Digital marketing firm Jaywing, which counts Asda and Domino’s Pizza among its customers, said slow UK trading conditions have led to a requirement for additional funding.
The Sheffield-based firm said it is in constructive dialogue with its debt and equity holders over financing requirements as it reported soft and unpredictable demand in delayed annual results.
The firm reported a 14 per cent fall in revenue to £35.6m in the year to March 31 and a £935,000 loss from continuing operations.
Jaywing said adjusted EBITDA rose 15 per cent in challenging market conditions and said the sale of its non-core, lower margin, contact centre business HSM Limited has been used to part fund restructuring costs.
Martin Boddy, chairman of Jaywing, said: “During the year, overall demand in the UK was relatively soft and at times unpredictable.
“Despite this, margins improved significantly, with adjusted EBITDA increasing by 15 per cent despite an overall 3 per cent reduction in gross profit.”
The firm said nearly 70 per cent of its top 50 clients are now buying more than one service and 50 per cent of revenues are visible beyond six months.
Mr Boddy said Jaywing is well positioned to take advantage of any hardening in marketing spend as and when it comes.
The firm said that trading in the first six months of 2019 was particularly challenging and, whilst it improved during spring, the ongoing uncertain economic and political outlook is likely to hit client activity.
Mr Boddy said a leaner and more focused Jaywing has the right business model for the future.
“In the marketing industry, clients are forcing a major redesign of the traditional network agency model,” he said.
“This creates space for a credible challenger such as Jaywing with the right specialisms and technology allied to a collaborative operating model.
“Whilst the very short term outlook in the UK is going to be impacted by economic uncertainty and therefore difficult to predict, the mid-term outlook is far more appealing, with most market commentators and industry surveys predicting healthy growth rates in online marketing in particular.”
Chief executive Rob Shaw said there has been growing dissatisfaction with the traditional network agency model.
“Instead, marketers are favouring new agency models, including greater use of specialists, greater collaboration and the use of in-house teams,” said Mr Shaw.