JAYWING

(JWNG:AIM) 24.5p

Loss to date: 29% 

Original entry point: Buy at 34.5p, 9 February 2017

A profit warning has put our trade on marketing services group Jaywing (JWNG:AIM) in the red. The Sheffield-based business says clients with consumer-facing operations have cut their marketing spend as a result of more difficult trading conditions.

One third of Jaywing’s profit is normally generated in the fourth quarter of the year, so there is a lot riding on the current period in terms of winning back the market’s favour.

We’re naturally disappointed by the company’s news and believe investors should stay patient with the business. We’re confident this will be a short-term setback and that it will be business as usual at some point next year.

Jaywing is a data specialist and helps companies to understand what people are saying about
them online as well as monitoring competitor activity. These services will continue to be in demand longer term, hence we remain positive on the stock.

And don’t forget that it also helps lenders comply with accounting standards in terms of how much capital they should hold – so this isn’t a pure-play marketing business.

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