TIDMAFN
RNS Number : 3172D
ADVFN PLC
23 October 2015
ADVFN PLC
Audited Results for the Year Ended 30 June 2015
ADVFN, the global stocks and shares website, announces its
audited results for the year ended 30 June 2015
The annual report and accounts will shortly be sent to
shareholders and will be available on the Company's website,
http://www.advfn.com.
For further information, please contact:
Clem Chambers,
ADVFN PLC CEO
0207 0700 909
Salmaan Khawaja/ Jen Clarke/ Jamie Barklem
Grant Thornton UK LLP (Nominated Adviser)
0207 383 5100
CHIEF EXECUTIVE'S STATEMENT
2015 was a solid year with sales broadly in line with last year
at GBP9,297,000 (2014: GBP9,702,000). Losses were GBP1,560,000
(2014: GBP454,000) an outcome significantly exacerbated by our
difficult and costly defence of the illegal action of a particular
shadowy group of share holders at the beginning of the year which
was seeking to take control of the ADVFN board (the "Requisitioning
Shareholders").
This was a major distraction and the situation was resolved by
the UK Regulator this summer, very much to our relief.
Meanwhile we worked with our advisers on a potential acquisition
of London South East Limited, a UK financial website and provider
of stock data, with an eye to combine the business and talents with
ADVFN. Since the end of the financial year, this deal has fallen
into abeyance. Market conditions and changes in the VCT rules have
meant the market currently has little appetite to finance this kind
of deal but both parties have left the door open for working
together in the future.
We have been focusing very keenly on reducing costs.
Historically we have focused on growth opportunities and this has
been the strategy for well over a decade. However we have decided
to deviate from that path and instead shift our focus to cash flows
and profitability. The initial phase of this was underway in the
lead up to the year end and has continued beyond and by the end of
the calendar year we will have refocused our efforts into
optimising our businesses in the UK, US, Brazil. We will still
enjoy significant traffic and revenues from the Rest of the World
(ROW) but our focus in the medium term will not be investing
material resources beyond those core territories.
The bear market that kicked off around spring time in the
markets has created flashes of growth, especially in Brazil and it
is likely that if the market continues to become more volatile, we
will benefit from an increased level of interest this creates.
Whilst seemingly counterintuitive, very bad markets are good for us
and like our advertising clients, quiet markets are poor for us,
while fast markets are excellent. It seems likely that volatility
will increase.
Clement Chambers
CEO
22 October 2015
STRATEGIC REPORT
Financial Overview
These consolidated accounts have been prepared under
International Financial Reporting Standards (IFRS) as adopted by
the European Union.
There has been an environment of rising costs in data license
fees and we have had to make a number of important changes to
product make-up and pricing to accommodate this.
We have been extremely focused on keeping our cost base under
control and have taken a series of further steps to take our model
towards operating with significant cash flows and
profitability.
Business Review
Last year's strategy to begin a US market outreach on the OTC QX
market tier was scuppered by the proposed EGM by the Requisitioning
Shareholders at the beginning of the year.. This intervention has
contributed to the volatility of the Company's share price on a
rollercoaster ride and left a fog of uncertainty that remains today
over what might happen next. This has derailed our US plans because
of the effort required to defend the Company in that period.
Whilst this veil of uncertainty remains, happily we have been
able to get back to the business' main focus thanks to the
intervention of the UK regulators in this matter.
Consequently, we have lost some momentum and this is reflected
in the figures, but thankfully it has not disrupted our core
business dynamics.
We have used this emergency situation as an opportunity to make
some key decisions and it is fair to say that we have now deviated
from our long-term strategy of ploughing everything back into
trying to grow ADVFN globally. To some this may be a relief, but we
still feel there are great opportunities outside our current focus
but we have decided, that at least in the medium term, to grow
profitability as a priority.
Operating Costs
We have been working hard on reducing these during the year and
they are set on a downward trajectory.
Research and Development
R&D is a kind of life blood in technology, if you do not
continue to develop you enter a spiral of decay that leads to
obsolescence. We have continued to develop, scale and reinforce our
platform. ADVFN sites run on a robust, flexible, low cost platform
which we will continue to push forward to keep up with the
financial data markets every increasing complexity.
Environmental policy
The Company as a whole continues to look for ways to develop its
environmental policy. It remains our objective to improve our
performance in this area.
Future outlook for the business.
ADVFN has a history of growth. This tends to go in steps with
intervening periods of plateau stability. We are on such a plateau
again. While during these periods it can seem like nothing much is
happening, there are always developments both good and bad
occurring almost weekly. ADVFN grows when the markets go into
volatility. No one can predict the timing of such events so it is
hard to predict when the current plateau environment will change.
It will however, that much is certain.
Summary of key performance indicators
2015 2015 2014 2014
Actual Target Actual Target
------------------------ -------- -------------- -------- --------------
Turnover GBP9.3M GBP9 - GBP10M GBP9.7M GBP9 - GBP10M
-------- -------------- --------
Average head count 53 53 43 44
------------------------ -------- -------------- -------- --------------
ADVFN registered users 3.2M 3.1M 3.0M 2.9M
------------------------ -------- -------------- -------- --------------
Principle risks and uncertainties
Economic downturn
There are signs of global economic recovery and these have shown
up as bursts of traffic on ADVFN, for example in Brazil. However
there can be no certainty in a return to economic normality in the
near future but as previously stated the Company has bridged both
the dotcom crash and the credit crunch, so we feel that we have
shown we are robust enough to withstand the financial conditions of
economic emergencies.
High proportion of fixed overheads and variable revenues
A large proportion of the company's overheads are fixed. There
is the risk that any significant changes in revenue may lead to the
inability to cover such costs. Management closely monitor fixed
overheads against budget on a monthly basis and cost saving
exercises are implemented on a constant review basis. We have had a
strong period of cost optimisations that are updated on a regular
basis.
Product obsolescence
The technology that we use is always in development and
constantly changing. All our products are subject to technological
change and advance and resultant obsolescence.
We have no choice but to keep innovating to keep up with growing
technical challenges that are changing all the time.
The Directors are committed to the Research and Development
strategy in place, and are confident that the company is able to
react effectively to the developments within the market.
Fluctuations in currency exchange rates
A growing proportion of our turnover relates to overseas
operations. As a company, we are therefore exposed to foreign
currency fluctuations. The Company manages its foreign exchange
exposure on a net basis, and if required uses forward foreign
exchange contracts and other derivatives/financial instruments to
reduce the exposure. Currently hedging is not employed and no
forward contracts are in place. If currency volatility was extreme
and hedging activity did not mitigate the exposure, then the
results and the financial condition of the company might be
adversely impacted by foreign currency fluctuations.
People
I would like to thank everyone at ADVFN who tirelessly provide a
global service for private investors that never sleeps.
ON BEHALF OF THE BOARD
Clement Chambers
CEO
22 October 2015
GROUP
Consolidated income statement
12 months 12 months
to to
30 June 30 June
2015 2014
Note GBP'000 GBP'000
Revenue 9,297 9,702
Cost of sales (1,628) (1,165)
---------- ----------
Gross profit 7,669 8,537
Share based payment (189) (54)
Amortisation of intangible assets (630) (914)
Other administrative expenses (8,755) (8,232)
---------- ----------
Total administrative expenses (9,574) (9,200)
Operating loss (1,905) (663)
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2015 12:30 ET (16:30 GMT)
Finance income 114 108
Loss before tax (1,791) (555)
Taxation 231 101
---------- ----------
Loss for the period attributable to shareholders
of the parent 2 (1,560) (454)
Loss per share - basic and diluted based
on consolidated shares 2 (6.19)p (1.80)p
Consolidated statement of comprehensive
income
12 months 12 months
to to
30 June 30 June
2015 2014
GBP'000 GBP'000
Loss for the period (1,560) (454)
Other comprehensive income:
Items that will be reclassified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations 185 (190)
Deferred tax on translation of foreign
held assets (21) 29
---------- ----------
Total other comprehensive income 164 (161)
Total comprehensive income for the year
attributable to shareholders of the parent (1,396) (615)
========== ==========
GROUP
Consolidated balance sheet
30 June 30 June
2015 2014
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 99 71
Goodwill 784 724
Intangible assets 1,216 1,331
Trade and other receivables 103 295
Investments 6 -
-------- ---------
2,208 2,421
Current assets
Trade and other receivables 1,095 1,122
Current tax recoverable 181 60
Cash and cash equivalents 986 1,675
-------- ---------
2,262 2,857
-------- ---------
Total assets 4,470 5,278
Equity and liabilities
Equity
Issued capital 50 6,305
Share premium - 8,102
Merger reserve - 221
Share based payment reserve 189 617
Foreign exchange reserve 281 117
Retained earnings 1,118 (12,517)
-------- ---------
1,638 2,845
Non-current liabilities
Deferred tax 97 131
97 131
Current liabilities
Trade and other payables 2,731 2,268
Current tax 4 34
2,735 2,302
Total liabilities 2,832 2,433
-------- ---------
Total equity and liabilities 4,470 5,278
======== =========
GROUP
Consolidated statement of changes in equity
Share Share Merger Share Foreign Retained Total
capital premium reserve based exchange earnings equity
payment reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2013 6,291 8,062 221 563 278 (12,063) 3,352
Issue of shares 14 40 - - - - 54
Equity settled share
options - - - 54 - - 54
--------- --------- --------- --------- ---------- ---------- --------
Transactions with owners 14 40 - 54 - - 108
Loss for the period
after tax - - - - - (454) (454)
Other comprehensive
income
Exchange differences
on translation of foreign
operations - - - - (190) - (190)
Deferred tax on translation
of foreign held assets - - - - 29 - 29
--------- --------- --------- --------- ---------- ---------- --------
Total comprehensive
income for the year - - - - (161) (454) (615)
At 30 June 2014 6,305 8,102 221 617 117 (12,517) 2,845
Equity settled share
options - - - 189 - - 189
--------- --------- --------- --------- ---------- ---------- --------
Transactions with owners - - - 189 - - 189
Loss for the period
after tax - - - - - (1,560) (1,560)
Other comprehensive
income
Exchange differences
on translation of foreign
operations - - - - 185 - 185
Deferred tax on translation
of foreign held assets - - - (21) - (21)
Total comprehensive
income - - - - 164 - 164
Share consolidation (6,255) (8,102) (221) (617) - 15,195 -
At 30 June 2015 50 - - 189 281 1,118 1,638
========= ========= ========= ========= ========== ========== ========
GROUP
Consolidated cash flow statement
12 months 12 months
to to
30 June 30 June
2015 2014
GBP'000 GBP'000
Cash flows from operating activities
Loss for the period before tax (1,791) (555)
Net finance income in the income statement
(unwinding receivable) (114) (108)
Depreciation of property, plant & equipment 61 47
Amortisation 647 914
Adjustment to fair value of embedded derivative 200 250
Share based payments 189 54
Decrease/(Increase) in trade and other
receivables 133 (149)
Increase in trade and other payables 463 314
Net cash (used by)/generated by continuing
operations (212) 767
Income tax receivable/(payable) 46 (3)
---------- ----------
Net cash generated by operating activities (166) 764
Cash flows from investing activities
Payments for property plant and equipment (89) (57)
Purchase of intangibles (472) (495)
Purchase of investments (6) -
Net cash used by investing activities (567) (552)
Net (decrease) /increase in cash and cash
equivalents (733) 212
Exchange differences 44 2
---------- ----------
Total (decrease) /increase in cash and
cash equivalents (689) 214
Cash and cash equivalents at the start
of the period 1,675 1,461
---------- ----------
Cash and cash equivalents at the end of
the period 986 1,675
========== ==========
1. Segmental analysis
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