Sheffield-headquartered Jaywing Plc is exploring a possible sale.
The marketing and data science business has taken the decision to appease its lenders DSC Investment Holdings and Lombard Odier as it seeks to recover profitability.
Jaywing has increased its loan facility with them by more than £500k, taking it to almost £10 million, while net debt remains just under £12m.
“The lenders remain extremely supportive of the business, its improving operating performance and strong prospect list, but have requested that as the company’s expected recovery materialises throughout 2024, it should seek to refinance the loan facility, which was originally provided on a short-term interim basis in August 2019, with a more appropriate longer term capital base,” Jaywing stated.
“In order to continue to build on this platform and reflecting the lenders’ desire to see the business recapitalised, the company will explore all strategic options, including a possible sale of the company as it continues to recover its profitability to ensure that its client service can be delivered and that the ongoing support of the loan facility can be repaid.”
The company – which appointed Dr Catherine Kelly as MD at the start of the year – said it is not in receipt of any approach, nor in discussions with any potential suitors.
Jaywing said strong trading in Australia and its risk consulting business has continued to offset the “much-publicised weakness in the UK agency market”.
Despite undertaking cost-cutting measures, it claims to have built a strong pipeline of opportunities and recently won significant new contracts with Subaru Europe, Crocs (Asia Pacific) and Homes England.
Under the revised loan agreement, Lombard Odier has requested that Henry Turcan and Rob Giles be appointed to the company’s board, while DSC has asked for David Beck be appointed as a director.
Philip Hanson will resign as a director with immediate effect but will continue to support the company in an advisory capacity.
Now frozen due to an ‘offer period’, Jaywing’s share price stands at £3.46, giving it a market cap of £3.23m.
It stood at £5 per share a year ago and around £19 five years ago.