TIDMONL
RNS Number : 0946W
On-Line PLC
09 November 2017
For immediate release
9 November 2017
On-line plc
('On-line' or 'the Company')
Preliminary Results for the Year Ended 30 June 2017
The Board of On-line is pleased today to announce its
preliminary 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:
www.on-line.co.uk.
Extracts from the Annual Report and Accounts 2017 are set out
below.
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
For further information, please contact:
Michael Hodges
Chairman and Managing Director
Email: mikeh@advfn.com
Roland Cornish/Michael Cornish
Beaumont Cornish Limited (Nominated Adviser)
Tel: 0207 628 3396
Email: corpfin@b-cornish.co.uk
Chairman's Statement
On-line plc (On-line) remained steady over the past 12 months,
we have worked with ADVFN plc (ADVFN) of which we have a holding of
17.98%. On-line is the largest shareholder and the Company works
closely with ADVFN to ensure its success, which the Directors of
the Company hope will, in time, be of great benefit to shareholders
as ADVFN makes progress in the financial data market. We intend to
carry this on but now the time is right for us to begin developing
new opportunities. Blockchain is an exciting area. As announced on
the 26th of October we intend to change the company's name to
On-line Blockchain Plc.
We have worked as an incubator and investor in internet and
information businesses and the Company is always on the look out
for places to apply its long-established expertise. The Company has
been focusing for some time on blockchain technology where
On-line's links with ADVFN provide an opportunity for both, with
ADVFN offering instant access to a huge audience and On-line's
blockchain platform offers it an opportunity to broaden its
monetisation. On-line Blockchain's development will initially
dovetail into the ADVFN audience, offering both companies revenue
streams and On-line Blockchain a reference site for its
platform.
Shareholders should note that the while the Company has
identified the initial product, the Company's development of a
blockchain product is still at an early stage of development, and
its current plans envisage that the first application will be
tested early in 2018.
The Company's turnover for the year was GBP98,000 (2016:
GBP85,000) giving a profit before tax of GBP18,000 (2016: profit of
GBP12,000).
The Company's financial performance for the year and Key
Performance Indicators are analysed in the Strategic Report.
EXTRACT FROM THE ADVFN plc CHIEF EXECUTIVE'S REPORT
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.
EXTRACT FROM THE ADVFN plc STRATEGIC REPORT
Summary of key performance indicators
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.
On-line Plc's Strategic Report
The strategy for the Company remains that of an incubator and
investor, currently the single investment held by the Company is
that of a holding of 17.98% in ADVFN plc.
As an incubator and investor in internet and information
businesses On-line plc is always looking for further opportunities
and should they 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 can provide 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. The results in the
extract above demonstrate a steadily improving performance in ADVFN
and control of costs continues to support a better bottom line.
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. The 'Brexit' negotiations have created a noticeable air
of uncertainty in the markets and whilst the US Dollar and Euro
exchange rates have improved since the aftermath of the referendum
there is still a lack of confidence and a risk of volatility.
High proportion of fixed overheads
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
should they prove necessary, cost saving exercises will be
implemented.
Performance
The performance of the Company is reliant on the performance of
ADVFN plc. The Company supplies management services and makes
advertising recharges to 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.
The following financial KPIs may prove helpful:
2017 2017 2016 2016
Actual Target Actual Target
----------------------------- ------- ------- ------- -------
Turnover (GBP'000) 98 90 85 85
------- ------- -------
Operating results (GBP'000) 18 12 12 0
----------------------------- ------- ------- ------- -------
Earnings/(loss) per
share (pence) 0.24 p 0.16 p 0.16 p 0.00p
----------------------------- ------- ------- ------- -------
Financial KPIs
The financial indicators are designed to offer a dashboard check
of the significant measures of the company's operations. The
turnover has reached the gradually increasing target whilst the
operating results and EPS demonstrate that costs are being
controlled and profits earned.
The company does not currently monitor non-financial KPI's and
will do so when they can offer additional clarity to the financial
performance measures.
Operating costs
Our costs remain reasonably fixed and predictable and we do not
see that changing in the immediate future. They are firmly under
control and we hope this will allow the generation of profits in
the future.
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. We have a
very small foot print and try to reduce any waste we create; we are
a small team which makes this task easier. Most of our
communications are electronic which again cuts our use of
non-environmentally friendly products.
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
9 November 2017
Statement of Comprehensive Income
2017 2016
GBP'000 GBP'000
Revenue 98 85
Administrative expenses (78) (73)
--------------- ---------------
Operating profit/(loss) 20 12
Interest payable (2) -
--------------- ---------------
Profit/(loss) before taxation 18 12
Taxation - -
--------------- ---------------
Profit/(loss) and total comprehensive
income for the year attributable to
shareholders of the parent 18 12
=============== ===============
Basic profit/(loss) per ordinary share 1 0.24 p 0.16 p
Diluted profit/(loss) per ordinary
share 1 0.24 p 0.15 p
Statement of Financial Position at 30 June 2017
2017 2016
GBP'000 GBP'000
Non-current assets
Investments 868 868
------- ----------
868 868
Current assets
Trade and other receivables 125 159
Cash and cash equivalents 2 -
------- ----------
127 159
------- ----------
Total assets 995 1,027
======= ==========
Equity and liabilities
Equity
Issued share capital 3,242 3,242
Share premium account 2,205 2,205
Share based payment reserve 36 36
Profit and loss account (4,525) (4,543)
------- ----------
Total shareholders' funds 958 940
Current liabilities
Trade and other payables 37 32
Borrowings (bank overdraft) - 55
------- ----------
37 87
------- ----------
Total assets less current
liabilities 995 1,027
======= ==========
Statement of Changes in Equity
Share based
Share Share premium payment Retained Total
capital account reserve earnings equity
At 1 July 2015 3,242 2,205 35 (4,555) 927
Transactions with owners:
Equity settled share options - - 1 - 1
Total comprehensive income
for the year - - - 12 12
-------- ------------- ----------- ------------ ----------
At 30 June 2016 3,242 2,205 36 (4,543) 940
Total comprehensive income
for the year - - - 18 18
-------- ------------- ----------- ------------ ----------
3,242 2,205 36 (4,525) 958
======== ============= =========== ============ ==========
Statement of Cashflows
2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the period before
tax 18 12
Share based payments - 1
Decrease/(increase) in trade and other
receivables 34 (79)
Increase/(decrease) in trade and other
payables 5 (13)
--------------- ---------------
Net cash generated/(used) by operating
activities 57 (79)
--------------- ---------------
Increase/(decrease) in cash and cash
equivalents 57 (79)
Cash and cash equivalents at the start
of the period (55) 24
--------------- ---------------
Cash and cash equivalents at the end
of the period 2 (55)
=============== ===============
1. Earnings per share
2017 2016
Loss Number Earnings Loss Number Earnings
of of
shares per share shares per share
GBP'000 '000 p GBP'000 '000 p
Basic earnings per
share
Profit/(loss) for the
year 18 12
------- -------
Weighted average number
of shares 7,662 7,662
--------- ------
Basic earnings/(loss)
per share 0.24 p 0.16 p
--------- ---------
Diluted earnings per
share
Dilution of shares - 129
--------- ------
Weighted average number
of shares 7,662 7,791
--------- ------
Diluted earnings/(loss)
per share 0.24 p 0.15 p
--------- ---------
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 at 30 June 2017.
2. 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 statement of financial position at 30 June 2017 and the
income statement, statement of changes in equity, the statement of
cashflows 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.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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