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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November 09, 2017 10:53 ET (15:53 GMT)

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