 was 4.05% and for printers it was 5.06%.
In applying IFRS 16 for the first time, the group has used the
following practical expedients permitted by the standard:
-- applying a single discount rate to a portfolio of leases with
reasonably similar characteristics;
-- relying on previous assessments on whether leases are onerous
as an alternative to performing an impairment review - there were
no onerous contracts as at 1 April 2019;
-- accounting for operating leases with a remaining lease term
of less than 12 months as at 1 April 2019 as short-term leases;
-- excluding initial direct costs for the measurement of the
right of use asset at the date of initial application; and
-- using hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
The group has also elected not to reassess whether a contract
is, or contains a lease at the date of initial application.
Instead, for contracts entered into before the transition date the
group relied on its assessment made applying IAS 17 and
Interpretation 4.
The associated right of use assets for property leases were
measured on a retrospective basis as if the new rules had always
been applied. Other right-of use assets were measured at the amount
equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised in the
balance sheet as at 31 March 2019.
The adoption of IFRS 16 resulted in a right of use asset of
GBP1,278k, with a corresponding liability of GBP1,278k, being
recognised as at 1 April 2019 which was depreciated to a value of
GBP1,109k as at 31 March 2020.
The Company has adopted IFRS 16 on a modified retrospective
basis. Upon transition, a lease liability has been recognised based
on future lease payments discounted at an appropriate borrowing
rate. Additionally, a right of use asset has been recognised along
with a related lease liability. Within the income statement, the
operating lease charge (GBP197k) has been replaced by depreciation
(GBP169k) and interest expense (GBP51k). This has resulted in a
decrease in operating expenses and an increase in finance
costs.
Shareholder Information
General Meeting
A General Meeting will be held on Wednesday 23(rd) December 2020
at Jaywing PLC, Albert Works, Sidney Street, Sheffield, S1 4RG at
11am.
Dividend
There is no dividend payable.
Multiple accounts on the shareholder register
If you have received two or more copies of or notifications
about this document, this means that there is more than one account
in your name on the Shareholders Register. This may be caused by
your name or address appearing on each account in a slightly
different way. For security reasons, the Registrars will not
amalgamate the account without your written consent, so if you
would like any multiple accounts to be combined into one account,
please write to Link Asset Services at the address given below.
Documents
The following documents, which are available for inspection
during normal business hours at the registered office of the
Company on any weekday (Saturdays, Sundays and public holidays
excluded), will also be available for inspection at the place of
the 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 2020.
Issued Share Capital
As at 16 November 2020 (being the last practicable date before
the publication of this document), the Company's issued Share
Capital comprised 93,432,217 ordinary shares of 5p each, of which
99,622 are held in Treasury. Therefore, as at 16 November 2020 the
total voting rights in the Company were 93,432,217. On a vote by
show of hands, every member who is present in person or by proxy
has one vote. On a poll, every member who is present in person or
by proxy has one vote for every ordinary share of which he or she
is a holder.
Share dealing services
To purchase or sell shares in Jaywing plc visit
https://www.linksharedeal.com or call 0371 664 0445. Calls are
charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. Lines are open 08:00 - 16:30, Monday to Friday,
excluding public holidays in England and Wales. This is not a
recommendation to buy and sell shares and this service may not be
suitable for all shareholders. The price of shares can go down as
well as up and you are not guaranteed to get back the amount you
originally invested. Terms, conditions and risks apply. Link Asset
Services is a trading name of Link Market Services Trustees
Limited, which is authorised and regulated by the Financial Conduct
Authority. This service is only available to private shareholders
resident in the European Economic Area, the Channel Islands or the
Isle of Man.
Shareholder enquiries
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
5(th) Floor, Free Trade Exchange
37 Peter Street
Manchester
M2 5GB
Company Secretary
Caroline Ackroyd
Albert Works
71 Sydney Street
Sheffield
S1 $RG
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END
FR FLFVALTLEFII
(END) Dow Jones Newswires
November 26, 2020 02:00 ET (07:00 GMT)
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