TIDMAFN
RNS Number : 0613V
ADVFN PLC
23 October 2014
ADVFN PLC
Audited Results for the Year Ended 30 June 2014
ADVFN, the global stocks and shares website, announces its
audited results for the year ended 30 June 2014
-- EBITDA* profit increases to GBP298,000 (2013: profit of GBP108,000 )
-- Loss for the period down to GBP454,000 (2013: loss of GBP539,000)
-- ADVFN's registered user base continues to grow and is in
excess of 3,000,000 (2013: 2,800,000)
For further information, please contact:
Clem Chambers,
ADVFN PLC CEO
0207 0700 909
Salmaan Khawaja/Edward Thomas
Grant Thornton UK LLP (Nominated Adviser)
0207 383 5100
*EBITDA is calculated as the operating result for the year
before depreciation and amortisation charges.
CHIEF EXECUTIVE'S STATEMENT
2014 was a good year. Our EBITDA was GBP298,000 up 176%. This
was on top of a significant improvement in the year before.
Sales were GBP9,702,000 up GBP1,625,000 from GBP8,077,000, an
increase of 20% from 2013 levels.
The operating loss improved again in 2014 by GBP208,000 from a
loss of GBP871,000 in 2013 to GBP663,000 this year.
Our cash rose by GBP214,000 to GBP1,675,000 from GBP1,461,000 in
2014.
These solid gains have been against a background of further
investment, apparently depressed market activity as far as market
participants are concerned and a rampant pound which suppressed the
results of our very strong US performance.
Our US business has continued to perform very satisfactorily
with particularly strong growth in the winter and spring of 2014.
The US market has been far and away the highlight of the year.
ADVFN's growth has come from increased advertising sales, which
has coincided with our total subscriber numbers rising.
Our focus remains the same with particular concentration on the
US which continues to deliver on its promise.
Last year I mentioned that ADVFN has over the years grown and
plateaued only to grow again when changes in the market or product
breakthrough trigger a period of growth. As I write it appears we
continue to be in a growth phase.
We continue to look out for acquisitions and joint ventures and
one of these developments has been the joint venture with
Topstocks.com in Australia. This has begun to be a
revenue-generator for us and has given us another model to apply to
opportunities where a JV is more appropriate with a website than
the acquisition of all or part of it.
It is a positive sign that while 2014 has not been a bull year
for world markets we have still been making good progress. It is of
our opinion that if the market was to crash ADVFN would do very
well as ultimately the thing traders hate most is inactivity in the
market. Previous corrections and crashes have resulted in traffic
increases for us, and this outcome would present an opportunity to
showcase the site to a whole new generation.
We have been working extremely hard in 2014. That is not to say
we do not every year, but 2013-2014 has been a period of
significant change and reorganisation. This should have been
invisible to our customers and shareholders; if it hasn't been then
we have not done it smoothly enough.
We have been building out our sales force, re-engineering our
infrastructure and working on new products and features.
This is the core process that will drive future growth.
We felt 2013-2014 would be another solid year and it has come in
a little ahead of our expectations. We believe that 2014-2015 also
looks positive.
Key to this year has been our US OTC QX listing in the US and
our capital reorganization and American Depository Receipts (ADR)
program. Picking our Google analytic stats at random, in April 2014
we had 5.4 million US visitors in that month according to Comscore
we are the ninth biggest finance site in the US by page
impressions. The eight bigger were: Yahoo Finance, MSN Money, Dow
Jones & Company, CNBC, Bloomberg, AOL Money & Finance, CNN
Money and Forbes Digital. Anyone else you have ever heard of in our
field is smaller than us in the US, that's staggering.
We, of course, know the numbers inside out but no matter how
often we review ADVFN's website stats, our scale in America is
significant and we are thrilled by it. In a nutshell it means we
have an opportunity to add significant shareholder value in the
medium to long term if we can gain a US internet valuation for our
business.
We do have a natural advantage in this effort, as we have three
million active, high risk small cap investors as a loyal and
engaged user base within the US.
During 2015 we hope to continue to show how well we can present
ourselves to this audience which, if we are successful in reaching
them, will drive a flow of our UK shares into the US ADR.
It's an exciting prospect.
Clem Chambers
CEO
22 October 2014
STRATEGIC REPORT
Financial Overview
These accounts have been prepared under International Financial
Reporting Standards (IFRS) as adopted by the European Union.
This year's Group results show a significant improvement with
EBITDA improving by GBP190,000 from GBP108,000 to GBP298,000.
The result after tax, which includes GBP1,178,000 of non-cash
items, was a loss of GBP454,000, an improvement of GBP85,000
against a loss in 2013 of GBP539,000.
We continue to be robust on costs, which has given us the
resources to continue to invest heavily in R&D and
international markets. We have also increased our marketing with
online brand building.
Business Review
I normally find myself trying to say the long term plan for the
business is exactly the same one as we had last year and the year
before. We try to stick with our long term strategy and we have
ploughed the same strategic furrow for more than a decade. Our
strategy has not made us a billion dollar company but it has left
us as one of only a smattering of surviving dotcom boom internet
companies on AIM.
We aren't however complacent about our progress. We are trying
to become an internet colossus and we are working hard towards that
goal, even if we are still not galloping towards that destination
at great speed.
While we are not going to throw our strategy away we are however
thinking a new thought.
Whilst the UK is a great place for technical and sales talent
and sits in the heart of the global financial system, it is not
necessarily, from a financial markets perspective, the most benign
environment for small internet and technology companies.
This is why we have gone to the considerable trouble of listing
on the OTC Markets QX tier. Our huge user base in the US loves
small cap companies as much as US investors in general love tech
companies. As such with our new US listing we plan to try to become
a highly regarded listed small cap internet company in the US. With
this in mind we have put the technical equity mechanisms in place
to make it possible to operate a dual listing, which allows our
shares to flow freely from the UK to the significantly larger
market place of our US customers.
It's been hard work setting it all up, but the potential is very
exciting as anyone calculating the sales to market cap of US
internet companies will note.
We think a lot can go right in 2015.
Operating Costs
We have been very focused on costs over the last three years and
we have taken the decision to grow our head count again especially
in sales to monetize our increased inventory. While it takes time
for new hires to skill up at ADVFN we expect to begin feeling the
benefits of this investment in the latter half of the next
financial year.
Research and Development
R&D at ADVFN never stops and this year was no different.
As an aggregator of a myriad of feeds, we are always fixing what
gets broken upstream from us.
In the old days we would have said one of our core values was we
have a platform that pulls an ocean of financial information
together and then disseminates it to a huge audience. We are one of
a few vendors that can or do this for world markets. These days you
don't hear that this kind of platform is worth beyond gold. It is
however a big barrier of entry to competition.
We also must keep our infrastructure up to the latest standards
and ahead of demand, which might spike to giant levels should the
market, for example, crash.
Additionally this year we won patent pending status for new
market technology that we will apply to new product which we feel
could be breakthrough for us. If it isn't we will still have made
another step along the way.
As I said last year, R&D will always be the heart of
ADVFN.
Environmental policy
The company as a whole continues to look for ways to develop our
environmental policy. It remains our objective to improve our
performance in this area.
Summary of key performance indicators
2014 2014 2013 2013
Actual Target Actual Target
-------------------- -------- -------- -------- -------
EBITDA GBP298k GBP200k GBP108k GBP50k
-------- -------- --------
Average head count 43 44 37 40
-------------------- -------- -------- -------- -------
ADVFN registered
users 3.0M 2.9M 2.8M 2.7M
-------------------- -------- -------- -------- -------
Future outlook for the business.
You may have noticed from the tone of this year's report, I am
very positive about the road ahead.
While it's good to have strong top line growth and solid all
round performance improvements there is nothing like the prospect
of a shot of a breakthrough to raise spirits.
The opportunity of being able to present the company to millions
of new investors is a bracing prospect.
Meanwhile we are expecting to continue along the same path as
the last two years.
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 Japan. 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. 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.
Consideration of the principle risks associated with financial
instruments is contained in note 22.
People
We are a dedicated, highly skilled and loyal team. I would like
to thank everyone for enabling ADVFN to provide a superb 24/7/365
service to millions of users around the globe; the private
investors of the world.
ON BEHALF OF THE BOARD
Clem Chambers
CEO
22 October 2014
Consolidated income statement
12 months 12 months
to to
30 June 30 June
2014 2013
GBP'000 GBP'000
Revenue 9,702 8,077
Cost of sales (1,165) (339)
---------- ----------
Gross profit 8,537 7,738
Share based payment (54) (93)
Amortisation of intangible assets (914) (917)
Other administrative expenses (8,232) (7,599)
---------- ----------
Total administrative expenses (9,200) (8,609)
Operating loss (663) (871)
Finance income 108 95
Loss before tax (555) (776)
Taxation 101 242
---------- ----------
Total loss after taxation for
continuing operations (454) (534)
Total (loss)/profit after taxation
from discontinued operations - (5)
Loss for the period attributable
to shareholders of the parent (454) (539)
Loss per share - basic and diluted
based on consolidated shares (1.80)p (2.14)p
Consolidated statement of comprehensive
income
12 months 12 months
to to
30 June 30 June
2014 2013
GBP'000 GBP'000
Loss for the period (454) (539)
Other comprehensive income:
Items that will be reclassified
subsequently to profit or loss:
Exchange differences on translation
of foreign operations (190) 69
Deferred tax on translation
of foreign held assets 29 (6)
---------- ----------
Total other comprehensive income (161) 63
Total comprehensive income for
the year attributable to shareholders
of the parent (615) (476)
========== ==========
Consolidated balance sheet
30 June 30 June
2014 2013
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 71 61
Goodwill 724 806
Intangible assets 1,331 1,777
Trade and other receivables 295 485
--------- ---------
2,421 3,129
Current assets
Trade and other receivables 1,122 925
Current tax recoverable 60 46
Cash and cash equivalents 1,675 1,461
--------- ---------
2,857 2,432
--------- ---------
Total assets 5,278 5,561
Equity and liabilities
Equity
Issued capital 6,305 6,291
Share premium 8,102 8,062
Merger reserve 221 221
Share based payment reserve 617 563
Foreign exchange reserve 117 278
Retained earnings (12,517) (12,063)
--------- ---------
2,845 3,352
Non-current liabilities
Deferred tax 134 249
134 249
Current liabilities
Trade and other payables 2,269 1,954
Current tax 31 6
2,299 1,960
Total liabilities 2,433 2,209
--------- ---------
Total equity and liabilities 5,278 5,561
========= =========
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 2012 6,289 8,057 221 474 215 (11,528) 3,728
Issue of shares 2 5 - - - - 7
Exercise of share
options - - - (4) - 4 -
Equity settled
share options - - - 93 - - 93
--------- --------- --------- --------- ---------- ---------- --------
Transactions with
owners 2 5 - 89 - 4 100
Loss for the period
after tax - - - - - (539) (539)
Other comprehensive
income
Exchange differences
on translation
of foreign operations - - - - 69 - 69
Deferred tax on
translation of
foreign held assets - - - - (6) - (6)
--------- --------- --------- --------- ---------- ---------- --------
Total comprehensive
income for the
year - - - - 63 (539) (476)
At 30 June 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
========= ========= ========= ========= ========== ========== ========
Consolidated cash flow statement
12 months 12 months
to to
30 June 30 June
2014 2013
GBP'000 GBP'000
Cash flows from operating activities
Loss for the period before tax (555) (776)
Net finance income in the income
statement (unwinding receivable) (108) (95)
Depreciation of property, plant
& equipment 47 62
Amortisation 914 917
Adjustment to fair value of
embedded derivative 250 300
Share based payments 54 93
(Increase)/decrease in trade
and other receivables (149) 149
Increase/(decrease) in trade
and other payables 314 (199)
Net cash generated by continuing
operations 767 451
Net cash used by discontinued
operations - (5)
---------- ----------
767 446
Income tax (payable)/receivable (3) 77
---------- ----------
Net cash generated by operating
activities 764 523
Cash flows from investing activities
Payments for property plant
and equipment (57) (40)
Purchase of intangibles (495) (499)
Net cash used by investing activities (552) (539)
Cash flows from financing activities
Proceeds from issue of equity
shares - 7
Net cash generated by financing
activities - 7
---------- ----------
Net increase /(decrease) in
cash and cash equivalents 212 (9)
Exchange differences 2 30
---------- ----------
Total increase in cash and cash
equivalents 214 21
Cash and cash equivalents at
the start of the period 1,461 1,440
---------- ----------
Cash and cash equivalents at
the end of the period 1,675 1,461
========== ==========
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 research services. The provision of financial information
is made via the Group's various website platforms.
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. Segment information
can be analysed as follows for the reporting period under
review:
2014 Provision Other Total
of financial
information
GBP'000 GBP'000 GBP'000
Revenue from
external customers 9,354 357 9,711
Depreciation
and amortisation (793) - (793)
Other operating
expenses (9,101) (325) (9,426)
-------------- -------- --------
Segment operating
profit/(loss) (540) 32 (508)
Interest income 108 - 108
Interest expense - - -
Segment assets 7,169 245 7,414
Segment liabilities (2,451) (10) (2,461)
Purchases of
non-current assets 549 - 549
============== ======== ========
2013 Provision Other Total Research Total
of financial continuing services
information operations (Disposal
group)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue from
external customers 7,835 252 8,087 16 8,103
Depreciation
and amortisation (804) (3) (807) - (807)
Other operating
expenses (7,754) (182) (7,936) (21) (7,957)
Segment operating
(loss)/profit (723) 67 (656) (5) (661)
Interest income 95 - 95 - 95
Interest expense - - - - -
Segment assets 7,407 254 7,661 - 7,661
Segment liabilities (2,080) (57) (2,137) - (2,137)
Purchases of
non-current assets (554) - (554) - (554)
============== ======== ============ =========== ========
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
2014 2014 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000
UK (domicile) 3,800 3,140 3,594 3,134
USA 5,039 1,225 3,639 1,409
Other 872 1 854 -
Discontinued operations - - 16 -
-------- ------------ -------- ------------
9,711 4,366 8,103 4,543
======== ============ ======== ============
Revenues are allocated to the country in which the customer
resides. During both 2014 and 2013 no single customer accounted for
more than 10% of the Group's total revenues.
The segmental information regularly reviewed by the Board is
presented under UK GAAP and, as a result, a key reconciling item
between the segmental and the Group financial information relates
to IFRS conversion.
The totals presented for the Group's operating segments
reconcile to the entity's key financial figures as presented in its
financial statements as follows:
2014 2013
GBP'000 GBP'000
Revenue
Total segment revenue 9,711 8,103
Consolidation adjustment (9) (10)
-------- --------
Group revenue 9,702 8,093
Disposal group revenue - (16)
-------- --------
Group revenue net of discontinued
operations 9,702 8,077
======== ========
Segment profit or loss
Total segment operating (loss) (508) (661)
Consolidation adjustments (393) (396)
IFRS conversion adjustments 238 186
-------- --------
Group operating loss (663) (871)
Finance income 108 95
Group loss before tax (555) (776)
======== ========
2014 2013
GBP'000 GBP'000
Segment assets
Total segment assets 7,414 7,661
Consolidation adjustments (2,933) (2,669)
IFRS conversion adjustments 797 569
-------- --------
Total Group assets 5,278 5,561
======== ========
Segment liabilities
Total segment liabilities (2,461) (2,137)
Consolidation adjustments (860) (848)
IFRS conversion adjustments 923 665
-------- --------
Total Group liabilities (2,398) (2,320)
======== ========
Consolidation adjustments primarily relate to the elimination of
investments and the calculation of goodwill. IFRS conversion
adjustments primarily relate to the different accounting bases for
the Group's intangible and tangible assets under IFRS and UK GAAP.
Significant items adjusting for both consolidation and IFRS
conversion items were amortisation of intangible assets and
depreciation of property plant and equipment.
2. Loss per share
12 months 12 months
to to
30 June 30 June
2014 2013
GBP'000 GBP'000
Re-stated
(Loss) for the year from continuing
operations attributable to equity
shareholders (454) (534)
(Loss)/profit for the year from discontinued
operations - (5)
----------- -----------
Total (loss) for the year (454) (539)
=========== ===========
Total (loss) per share- basic and
diluted - following share consolidation (1.80)p (2.14)p
=========== ===========
Loss per share based on pre-consolidation
shares in issue (0.07)p (0.09)p
Weighted average number of shares
in issue for the year - consolidated 25,219,905 25,163,136
Dilutive effect of options - -
----------- -----------
Weighted average shares for diluted
earnings per share - consolidated 25,219,905 25,163,136
=========== ===========
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.
Share consolidation
At the company's General Meeting held on 20 August 2014, the
resolution to approve the share consolidation of existing issued
Ordinary shares of GBP0.01 each in the capital of the company shall
be consolidated into Ordinary shares of GBP0.25 each, was duly
passed. The number of post consolidation Ordinary shares is
disclosed above.
3. Events after the balance sheet date
At the company's General Meeting held on 20 August 2014, the
resolution to approve the share consolidation of existing issued
Ordinary shares of GBP0.01 each in the capital of the company shall
be consolidated into Ordinary shares of GBP0.25 each, was duly
passed. In addition, approval was also sought for the cancellation
of the share premium account and the capitalisation of the share
based payment account and the merger reserve.
4. 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 2014 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 2014 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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