TIDMAFN
RNS Number : 2458G
ADVFN PLC
05 November 2018
5 November 2018
ADVFN PLC
("ADVFN" or the "Company")
Audited Results for the Year Ended 30 June 2018
ADVFN, the global stocks and shares website, announces its
audited results for the year ended 30 June 2018.
CHIEF EXECUTIVE'S STATEMENT
The financial year 2017/18 was a very interesting and
challenging year, one that has seen us add significant upside
potential to ADVFN. 2017 was the year of Bitcoin, which saw
Cryptocurrency and blockchains explode on to centre stage of the
financial markets. While even at the peak around Xmas of 2017 the
Cryptocurrency market was a tiny market in comparison with forex
and equities markets, it is of huge interest to the global private
investor.
We have an operating profit of GBP384,000 (GBP47,000 in 2017) a
solid improvement. Sales are up to GBP9,201,000
(GBP8,186,000 in 2017) and this is a strong result in the
circumstances.
This year we took advantage of these opportunities and have
positioned ourselves in the US and UK market with a strong
cryptocurrency information offering which has since become stronger
since the year end.
The timing of the Bitcoin bubble was fortunate as private
investor interest in equities has been at an all-time low. It is
perverse but our business in equities flourishes best when the
market crashes and our customers are hurt by corrections and
slumps. In strong markets investor complacency is not good for our
business and we rely on the diversified nature of our sales to
maintain revenue.
Happily, we were able to sail past these equity doldrums powered
by a compensating tailwind of Cryptocurrency information traffic.
Cryptocurrency information for the likes of Bitcoin and Ethereum is
a new category of financial information and one we are excited
about.
We are very bullish about the potential of future demand for
Cryptocurrency information and feel this can be a business
multiplier for us in the next 3-5 years. As you will see from the
figures, we have made the investment in technology and skills to
master and provide this information, without the costs materially
affecting our bottom line and you can see for yourself the quality
of our offering on the ADVFN and Investorshub website. This is the
platform from which we are building out our Blockchain information
offerings which we believe can be as lucrative as our equity
offerings.
Equities and Blockchain have distinct audiences and we find the
combination exciting. We believe our market potential just grew
significantly and that we can grow to fill it.
Clement Chambers
CEO
2 November 2018
The annual report and accounts will shortly be sent to
shareholders and will be available on the Company's website,
http://www.advfn.com
Enquiries:
For further information please contact:
ADVFN PLC
Clem Chambers +44 (0) 207 070 0909
Beaumont Cornish Limited (Nominated
Adviser)
www.beaumontcornish.com
Roland Cornish/Michael Cornish +44 (0) 207 628 3396
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. The person who arranged for the
release of this announcement on behalf of the Company was Clem
Chambers, Director.
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 always, 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
Our product, which is our website, can be seen at www.advfn.com.
Operating our websites is very technically challenging and is
subject to constant maintenance and engineering.
With the advent of the Blockchain and Cryptocurrencies we have
now added a new segment to the website to cater for the need of the
global cryptocurrency audience for timely and accurate data. We
expect this to expand the audience and traffic of our sites.
For our UK audience Brexit will be on most peoples agenda over
the next year and perhaps several years. We believe this market
stressing event could create increased interest in the markets in
the UK which is a very important market for us. ADVFN's information
sites are important windows onto world markets that private
investors around the world use to help manage their investing and
trading and we see opportunities for growth in providing these
sites.
Turnover has grown substantially in the last year and, as has
happened in previous years, the growth in the headcount has been in
parallel. This underlines the importance of having the talented
staff available in the company when there are opportunities to
expand. Our registered users go on increasing and provide us with a
ready market for the new products we are able to offer.
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 GBP353,000 (2017: GBP379,000) and all of this
investment has been to develop the website and has been
capitalised. This constant investment 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.
The Blockchain and Crypto Currencies are a new area that we are
building upon, which could open up 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:
2018 2018 2017 2017
Actual Target Actual Target
-------- -------- -------- --------
Turnover GBP9.2M GBP8.5M GBP8.2M GBP8.0M
-------- --------
Average head count 46 40 32 35
-------- -------- --------
ADVFN registered users 4.5M 4.2M 4.0M 3.8M
-------- -------- -------- --------
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.
STRATEGIC REPORT (continued)
Summary of key performance indicators (continued)
Registered users - give us an accurate indication of our
audience pool and the potential available for marketing our
service.
Principal risks and uncertainties
Economic downturn
I mentioned above we may face many new potential issues. We have
no control over the outcome and impact of the Brexit negotiations
and the leaving process its self. This, mixed with the new
technologies which are on their way, could make for an interesting
experience.
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. We closely monitor fixed overheads
against budget on a monthly basis and cost saving exercises are
implemented on a constant review basis.
Product obsolescence
I have said many times our technology that we use is always in
development and constantly changing and up dating. All our
technology and products are subject to technological change and
could become obsolete quickly.
As always we have to constantly innovate to keep up with growing
technical challenges that are changing all the time.
The Board is 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
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
2 November 2018
Consolidated income statement
30 June 30 June
2018 2017
Notes GBP'000 GBP'000
Revenue 9,201 8,186
Cost of sales (392) (201)
-------- --------
Gross profit 8,809 7,985
Share based payment (21) -
Amortisation of intangible assets (202) (302)
Other administrative expenses (8,202) (7,636)
-------- --------
Total administrative expenses (8,425) (7,938)
Operating profit 384 47
Finance income and expense - 167
Income from related parties 3 58 -
-------- --------
Profit before tax 442 214
Taxation (49) 30
-------- --------
Total profit for the period attributable
to shareholders of the parent 393 244
======== ========
Profit per share
Basic 2 1.53 p 0.10 p
Diluted 2 1.53 p 0.10 p
Consolidated statement of comprehensive
income
30 June 30 June
2018 2017
GBP'000 GBP'000
Profit for the period 393 244
Other comprehensive income:
Items that will be reclassified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations (33) (281)
Deferred tax on translation of foreign
held assets - 92
-------- --------
Total other comprehensive income (33) (189)
Total comprehensive income for the year
attributable to shareholders of the parent 360 55
======== ========
Consolidated balance sheet
30 June 30 June
2018 2017
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 136 53
Goodwill 941 948
Intangible assets 1,307 1,156
Investments 3 -
Deferred tax 4 6
Trade and other receivables 111 92
2,502 2,255
Current assets
Trade and other receivables 855 948
Cash and cash equivalents 1,061 963
-------- --------
1,916 1,911
-------- --------
Total assets 4,418 4,166
======== ========
Equity and liabilities
Equity
Issued capital 51 51
Share premium 145 145
Share based payment reserve 365 344
Foreign exchange reserve 245 278
Retained earnings 1,277 884
-------- --------
2,083 1,702
Current liabilities
Trade and other payables 2,313 2,464
Current tax 22 -
-------- --------
2,335 2,464
-------- --------
Total liabilities 2,335 2,464
-------- --------
Total equity and liabilities 4,418 4,166
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 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
Equity settled share options - - 21 - - 21
Total transactions with owners - - 21 - - 21
Profit for the period after
tax - - - - 393 393
Other comprehensive income
Exchange differences on translation
of foreign operations - - - (33) - (33)
Total other comprehensive
income - - - (33) - (33)
--------- --------- --------- ---------- ---------- --------
Total comprehensive income (33) 393 360
--------- --------- --------- ---------- ---------- --------
At 30 June 2018 51 145 365 245 1,277 2,083
========= ========= ========= ========== ========== ========
Consolidated cash flow statement
12 months 12 months
to to
30 June 30 June
2018 2017
GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the year 393 244
Taxation 49 (30)
Net finance income in the income statement - (167)
Depreciation of property, plant & equipment 68 52
Amortisation 202 286
Profit on disposal of Investor Events - (56)
Profit on disposal of Equity Holdings (53) -
Adjustment to fair value of embedded derivative - 225
Share based payments - options/warrants 21 -
Decrease in trade and other receivables 74 82
Decrease in trade and other payables (151) (119)
Net cash generated by continuing operations 603 517
Income tax (payable)/receivable (27) 14
---------- ----------
Net cash generated by operating activities 576 531
Cash flows from financing activities
Issue of share capital - 26
Interest paid - -
Net cash generated/(used) by financing
activities - 26
Cash flows from investing activities
Payments for property plant and equipment (151) (37)
Purchase of intangibles (353) (379)
Sale of Investor Events - 40
Receipt from related party 50 -
Net cash used by investing activities (454) (376)
Net decrease in cash and cash equivalents 122 181
Exchange differences (24) (61)
---------- ----------
Net increase in cash and cash equivalents 98 120
Cash and cash equivalents at the start
of the period 963 843
---------- ----------
Cash and cash equivalents at the end of
the period 1,061 963
========== ==========
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.
Three 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, financial
conference events and other internet services not related to
financial information. Segment information can be analysed as
follows for the reporting period under review:
2018 Provision Other Total
of financial
information
GBP'000 GBP'000 GBP'000
Revenue from external customers 8,900 301 9,201
Depreciation and amortisation (388) 122 (266)
Other operating expenses (7,984) (567) (8,551)
-------------- -------- --------
Segment operating (loss)/profit 528 (144) 384
Interest income - - -
Interest expense - - -
============== ======== ========
Segment assets 3,831 587 4,418
Segment liabilities (2,196) (139) (2,335)
Purchases of non-current assets 444 60 504
============== ======== ========
2017 Provision Other Total
of financial
information
GBP'000 GBP'000 GBP'000
Revenue from external customers 7,814 372 8,186
Depreciation and amortisation (465) 127 (338)
Other operating expenses (7,380) (421) (7,801)
-------------- -------- --------
Segment operating (loss)/profit (31) 78 47
Interest income 167 - 167
Interest expense - - -
============== ======== ========
Segment assets 3,935 231 4,166
Segment liabilities (2,430) (34) (2,464)
Purchases of non-current assets 313 103 416
============== ======== ========
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
2018 2018 2017 2017
UK (domicile) 3,466 1,547 3,288 1,278
USA 5,259 955 4,348 977
Other 476 - 550 -
9,201 2,502 8,186 2,255
======== ============ ======== ============
Revenues are allocated to the country in which the customer
resides. During both 2018 and 2017 no single customer accounted for
more than 10% of the Group's total revenues.
Notes to the financial statements (continued)
2. Profit per share
12 months 12 months
to to
30 June 30 June
2018 2017
GBP'000 GBP'000
Profit for the year attributable to equity shareholders 393 244
Total loss per share - basic and diluted
Basic 1.53 p 0.10 p
Diluted 1.53 p 0.10 p
Shares Shares
Weighted average number of shares in issue for
the year 25,523,845 25,612,338
Dilutive effect of options 100,000 -
----------- -----------
Weighted average shares for diluted earnings
per share 25,623,845 25,612,338
=========== ===========
Where a profit has been recorded but the average share price for
the year remains under the exercise price the existence of options
is not dilutive
3. Disposal of Equity Holdings Ltd and Equity Development Ltd
Following the failure of Bashco Limited to make any payments to
the Company for the acquisition of Equity Holdings Ltd and its
subsidiary Equity Developments Ltd, the Company decided that it was
not in its interests to take back the majority ownership of the
disposed companies. The companies were not within the Group's core
operations and disposal had been the correct decision. In order
that the option to take back the disposed companies should lapse it
was agreed between the parties that a payment be made by Bashco Ltd
to ADVFN Plc amounting to a cash payment of GBP50,000 plus the
issue to ADVFN Plc of shares amounting to a 30% stake in the
disposed companies (as announced on 9 March 2018). These payments
have now been received and the parties consider the transaction
complete. The Directors have considered whether they have
significant control over Equity Holdings as a result of this
shareholding and have decided that this is not the case. The
shareholding is therefore recognised as an available for sale
financial asset within investments on the balance sheet.
4. Events after the balance sheet date
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 2018 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 2018 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.
ENDS
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END
FR FKBDPPBDDFDK
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