Interim Results
April 27 2001 - 8:36AM
UK Regulatory
RNS Number:7642C
On-Line PLC
27 April 2001
Chairman's Statement
Results
It has been a positive six months, in which we have seen our turnover increase
as the companies within the group start to grow and establish themselves. We
have been able to bring into the group new talent, which is helping us build
on the success of last year. This investment has increased our administration
expenses and thus increased our costs for the period.
In my last report to you, I outlined our strategy going forward of building
businesses in technology, developing them to critical mass and then floating
them. This has several benefits: On-line capitalises the value of parts of
its business at an early stage, investors get a ground floor opportunity to
participate in the subsidiary's growth and the management of the new company
can be properly incentivised to deliver success resulting in direct
shareholder value.
Current Strategy
We plan to take the first steps towards this by floating our games division
Akaei Plc (formerly AAA Game) in the near future. We also have been exploring
options with strategic partners for ADVFN. We have made good progress on both,
even though we have been working in the worst stock market conditions for a
generation.
Meanwhile, On-line has been developing other projects to follow on from the
flotation of Akaei Plc and is very positive about the futures for AdvertWizard
Ltd and Avantnoise Ltd. Once Akaei Plc is floated we will begin a new project
so that our pipeline of businesses is maintained at 3 ongoing developments.
Underpinning our strategy has been the performance of ADVFN, which has become
the market leading online financial site in the year since its flotation. This
confirms that we not only develop businesses that can be floated but also ones
that can execute on their promise. We are particularly proud of this.
While we have weathered the current market storm we look forward to more
positive times ahead, where we feel our strategy will prove yet more
effective.
Advfn.com plc (http://www.advfn.com)
ADVFN.COM was our first business to float and it has weathered the market
turbulence well, maintaining as I write the bulk of its initial flotation
price.
Its position as the number one financial website in the UK was recognised by
the award of Best Private Investor Website at the recent Shares UK 2001
awards. Its user base continues to grow as does the list of new features
added to the site on a regular basis, including the unique Level 2 share
information offering and free unlimited real-time service. ADVFN has achieved
far more than we could have ever hoped for in its first year.
You can now access ADVFN not only via the Internet but also via your mobile
phone or TV, keeping ADVFN at the leading edge of technology. ADVFN has opened
an office in Paris and now is providing financial information to the French
market. ADVFN has partnered with some very strong organisations such as the
LSE, Orange, Telewest and the IG Group. Coupled with this and its growth of
usage and revenue, we are very excited about ADVFN's future as not only number
one in the UK but in the future other markets too.
On-line PLC owns 76% of ADVFN, and this shareholding has been worth more than
the whole market capitalisation of On-line since the moment it was floated.
We have puzzled about this situation and believe that it is caused as it is
considered that the flotation of ADVFN is a 'one off' and that On-line will
not release the value tied up in ADVFN. We are working to correct this
misconception.
Akaei Plc (formerly AAA game) (http://www.akaei.com)
It is intended to establish AKAEI as one of the leading European software
brands using established expertise within AKAEI and by bringing in new talent.
We believe the flotation will accelerate this process by not only providing
more financial resources but also by raising the AKAEI's profile within the
industry.
An increased profile should aid licensing negotiations while recruitment of
development talent will also be enhanced by the ability of AKAEI to offer
share-based incentives.
Quoted shares should also aid acquisitions of both development and
distribution companies.
AKAEI will continue to concentrate on the traditional retail boxed games
business, and in that area the third edition of Giant Killers is about to be
released on the PC CD-ROM format and in addition a Sega Dreamcast version has
just been completed and will be published during the second quarter of 2001.
We are also working on an innovative sports game, Aussie Rules Coach, about
which we are extremely excited as we believe it will be the most original
sports game in years.
In addition to the traditional boxed game business, we plan to lengthen
product life and increase games' appeal by widening our audience on wireless
and Internet platforms. We believe that wireless is an important new format
and also that the Internet offers the opportunity to inform, harness and sell
directly to a worldwide audience. The Company is positioned to take advantage
of the opportunities that will be generated by both new games platforms and
the convergence of the net and wireless, which we believe will broaden the
market yet further into the mainstream.
AdvertWizard (http://www.advertwizard.com)
AdvertWizard is a website promotion platform that makes online advertising
easy, instant and effective for businesses of any size. Its fully automated
system enables anyone to earn cash and gain free advertising from their sites
or buy targeted advertising campaigns. All sites, banners and campaigns are
managed online through an individual account, with instant results and
real-time reports.
It is now live and in open test and, as we did with ADVFN, we are now talking
to its customers and adapting and adding new features to make sure
AdvertWizard does what its customers require.
Avantnoise (http://www.avantnoise.com
Avantnoise is a music publishing and distribution platform positioned to
exploit the dramatic changes brought on the music industry by digital
distribution.
Musicians of any style or genre can sell their work through Avantnoise without
any creative, financial or human barriers. Unlike other systems, Avantnoise
creates an end-to-end digital environment, with full e-commerce facilities to
match bands with fans.
This is the MP3 revolution with a business model. In this way, artists can
gain an instant global presence, communicate directly with their fans, and
generate income from their music without retailers, distributors and
manufacturers taking a share. We are an ethical music website offering
openness, control, security and freedom to artists and a whole world of new
and exciting music for all listeners.
Avantnoise has just gone into open beta testing and has so far signed nearly
300 artists and has over 1000 music tracks available.
9to5Cafe (http://www.9to5cafe.com)
We continue to operate 9to5cafe but have curtailed its development. We
continue to let its user base develop while we concentrate on other areas.
Prospects
We invite you to check out our sites and see for yourselves what the future of
On-line PLC is looking like. Meanwhile you can join ADVFN and track our
progress and that of your portfolio there. We value this transparency and
encourage your feedback.
I hope this gives you a clear picture of where On-line PLC is going and
provides you with more than a glimpse of what we are convinced is an
attractive and exciting future.
I would like to take this opportunity to thank our staff for their superb
input, which has helped us develop, and thank our shareholders for supporting
us.
MICHAEL HODGES
Chairman
ON-LINE PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2000 1999 2000
Unaudited Unaudited Audited
#'000 #'000 #'000
Turnover 1,334 374 748
Cost of sales (458) (22) (86)
__________ __________ __________
Gross profit 876 352 662
Administrative expenses (2,010) (500) (1,557)
__________ __________ __________
Operating loss (1,134) (148) (895)
Exceptional item: profit on part disposal - - 3,402
of subsidiary
Net interest 65 5 69
__________ __________ __________
Profit / (loss) on ordinary activities (1,069) (143) 2,576
before taxation
Tax on profit / (loss) on ordinary - - (2)
activities
__________ __________ __________
Profit / (loss) on ordinary activities (1,069) (143) 2,574
after taxation
Minority interest 166 - 2
__________ __________ __________
Profit retained / (loss sustained) for (903) (143) 2,576
the period
__________ __________ __________
Earnings / (loss) per ordinary share
Basic (17.3p) (3.3p) 55.4p
Diluted (17.3p) (3.3p) 55.1p
There were no recognised gains or losses other than the result for the
financial period.
Notes to the Interim Statement
1. The calculation of loss per share is based on the loss on ordinary
activities after taxation divided by the weighted average number of
shares in issue for the period which was 5,210,000 (4,270,000 in the six
months ended 31 December 1999 and 4,648,000 in the year ended 30 June
2000).
2. The directors do not recommend the payment of an interim dividend.
3. The financial information contained in this document does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act
1985. The financial information for the year ended 30 June 2000 is
extracted from the audited financial statements for that period on which
the auditors gave an unqualified report. A copy of those financial
statements has been filed with the Registrar of Companies.
4. Copies of this statement are being posted to shareholders and will be
available from the company's registered office at Crown House, Linton
Road, Barking, Essex, IG11 8HJ for the next 14 days.
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