TIDMONL
RNS Number : 5808F
On-Line PLC
12 November 2015
12 November 2015
('On-line' or 'the Company')
Preliminary Results for the Year Ended 30 June 2015
On-line today announces preliminary 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,
www.on-line.co.uk.
For further information, please contact:
Michael Hodges
Chairman and Managing Director
mikeh@advfn.com
Salmaan Khawaja/ Jen Clarke/ Jamie Barklem
Grant Thornton UK LLP (Nominated Adviser)
0207 383 5100
Chairman's Statement
On-Line plc continues in its role of an investment company whose
sole investment is that of a holding of 18.26% in ADVFN plc. The
Company has continued to work with ADVFN as it makes progress in
the financial data market. Our turnover for the year was GBP94,000
(2014: GBP78,000) giving us a loss before tax of GBP4,000 (2014:
loss of GBP9,000).
The Company's financial performance for the year and Key
Performance Indicators are analysed in the Strategic Report.
On-line is the largest shareholder in ADVFN, the Company works
closely with ADVFN to ensure its success, which in time will be of
great benefit to us.
Extracts from ADVFN's 2015 accounts:
ADVFN plc
Below are some high lights from the ADVFN's Chief Executives
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 who
were seeking to take control of the ADVFN board (the
"Requisitioning Shareholders").
This was a major distraction and the situation was resolved by
the FCA 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.
EXTRACT FROM THE ADVFN STRATEGIC REPORT
Summary of key performance indicators
2015 2015 2014 2014
Actual Target Actual Target
-------------------- -------- -------- -------- --------
GBP9 - GBP9 -
Turnover GBP9.3M GBP10M GBP9.7M GBP10M
-------- -------- --------
Average head count 53 53 43 44
-------------------- -------- -------- -------- --------
ADVFN registered
users 3.2M 3.1M 3.0M 2.9M
-------------------- -------- -------- -------- --------
On-Line plc's Strategic Report
The strategy for the Company remains that of an investment
company and currently the single investment held by the Company is
that of a holding of 18.26% in ADVFN plc.
As an investment company On-line plc is always looking for
further investment opportunities and should other investment
opportunities present themselves the Directors will investigate
them appropriately. In the meantime On-line plc will continue to
work with ADVFN to help them develop and build their business whose
growth and potential profitability will directly benefit the
Company.
Principal risks and uncertainties
The management of the Company and the nature of the Company's
strategy are subject to a number of risks. The directors have set
out below the principal risks facing the business. The directors
are of the opinion that a thorough risk management process is
adopted which involves the formal review of all the risks
identified below. Where possible, processes are in place to monitor
and mitigate such risks.
Single investment
The Company has a single investment which provides economic
benefits to the Company; this places a reliance on the performance
of the investee which is high risk. The directors see the close
working relationship with ADVFN as well as the search for
additional investments and the building of an investment portfolio
in the long term as necessary mitigating activities. However the
prospects for ADVFN are currently very positive.
Economic downturn
The success of the world's stock markets might affect the
business given the sector our investment operates in. Many things
around the world can affect a stock market from war to human error.
This can also have a knock on effect to consumer spending power as
has been seen with the recent credit crunch around the world,
although in the past when we have seen a market downturn this has
not impacted on usage of ADVFN, with customers generally wanting to
know what is happening in the markets, be it good or bad. In
response to this potential risk, senior management aim to keep
abreast of economic conditions around the world; not only should
senior management be aware of it, likewise so should our customers
and members. In cases of severe economic downturn, marketing and
pricing strategies are modified to reflect the new market
conditions.
High proportion of fixed overheads and variable revenues
A large proportion of the Company's overheads are reasonably
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 have been implemented. Revenue this year has shown
a significant increase.
Performance
The performance of the Company is reliant on the performance of
ADVFN plc. Certain management charges are levied on ADVFN which
forms the turnover of the Company. As a result of this reliance the
extract of the ADVFN accounts above will give necessary information
and background on the factors affecting the performance of the
Company. In addition the following KPI's may prove helpful:
2015 2015 2014 2014
Actual Target Actual Target
-------------------- -------- -------- -------- --------
Turnover (GBP'000) 94 80 78 80
-------- -------- --------
Operating results
(GBP'000) (4) (0) (7) (10)
-------------------- -------- -------- -------- --------
Loss per share
(pence) (0.05)p (0.00)p (0.12)p (0.11)p
-------------------- -------- -------- -------- --------
Operating costs
Our costs remain reasonably fixed and predictable and we do not
see that changing in the immediate future. However, the Directors
have made efforts to control the Company's running costs.
Research and development
We believe in trying to get the best from all areas that we work
in. It is very important that On-line and ADVFN continue to invest
in the quality and design of our products. We believe continued
investment in our research and development is fundamental to the
continuing growth of the business.
Environmental policy
This has always been important to the Company and as a whole we
continue to look for ways to develop our environmental policy. It
is our objective to improve our performance in this area.
Future developments for the business
We feel it is right for us to work with our investment and
assist it with its growth. This has seen it increase its business
and allow new areas to be explored. The prospect of ADVFN
continuing to grow in the medium term provides the incentive to go
on concentrating on this business in the immediate future. Should
other investment opportunities present themselves the Directors
will investigate them appropriately.
Approved and signed on behalf of the Board of Directors
Michael Hodges
Director
12 November 2015
Profit and Loss Account
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November 12, 2015 12:17 ET (17:17 GMT)
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