Shares in Sheffield and Leeds-based agency Jaywing dropped 40% in early trading as the data science specialist reported weak performance in its UK consulting division.
One of the North’s top integrated agencies, Jaywing is now in discussions with shareholder lenders to secure additional financial support to complete its restructuring.
In an update today, the business added that operations in Australia continues their year-on-year revenue growth despite an underwhelming summer for the UK division.
This underperformance during the summer has placed significant strain on the company’s working capital.
Jaywing is now in discussions with its shareholder lenders to secure additional financial support to complete its restructuring.
A spokesman said: “Our agency business has won a number of key new accounts but as has been widely reported across the industry, clients are delaying or reducing spend in many cases and this has been particularly noticeable in the timing of new clients delivering budgeted revenue.
“This delay to client spend has also been felt in our consulting division over the summer where trading in H1 has been challenging.
“Encouragingly the prospects for H2 are much better with some new client mandates won in September and a strong pipeline of opportunities with both new and existing clients.
“In the short-term, consulting was forecast to be a key contributor to cash generation and its weak summer trading has therefore placed further strain on the company’s working capital.”
Following the shares dropping to a low of 1.32 in early morning trading, the firm’s stock had recovered to around 1.72 by mid-morning, cutting early losses roughly in half.
