TIDMAFN
RNS Number : 3846U
ADVFN PLC
23 October 2017
Audited Results for the Year Ended 30 June 2017
ADVFN, the global stocks and shares website, announces its
audited results for the year ended 30 June 2017
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
As covered in previous statements, the 2016 financial year had
been a transformational year with a change in the long term
strategy of the Company from international growth to consolidation
of the existing business. We had also reported that cash burn and
losses were almost unavoidable with the sort of investment programs
the Company had undertaken in the past. The ADVFN board believed
that the UK stock market did not favour a strategy of further
investment so the Company had changed direction during the course
of the last financial year in order to avoid needing to raise
further funding and to instead produce profits and cash flow.
As a result of a focus on profits rather than growth, we have
pulled back from investment and have continued to strive for
profitability. Whilst this has crimped our ability to grow, we have
made good progress on the bottom line.
We remain however in a complex and difficult marketplace which
constantly brings new challenges whether we look for them or not.
This business environment continues to change rapidly and we have
kept a pace with it from the agility of the ADVFN team.
The operating loss of the past (GBP650,000 in 2016) has now
become a profit of GBP47,000, a solid improvement. Sales are at a
similar level to 2016 at GBP8,186,000 (GBP8,303,000 in 2016) and
this is a strong result in the circumstances.
Advertising and subscription sales have waxed and waned and we
have been able to make up for developing weaknesses with new
products, price rises and other innovations.
While our performance has been satisfactory, looking ahead, the
strengthening of the Sterling, which has occurred since the year
end could potentially be a significant drag on us if the US dollar
does not appreciate alongside the Sterling, which currently it is
not.
Clement Chambers
CEO
23 October 2017
STRATEGIC REPORT
Financial Overview
These consolidated and company accounts have been prepared under
International Financial Reporting Standards (IFRS) as adopted by
the European Union.
As ever we are in a continued environment of rising costs in
data licenses and exchange fees. We will continue to monitor these
and adapt as required.
Business Review
As I said in last year's statement ADVFN has undergone a
restructuring process which, whilst not requiring additional
investment, was not an easy one but the change in our numbers is
shown in these results. The markets have risen over the past year
to record levels and some people have done well. However, this rise
seems to have gone almost unnoticed by the mainstream media. Other
areas are now what is entertaining the one time would be trader.
Brexit has collected all the headlines as has the election of
President Trump, both of which have caused an interesting ride for
our market. Our focus on the technology is important as we look
forward to the forthcoming year with great excitement
Operating Costs
Our main costs are relatively fixed but licence and exchange
fees are continuing to rise and it is these we must keep a close
eye on and if need be change what we offer.
Research and Development ("R&D")
Like most technology / media companies we are highly focused on
new developments including improvements to our website, products,
tools etc. Our research and development is key to our future. The
web and mobile environment continue to move and change and it's our
R&D that allows us to keep ahead. Our R & D investment this
year has been GBP379,000 (2016: GBP399,000) and ensures our web
experience remains fresh and relevant.
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
It is important for us to keep focused on the technology and
continue to strive to be ahead of this new market changing process.
If we can do so, it will open up many new opportunities that I hope
we can develop and into which we can push the business.
Summary of key performance indicators
Our key indicators have not changed, as they are an important
part of the business.
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:
2017 2017 2016 2016
Actual Target Actual Target
-------------------- -------- -------- -------- --------
Turnover GBP8.2M GBP8.0M GBP8.3M GBP8.0M
-------- -------- --------
Average head count 32 35 37 37
-------------------- -------- -------- -------- --------
ADVFN registered
users 4.0M 3.8M 3.5M 3.3M
-------------------- -------- -------- -------- --------
Turnover - is of vital importance as it gives the sales
department a goal and measures the financial success of the Group's
services.
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.
It is clear that our small reduction in headcount has been
accompanied by a rise in both registered users and turnover. Our
conclusion is that we are becoming more productive and by reducing
our single largest cost, potentially more profitable. This is a
fine line to tread and we will not compromise on the quality of our
staff. For the future, any new products could have a ready market
in our increasing number of users.
STRATEGIC REPORT (continued)
Summary of key performance indicators (continued)
Principal risks and uncertainties
Economic downturn
The global economic recovery is a very slow process and as it
does we hope we ride with it.
However, as I mentioned above we face many new potential issues.
We have no control over the outcome and impact of the Brexit
negotiations. This, mixed with the new technologies which are on
their way, could make for an interesting ride.
High proportion of fixed overheads coupled with variable
revenues
A reasonable 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.
Product obsolescence
Our technology that we use is always in development and
constantly changing. All our technology and products are subject to
technological change and could become obsolete fast.
We must 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 major 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
Once again, I would like to thank the whole team at ADVFN who
tirelessly provide a global service for private investors that
never sleep.
ON BEHALF OF THE BOARD
Clement Chambers
CEO
23 October 2017
Consolidated income statement
30 June 30 June
2017 2016
Notes GBP'000 GBP'000
Revenue 8,186 8,303
Cost of sales (201) (1,077)
-------- --------
Gross profit 7,985 7,226
Share based payment - (275)
Amortisation of intangible assets (302) (425)
Other administrative expenses (7,636) (7,176)
-------- --------
Total administrative expenses (7,938) (7,876)
Operating profit/(loss) 47 (650)
Finance income and expense 167 126
Profit/(loss) before tax 214 (524)
Taxation 30 46
-------- --------
Total loss for the period attributable
to shareholders of the parent 244 (478)
Profit/(loss) per share
Basic 2 0.10 p (1.89)p
Diluted 2 0.10 p (1.89)p
Consolidated statement of comprehensive
income
30 June 30 June
2017 2016
GBP'000 GBP'000
Profit/(loss) for the period 244 (478)
Other comprehensive income:
Items that will be reclassified
subsequently to profit or loss:
Exchange differences on translation
of foreign operations (281) 233
Deferred tax on translation
of foreign held assets 92 (47)
-------- --------
Total other comprehensive income (189) 186
Total comprehensive income for
the year attributable to shareholders
of the parent 55 (292)
======== ========
Consolidated balance sheet
30 June 30 June
2017 2016
Notes GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 53 68
Goodwill 948 918
Intangible assets 1,156 1,321
Deferred tax 6 -
Trade and other receivables 92 155
2,255 2,462
Current assets
Trade and other receivables 948 1,025
Cash and cash equivalents 963 843
-------- --------
1,911 1,868
Assets in disposal group classified
as held for sale - 142
-------- --------
1,911 2,010
Total assets 4,166 4,472
Equity and liabilities
Equity
Issued capital 51 51
Share premium 145 119
Share based payment reserve 344 344
Foreign exchange reserve 278 467
Retained earnings 884 640
-------- --------
1,702 1,621
Non-current liabilities
Deferred tax - 100
- 100
Current liabilities
Trade and other payables 2,464 2,583
Current tax - 10
2,464 2,593
Liabilities directly associated
with assets in disposal groups
classified as held for sale - 158
-------- --------
2,464 2,751
-------- --------
Total liabilities 2,464 2,851
-------- --------
Total equity and liabilities 4,166 4,472
======== ========
Consolidated statement of changes in equity
Share Share Share Foreign Retained Total
capital premium based exchange earnings equity
payment reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 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
Equity settled share
options
Share issues - 26 - - - 26
--------- --------- --------- ---------- ---------- --------
Total transactions
with owners - 26 - - - 26
Profit for the period
after tax - - - - 244 244
Other comprehensive
income
Exchange differences
on translation of
foreign operations - - - (281) - (281)
Deferred tax on translation
of foreign held assets - - - 92 - 92
--------- --------- --------- ---------- ---------- --------
Total other comprehensive
income - - - (189) - (189)
--------- --------- --------- ---------- ---------- --------
Total comprehensive
income - - - (189) 244 55
--------- --------- --------- ---------- ---------- --------
At 30 June 2017 51 145 344 278 884 1,702
========= ========= ========= ========== ========== ========
Consolidated cash flow statement
12 months 12 months
to to
30 June 30 June
2017 2016
Notes GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the year 244 (478)
Taxation (30) (46)
Net finance income in the income
statement (167) (126)
Depreciation of property, plant
& equipment 52 83
Amortisation 286 425
Profit on disposal of Investor
Events (56)
Adjustment to fair value of
embedded derivative 225 225
Share based payments - options - 155
Increase in trade and other
receivables 82 (80)
(Decrease)/increase in trade
and other payables (119) (148)
Net cash generated by continuing
operations 517 130
Income tax receivable 14 236
---------- ----------
Net cash generated by operating
activities 531 366
Cash flows from financing activities
Issue of share capital 26 120
Interest paid - (1)
Net cash generated/(used) by
financing activities 26 (1)
Cash flows from investing activities
Payments for property plant
and equipment (37) (52)
Purchase of intangibles (379) (399)
Sale of Investor Events 40 -
Sale/(purchase) of investments - 6
Net cash used by investing activities (376) (445)
Net decrease in cash and cash
equivalents 181 (80)
Exchange differences (61) (79)
---------- ----------
Decrease in cash and cash equivalents
continuing operations 120 (159)
Cash generated by disposal group - 16
---------- ----------
Net decrease in cash and cash
equivalents 120 (143)
Cash and cash equivalents at
the start of the period 843 986
---------- ----------
Cash and cash equivalents at
the end of the period 963 843
========== ==========
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 comprised Investor Events Limited which was held for sale
with completion on 30 September 2016. Segment information can be
analysed as follows for the reporting period under review:
2017 Provision Other Total Disposal Total
of financial group
information
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external
customers 7,814 372 8,186 - 8,186
Depreciation and
amortisation (465) 127 (338) - (338)
Other operating
expenses (7,380) (421) (7,801) - (7,801)
-------------- -------- -------- --------- --------
Segment operating
(loss)/profit (31) 78 47 - 47
Interest income 167 - 167 - 167
Interest expense - - - - -
============== ======== ======== ========= ========
Segment assets 3,935 231 4,166 - 4,166
Segment liabilities (2,430) (34) (2,464) - (2,464)
Purchases of non-current
assets 313 103 416 - 416
============== ======== ======== ========= ========
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)/profit (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
============== ======== ======== ========= ========
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
2017 2017 2016 2016
GBP'000 GBP'000
UK (domicile) 3,288 1,272 3,807 1,209
USA 4,348 977 3,731 1,253
Other 550 - 765 -
8,186 2,249 8,303 2,462
======== ============ ======== ============
Revenues are allocated to the country in which the customer
resides. During both 2017 and 2016 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
2017 2016
GBP'000 GBP'000
Loss for the year attributable to
equity shareholders 244 (478)
Total loss per share - basic and
diluted
Basic 0.10 p (1.89)p
Diluted 0.10 p (1.89)p
Shares Shares
Weighted average number of shares
in issue for the year 25,612,338 25,237,597
Dilutive effect of options - -
----------- -----------
Weighted average shares for diluted
earnings per share 25,612,338 25,237,597
=========== ===========
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.
Where a profit has been recorded but the average share price for
the year remains under the exercise price the existence of options
is likewise not dilutive.
3. Disposal of Investor Events Limited
On 19 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 on 30 September 2016. The proceeds of
the disposal amounted to GBP40,000 and exceeded the book value of
other related net assets. The profit on disposal amounted to
GBP56,000 as net liabilities of GBP16,000 were disposed.
4. Events after the balance sheet date
Payments due from the shareholders of Equity Holdings and its
subsidiary Equity Developments as consideration for the purchase of
the companies has not been received. Amounts outstanding at the
reporting date comprise GBP200,000 in cash and the repayment of an
outstanding loan note of GBP1,000,000 was due on 31 July 2017.
Neither the loan note nor the cash instalments have been received
and therefore, ADVFN Plc has the right to acquire 99.5% of the
shares of Equity Holdings Limited as the loan note has converted
automatically to an option to acquire those shares. The Directors
have decided not to enforce said right as the business of Equity
Holdings remains outside of the longer term strategy of the group.
As a result the Directors have commenced proceeding to alter the
arrangements so as to potentially give ADVFN Plc a right to equity
in Equity Holdings should it grow in market value.
Apart from that there are no 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 2017 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 2017 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
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