TIDMAFN
RNS Number : 2286N
ADVFN PLC
21 October 2016
ADVFN PLC
Audited Results for the Year Ended 30 June 2016
ADVFN, the global stocks and shares website, announces its
audited results for the year ended 30 June 2016
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/ Jamie Barklem
Grant Thornton UK LLP (Nominated Adviser)
0207 383 5100
CHIEF EXECUTIVE'S STATEMENT
2016 was a transformational year for ADVFN with a change in the
long term strategy of the company from international growth to
consolidation of the existing business.
Having had our plans derailed last year by the attempt to take
control of the ADVFN board, we have made the decision to enter a
period of retrenchment.
Cash burn and losses are almost unavoidable with the sort of
investment programs we have undertaken in the past. Currently the
UK stock market has no stomach to support this kind of strategy so
we have changed course to avoid needing to raise further funding
and to instead produce profits and cash flow.
Curtailing investment drops quickly through to the bottom line
but also feeds through to reductions in sales. The net result is
equilibrium at a lower level of activity, which we hope will
provide a solid basis for future growth. This is what we are
working towards and, so far, we have made good progress.
The operating losses dropped from GBP1,905,000 to GBP650,000 an
improvement of 65.8%. Sales are down 10.7% from GBP9,297,000 in
2015 to GBP8,303,000. However, costs of sales and expenses were
down 20.1% per cent from GBP11,202,000 in 2015 to GBP8,953,000.
The after tax loss for the year was GBP478,000 down from
GBP1,560,000 in the same period last year represents an improvement
of 69.4%.
As announced on 24 March 2016, the loss after tax for the 6
months to 31 December 2015 was GBP442,000, so it can be seen that
the company made a significantly reduced loss of GBP36,000 in the
final six months in the financial year. This is an improvement of
GBP406,000 on the previous half.
The market for our services is fast changing, with mobile
becoming the dominant platform for communication and information.
We have positioned ourselves for this development with our mobile
app which has enabled us to buffer these changes as our traffic
transitions to mobile.
However the mobile platforms are a weaker environment for
monetisation which means, from a business perspective, we have to
progress just to remain stationary.
This shift of usage from the desktop to mobile adds uncertainty
but change is always an opportunity. We are well used to adapting
to changing circumstances. In line with this we are adding new
products to ADVFN which provide new advertising opportunities, new
subscription products and new investor relations services.
We believe these offerings will help keep ADVFN relevant to its
users as the online landscape continues to shift.
Clement Chambers
CEO
21 October 2016
STRATEGIC REPORT
Financial Overview
These consolidated and company accounts have been prepared under
International Financial Reporting Standards (IFRS) as adopted by
the European Union.
There has been a continued environment of rising costs in data
licenses and we continue to prune content where its costs outweigh
its benefits.
We are comfortable with our new cost base and believe it has the
capacity for business growth.
Business Review
ADVFN has restructured. We have cut costs, repriced product,
closed international offices and created new offerings. The bulk of
this process completed early this year. It would seem that our
decision to do so was the correct one, with a general rise of
fragility on many fronts. AIM, on which we are quoted, has been
through a poor period with many companies delisting. Important
foreign markets like Brazil and the US suffered from a deep malaise
for most of the year. Even the dreaded Brexit was a drag on our
business up until the aftermath of the vote.
These situations remain unresolved but we have in the meantime
put our business onto a different footing. We made a significantly
reduced loss of GBP36,000 in the final six months in the financial
year. This signals the end of a restructuring process that we
undertook in this financial year and places us with a focus on our
key US and UK territories. Business is stable and we are working on
a series of initiatives to underpin that and with a little good
fortune provide growth.
Operating Costs
We have significantly cut operating costs. We have slimmed down
our offerings, international operations, marketing and cut
headcount.
Closure of ADVFN Japan LLP and disposal of Investor Events
Ltd
During the year the office in Japan was closed, however the
on-line presence in Japan continues operating as normal with UK
hosted websites.
On 19(th) May 2016 an agreement was reached to dispose of the
business Investor Events Limited and was completed 30 September
2016. The proceeds of the disposal amounted to GBP40,000 and
exceeded the book value of other related net assets and accordingly
no impairment losses have been recognised.
Both of these strategic changes have been designed to bring the
Group's focus back to the central, core offering. It also allows us
the financial flexibility to react to the changing technology in
our market place.
Research and Development
We are highly focused on new developments including improvements
to our website and researching and developing other methods of
accessing our offering. The web and mobile environment is going
through a seismic shift on many levels and we are struggling to
stay ahead of changes that threaten to make us obsolete. We have a
road map for the shifting trends in platform, offering, exchange
landscape and advertising infrastructure. We have managed to adapt
over the last 16 years so we remain in good shape to cope with what
is a very fast changing environment.
Environmental policy
The Group 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 had a successful period of consolidation as you will
note from the transformation in our results. We have turned this
necessity into an opportunity to refocus our business away from
international growth onto consolidation and redevelopment of the
business.
Early outcomes from new product initiatives are promising and
our goal is to return to growth in the next twelve to eighteen
months whilst controlling costs. The whole market place we are
operating in is changing dramatically. However we are confident
that we can adapt to these changes by using our market knowledge,
years of experience and strong technical platform to keep abreast
of these developments.
Summary of key performance indicators
The Directors monitor the Key Performance Indicators on an
ongoing basis. The chart below shows the level of performance
achieved in the financial year. The individual items are as
follows:
Turnover - is of vital importance as it gives the sales
department a goal and measures the financial success of the Group's
service.
Head count - is a very significant part of the costs of the
company and is fixed as an overhead. It provides a good indicator
when taken against the revenue figure for the efficiency of the
business. Talented people are a vital part of the business.
Registered users - give us an accurate indication of our
audience pool and the potential available for marketing our
service.
2016 2016 2015 2015
Actual Target Actual Target
-------------------- -------- -------- -------- --------
GBP9 -
Turnover GBP8.3M GBP8.0M GBP9.3M GBP10M
-------- -------- --------
Average head count 37 37 53 53
-------------------- -------- -------- -------- --------
ADVFN registered
users 3.5M 3.3M 3.2M 3.1M
-------------------- -------- -------- -------- --------
Principal risks and uncertainties
Economic downturn
There are signs of global economic recovery and these have shown
up as bursts of traffic on ADVFN.
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 the credit crunch and now Brexit,
so we feel that we have shown we are robust enough to withstand the
financial conditions of economic emergencies.
High proportion of fixed overheads coupled with 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.
Following the volatility post Brexit, management will continue
to monitor the impact of currency fluctuation. The exchange rate of
the US Dollar has been a recent focus.
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
21 October 2016
Consolidated income statement
30 June 30 June
2016 2015
Notes GBP'000 GBP'000
Revenue 1 8,303 9,297
Cost of sales (1,077) (1,628)
-------- --------
Gross profit 7,226 7,669
Share based payment (275) (189)
Amortisation of intangible assets (425) (647)
Other administrative expenses (7,176) (8,738)
-------- --------
Total administrative expenses (7,876) (9,574)
Operating loss (650) (1,905)
Finance income and expense 126 114
Loss before tax (524) (1,791)
Taxation 46 231
-------- --------
Total loss for the period attributable
to shareholders of the parent 2 (478) (1,560)
Loss per share
Total loss per share - basic
and diluted 2 (1.89)p (6.19)p
Consolidated statement of comprehensive
income
30 June 30 June
2016 2015
GBP'000 GBP'000
Loss for the period (478) (1,560)
Other comprehensive income:
Items that will be reclassified
subsequently to profit or loss:
Exchange differences on translation
of foreign operations 233 185
Deferred tax on translation
of foreign held assets (47) (21)
-------- ----------
Total other comprehensive income 186 164
Total comprehensive income for
the year attributable to shareholders
of the parent (292) (1,396)
======== ==========
Consolidated balance sheet
30 June 30 June
2016 2015
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 68 99
Goodwill 918 784
Intangible assets 1,321 1,216
Trade and other receivables 155 103
Investments - 6
-------- --------
2,462 2,208
Current assets
Trade and other receivables 1,025 1,095
Current tax recoverable - 181
Cash and cash equivalents 843 986
-------- --------
1,868 2,262
Assets in disposal group classified
as held for sale 3 142 -
-------- --------
2,010 2,262
Total assets 4,472 4,470
Equity and liabilities
Equity
Issued capital 51 50
Share premium 119 -
Share based payment reserve 344 189
Foreign exchange reserve 467 281
Retained earnings 640 1,118
-------- --------
1,621 1,638
Non-current liabilities
Deferred tax 100 97
100 97
Current liabilities
Trade and other payables 2,583 2,731
Current tax 10 4
2,593 2,735
Liabilities directly associated
with assets in disposal groups
classified as held for sale 3 158 -
-------- --------
2,751 2,735
-------- --------
Total liabilities 2,851 2,832
-------- --------
Total equity and liabilities 4,472 4,470
======== ========
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 2014 6,305 8,102 221 617 117 (12,517) 2,845
Equity settled
share options - - - 189 - - 189
--------- --------- --------- --------- ---------- ---------- --------
Total 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 other comprehensive
income - - - - 164 - 164
--------- --------- --------- --------- ---------- ---------- --------
Total comprehensive
income - - - - 164 (1,560) (1,396)
Share consolidation (6,255) (8,102) (221) (617) - 15,195 -
At 30 June 2015 50 - - 189 281 1,118 1,638
Equity settled
share options - - - 155 - - 155
Share issues 1 119 - - - - 120
--------- --------- --------- --------- ---------- ---------- --------
Total transactions
with owners 1 119 - 155 - - 275
Loss for the period
after tax - - - - - (478) (478)
Other comprehensive
income
Exchange differences
on translation
of foreign operations - - - - 233 - 233
Deferred tax on
translation of
foreign held assets - - - - (47) - (47)
--------- --------- --------- --------- ---------- ---------- --------
Total other comprehensive
income - - - - 186 - 186
--------- --------- --------- --------- ---------- ---------- --------
Total comprehensive
income - - - - 186 (478) (292)
At 30 June 2016 51 119 - 344 467 640 1,621
========= ========= ========= ========= ========== ========== ========
Consolidated cash flow statement
12 months 12 months
to to
30 June 30 June
2016 2015
GBP'000 GBP'000
Cash flows from operating activities
Loss for the year (478) (1,560)
Taxation (46) (231)
Net finance income in the income
statement (126) (114)
Depreciation of property, plant
& equipment 83 61
Amortisation 425 647
Adjustment to fair value of
embedded derivative 225 200
Share based payments - options 155 189
Issue of share capital 120 -
Increase in trade and other
receivables (80) 133
(Decrease)/increase in trade
and other payables (148) 463
Net cash generated /(used) by
continuing operations 130 (212)
Income tax receivable 236 46
---------- ----------
Net cash generated/(used) by
operating activities 366 (166)
Cash flows from financing activities
Interest paid (1) -
Net cash generated by financing (1) -
activities
Cash flows from investing activities
Payments for property plant
and equipment (52) (89)
Purchase of intangibles (399) (472)
Sale/(purchase) of investments 6 (6)
Net cash used by investing activities (445) (567)
Net decrease in cash and cash
equivalents (80) (733)
Exchange differences (79) 44
---------- ----------
Decrease in cash and cash equivalents
continuing operations (159) (689)
Cash generated by disposal group 16 -
---------- ----------
Net decrease in cash and cash
equivalents (143) (689)
Cash and cash equivalents at
the start of the period 986 1,675
---------- ----------
Cash and cash equivalents at
the end of the period 843 986
========== ==========
1. Segmental analysis
The directors identify operating segments based upon the
information which is regularly reviewed by the chief operating
decision maker. The Group considers that the chief operating
decision makers are the executive members of the Board of
Directors. The Group has identified two reportable operating
segments, being that of the provision of financial information and
that of other services. The provision of financial information is
made via the Group's various website platforms.
The parent entities operations are entirely of the provision of
financial information.
Two minor operating segments, for which IFRS 8's quantitative
thresholds have not been met, are currently combined below under
'other'. The main sources of revenue for these operating segments
is the provision of financial broking services and other internet
services not related to financial information. The Disposal Group
segment comprises Investor Events Limited which is held for sale
with completion on 30 September 2016. Segment information can be
analysed as follows for the reporting period under review:
2016 Provision Other Total Disposal Total
of financial Group
information
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external
customers 7,558 745 8,303 - 8,303
Depreciation and
amortisation (604) 117 (487) - (487)
Other operating
expenses (7,710) (756) (8,466) - (8,466)
-------------- -------- -------- --------- --------
Segment operating
loss (756) 106 (650) - (650)
Interest income 126 - 126 - 126
Interest expense - - - - -
============== ======== ======== ========= ========
Segment assets 4,348 (18) 4,330 142 4,472
Segment liabilities (2,620) (73) (2,693) (158) (2,851)
Purchases of non-current
assets 316 86 402 - 402
============== ======== ======== ========= ========
2015 Provision Other Total Disposal Total
of financial group
information
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external
customers 8,695 228 9,297 - 9,297
Depreciation and
amortisation (612) (78) (690) - (690)
Other operating
expenses (9,876) (262) (10,512) - (10,512)
-------------- -------- --------- --------- ---------
Segment operating
loss (1,793) (112) (1,905) - (1,905)
Interest income 114 - 114 - 114
Interest expense - - - - -
============== ======== ========= ========= =========
Segment assets 4,595 (276) 4,319 151 4,470
Segment liabilities (2,586) (164) (2,750) (82) (2,832)
Purchases of non-current
assets 380 92 472 - 472
============== ======== ========= ========= =========
The Group's revenues, which wholly relate to the sale of
services, from external customers and its non-current assets, are
divided into the following geographical areas:
Revenue Non-current Revenue Non-current
assets assets
2016 2016 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000
UK (domicile) 3,807 1,209 3,587 1,070
USA 3,731 1,253 4,919 1,138
Other 765 - 791 -
8,303 2,462 9,297 2,208
======== ============ ======== ============
Revenues are allocated to the country in which the customer
resides. During both 2016 and 2015 no single customer accounted for
more than 10% of the Group's total revenues.
2. Loss per share
12 months 12 months
to to
30 June 30 June
2016 2015
GBP'000 GBP'000
Loss for the year attributable to
equity shareholders (478) (1,560)
Total loss per share - basic and
diluted (1.89)p (6.19)p
Shares Shares
Weighted average number of shares
in issue for the year 25,237,597 25,220,210
Dilutive effect of options - -
----------- -----------
Weighted average shares for diluted
earnings per share 25,237,597 25,220,210
=========== ===========
Where a loss has been recorded for the year the diluted loss per
share does not differ from the basic loss per share as the exercise
of share options would have the effect of reducing the loss per
share and is therefore not dilutive under the terms of IAS 33.
3. Disposal of Investor Events Limited
On 19(th) May 2016 an agreement was reached to dispose of the
business Investor Events Limited. The disposal was effected in
order to generate cash flow to benefit the other Group businesses.
The disposal was completed 30 September 2016. The proceeds of the
disposal amounted to GBP40,000 and exceeded the book value of other
related net assets and accordingly no impairment losses have been
recognised. The major classes of assets and liabilities comprising
the operation are as below:
Net assets of the disposal group 2016
GBP'000
Current assets
Trade receivables 18
Other receivables 120
Cash and cash equivalents 4
Total assets classified as held for sale 142
========
Current liabilities
Accrued expenses (158)
Total liabilities associated with assets
classified as held for sale (158)
--------
Net assets of disposal group (16)
========
The result for the company was a profit of GBP11,000 (2015:
GBPnil)
4. Events after the balance sheet date
The sale of the subsidiary company Investor Events Limited was
completed on 30 September 2016 (see note 3). The amount of the
consideration exceeded the carrying value of the net assets and
therefore no impairment was required.
There are no other events of significance occurring after the
balance sheet date to report.
5. Publication of non-statutory accounts
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
section 435 of the Companies Act 2006.
The consolidated balance sheet at 30 June 2016 and the
consolidated income statement, consolidated statement of
comprehensive income, consolidated statement of changes in equity,
consolidated cash flow statement and associated notes for the year
then ended have been extracted from the Company's 2016 statutory
financial statements upon which the auditors' opinion is
unqualified and does not include any statement under Section 498(2)
or (3) of the Companies Act 2006.
The annual report and accounts will shortly be sent to
shareholders and will be available on the Company's website,
http://www.advfn.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BLBDGISDBGLB
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