RNS Number:7085O
ADVFN.COM PLC
14 December 2001
Release to Companies Announcement Office
Embargoed to: 12:30pm Friday 14 December 2001
ADVFN.COM PLC
Preliminary Statement for the year ended 30 June 2001
Chairman's Statement
Advfn is now the market-leading brand in online share information and is
recognised throughout the financial community. We have moved in two years from
an unknown service catering for a few hundred investors to one with hundreds
of thousands of registered users.
When we started Advfn we set ourselves several targets the most ambitious of
which was to become market leader in 3 years, achieving this within 18 months.
We have continued to create new tools and services to ever improve our service
offering, leaving the competition behind. Since the year-end Advfn has
introduced our real-time streaming technology, which has given our members the
most up to date price information at an extremely competitive rate. This has
been achieved by being a streamlined operation focused on keeping costs to the
minimum.
This coupling of low overheads and leading edge information provision
positions us well to continue to expand our offering and revenue bases. The
introduction of streaming technology allowed us to introduce new subscription
levels and services, which has broadened and strengthened our business model.
Subsequently in November of this year we were able to release a trading update
that reported both the number of subscribers and our subscription income had
exceeded our forecasts. In October our subscription income was up 67% since
the end of July 2001, with traffic and sign up rates continuing to exceed our
expectations.
It should be noted that having only really worked within the UK market to date
and with Advfn.fr only just reaching the end of its first stages of
development, we are aware that there is pent up demand for American share
information from our UK user base and we plan to introduce these services
shortly. As a side effect, this will open the biggest and yet untapped market
of all; America. Unlike traditional business, we have no product to ship, no
offices to open, no people to hire in order to dip our toe into this huge
market. We already have a contingent of US users on our site, checking UK
stocks, so the introduction of US prices is a tantalizing low risk prospect
for the future.
As the dust settles on the Internet boom and bust, we look forward to the
coming challenges. The future of world stock markets is now irreversibly
intertwined with that of the Internet and we are focused on ensuring that
ADVFN will transition from a pioneer into a stalwart of this developing
industry.
Michael J Hodges
Chairman
14 December 2001
Managing Director's Review
Operating Review 2001
ADVFN.com Plc has now become the leading on-line resource of financial
information for private investors in the United Kingdom.
Since our launch in December 1999, development has continued at a fast pace.
Stock markets worldwide have been in a bear trend since March 2000, but ADVFN
has managed to capitalise on these conditions by providing timely information.
ADVFN now dominates the supply of data to the Private Investor community.
From a small but loyal following of just 750 users in December 1999 we now
have over 330,000 registered users on our sites with approximately 4000 paying
subscribers.
August 2000 saw the launch of our initial 'level 2' data offering in the UK,
which was well received, and the rate of sign- ups exceeded our expectation.
In August 2001 (after the year end) we launched streaming services across our
websites, introduced new se3rvice levels and reviewed our pricing structures.
This was a crucial moment for ADVFN as it represented a culmination of
significant change in subscription levels, the introduction of a new and more
sophisticated offering and the integration of the UK-Invest site into ADVFN.
In November we were pleased to provide a trading update and reported that both
the number of subscribers and our subscription income had exceeded forecasts.
For example, in October 2001 ADVFN's subscription revenue cleared the
#1,000,000 a year run rate, up 67% since the end of July 2001.This substantial
increase underpins our continued belief that subscriptions from web services
is the correct business model. The level of subscriptions continues to grow
and this has been particularly noticeable during November and early December
when the 'Bulls' returned to the market.
Our advertising/page impression numbers also continued to exceed our
expectations. ABC audited figures for June 2001 show we delivered over 43
million page impressions. Advertising remains an important part of revenue
strategy and this has been building well now we have an in-house sales team.
ADVFN has proven itself as a powerful medium for advertisers, particularly in
financial services with most advertisers remaining as repeat customers. We are
encouraged by the future of advertising revenues.
Our other businesses namely advfn.fr (France), uk-invest.com and
freeserve.advfn.com (our Freeserve venture) have all produced increased
traffic, subscribers and importantly income. Success Events our
investor-training subsidiary continues to be the leader in its sector and is
highly profitable. Our full launch of 3DV8 and subsequent partnership
announcement mean that this venture is now generating income streams. Our list
of clients is impressive and shows that we are now an accepted technology.
Opportunities of becoming a data solutions provider to other companies such as
brokers, institutions and banks is now providing us with new revenue
generating gateways. We already supply a number of companies with level 1 and
level 2 data and we will be announcing further deals in due course.
Financial Websites
ADVFN.com
This is our flagship website and has now established itself as the No1
destination for investors seeking UK stock market data. With over 330,000
total registered subscribers and 4000 paying customers the site continues to
out perform our expectations. This leading website has been recognised by a
number of awards this year including, 'Best Private Investor Website' at
Shares UK 2001 awards, 'Best Overall Website' and 'Best Web-site Design' at
the Investors Chronicle UK Awards 2001 and recently 'Best Investment Site
Tools' at the Investors Week Online Finance Awards 2001. We were also runners
up or highly commended in a large number of other categories.
The launch of new streaming services during August 2001 has meant that we are
now able to increase our presentation and offering into new and more
sophisticated areas. We plan to add additional exchanges, indices and futures
data in due course to our websites, the first of which will be US stock data
early next year. This will open up new markets both in Europe and the US as
well as providing new subscription and advertising opportunities.
UK-invest.com
Since the year-end, ADVFN has acquired Uk-invest.com from the GlobalNet
Financial.com Inc Group, for a total consideration of #800,000. The principal
assets ADVFN acquired included: domain names, intellectual property and its
customer list, but excluded all liabilities. At the same time GlobalNet
subscribed for new ordinary shares in ADVFN for a cash consideration of
#700,000.
The acquisition of one of our main competitors was an important milestone for
the company, not only in the transfer of 172,000 new customers to our books,
but deriving substantial PR which has created new opportunities for us.
Freeserve.advfn.com
During July 2001 we signed a content partnership agreement with Freeserve, the
UK's largest internet business, to provide financial news and share price data
to their portal. Freeserve currently has approximately 2.1 million active
registered accounts, 4.5 million unique users and as of February 2001 recorded
297 million page impressions. This agreement has increased our reach within
the internet market place and we have already derived revenue from
subscriptions and advertising from this channel.
Advfn.fr
We launched our French site (ADVFN.fr) during 2001 and this has been well
received by both users and the French financial press. We have derived
considerable PR through our exposure on Bloomberg and in 'Les Echos' and this
in turn has led to good paid for user growth, We believe France has great
opportunities for us due to the maturity of its financial markets and its
cross border Euro based exchanges through Euronext.
New streaming services were successfully launched in France during November
2001 and this will further enhance our position in the market.
Success Events
Success Events Ltd continues to expand both its range of courses and its
turnover, contributing a healthy profit to the ADVFN Group. Its success lies
in its range of investment courses, their content and calibre of tutors. New
corporate courses have been launched and we have trained 'graduate trainees'
from a number of organisations.
During 2002 we will be embarking on a number of sponsored 'road shows' around
Britain which we believe will increase our exposure in the private investor
training market.
New Media
One of ADVFN's main advantages over its competitors is its technical
expertise. ADVFN uses the latest technology to deliver timely shares data by a
variety of media: Internet, Television and mobile. ADVFN remains Orange's
partner for the delivery of shares data to WAP-enabled handsets. Further
mobile services are due to be announced shortly. In June 2000 ADVFN launched
its interactive television services with Telewest and in September 2001
extended that successful relationship to broadband internet via Blueyonder.
Business Intelligence
It is not just the private investor and professional trader who needs timely
and relevant data. Businesses are also seeing the benefits of tracking not
only their positioning in their market, but that of their competitors and
clients. Using its existing technology and data, ADVFN supplies business
intelligence solutions to such companies as Friends Provident.
Investor Relations
Increasingly companies are seeing the benefit of and being required to supply
the most up to date information to investors and potential investors. ADVFN
specialises in real-time data and is perfectly placed to provide real-time
solutions to companies' investor relations sites. ADVFN have embarked on a
range of new products to address this marketplace. We have already signed up a
number of companies including the main flotations in 2001 namely Orange and
Friends Provident, and have ongoing talks with a number of other national
names.
Fundamental Data
As part of a commitment to produce unique content ourselves we formed a
fundamental data team in June 2000, which has been analysing company data.
This database is now complete and is in use by our website. New tools (such as
Filter X) will be released utilising this proprietary data. We also have the
opportunity to resell this data with other ADVFN products or to 3rd parties.
3DV8
3DV8 entered into its first partnership with SPSS.Inc. (Nasdaq: SPSS) to
develop visualisation data mining solutions. Under the terms of the
agreement, 3DV8 has agreed to develop visual workflow interfaces as integrated
add-on solutions to the SPSS flagship 'Clementine' product line. SPSS will
promote the 3DV8 product and company in its marketing materials, press
releases and trade events.
We were particularly honoured to be invited to the recent Intel Developers
Fall 2001 Forum held in San Jose, to demonstrate on behalf of Compaq their new
4.2Ghz desktop computer.
A number of new product lines were launched this year in a wide price range
from $250 to $7,500. We are launching our new top tier Enterprise ODBC
version in January and are pleased to announce that we have already secured a
forward order from Compuserve. This will add to our already growing customer
list, which includes Abbott Laboratories, Ross Laboratories, Compaq,
BTOpenworld, the US Army and Softlogic.
Prospects.
These year-end results are in line with our expectations and reflect our
continued product development and growing dominance within this important
financial sector. Since the year-end, through both prudent cost cutting and
revenue growth, we have moved significantly towards profitability and positive
cashflow, and are confident that we will cross this important threshold during
the next year. The sale of our competitor Interactive Investor to AMP and our
acquisition of UK-Invest, both since the year-end, now provide us with even
more opportunities to capitalise on our position.
We have achieved strong revenue growth throughout our history and this has
been during a time of almost unprecedented gloom both in the stock market,
technology and internet sectors. We see the future as holding great potential
for ADVFN as our service moves from being the vanguard of how people invest in
the markets, to ubiquity.
Michael Boydell
Managing Director
14 December 2001
For further information please contact:
Advfn.com Plc 020 7070 0947
Michael Boydell, Managing Director
Buchanan Communications 020 7466 5000
Jeremy Garcia
Consolidated Profit and Loss Account
for the year ended 30 June 2001
2001 2000
Notes #'000 #'000 #'000 #'000
Turnover
Continuing operations 796 118
Discontinued operations - 1,120
796 1,238
Cost of sales (10) (21)
Gross profit 786 1,217
Administrative expenses (2,467) (1,287)
Operating (loss)/profit
Continuing operations (1,681) (663)
Discontinued operations - 593
(1,681) (70)
Net interest 88 41
Loss on ordinary activities before (1,593) (29)
taxation
Tax on loss on ordinary activities 2 (2)
Loss on ordinary activities after (1,591) (31)
taxation
Loss per ordinary share 4 (0.64p) (0.016p)
There were no recognised gains or losses other than the loss for the financial
year.
Balance Sheets
at 30 June 2001
Group Group Company Company
2001 2000 2001 2000
Notes #'000 #'000 #'000 #'000
Fixed Assets
Intangible assets 266 335 - -
Tangible assets 2,159 1,023 1,810 1,014
Investments - - 355 350
2,425 1,358 2,165 1,364
Current Assets
Debtors 522 153 846 151
Cash at bank and in hand 462 3,246 374 3,227
984 3,399 1,220 3,378
Creditors: amounts falling due within
one year (730) (493) (661) (476)
Net current assets 254 2,906 559 2,902
Total assets less current liabilities 2,679 4,264 2,724 4,266
Creditors: amounts falling due after
more than one year (6) - (6) -
Net assets 2,673 4,264 2,718 4,266
Capital and Reserves
Called up share capital 2,505 2,505 2,505 2,505
Share premium account 2,336 2,336 2,336 2,336
Profit and loss account (2,168) (577) (2,123) (575)
Shareholders' funds - equity 5 2,673 4,264 2,718 4,266
The financial statements were approved by the Board of Directors on
14 December 2001
Consolidated Cash Flow Statement
for the year ended 30 June 2001
2001 2000
Notes #'000 #'000
Net cash outflow from
operating activities 6 (1,459) (147)
Returns on investment and
servicing of finance
Interest received 89 46
Interest paid (1) (5)
88 41
Corporation tax paid (7) -
Capital expenditure
Payments to acquire tangible fixed assets (1,420) (1,227)
Sale of tangible fixed assets - 166
(1,420) (1,061)
Acquisition
Purchase of subsidiary undertaking - (350)
Net cash outflow before financing (2,798) (1,517)
Financing
Issue of ordinary share capital - 4,792
Capital element of new finance leases and
hire purchase contracts 17 -
Capital element of finance leases and hire
purchase contracts repaid (3) (93)
Net cash inflow from financing 14 4,699
(Decrease)/increase in cash 7 (2,784) 3,182
Notes for the year ended 30 June 2001
1. General
The financial information herein does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985.
The financial information has been extracted from the group's 2001 statutory
financial statements upon which the auditors reported on 14 December 2001.
Their opinion is unqualified and does not include any statement under section
237 of the Companies Act 1985, but refers to the uncertainties surrounding the
ability of the Group to continue as a going concern (as described in note 2).
The accounts have been prepared in accordance with applicable accounting
standards and under the historical cost convention.
The principal accounting policies of the group have remained unchanged from
the previous annual report, except that Website development costs have been
treated as tangible fixed assets following the issue of UITF29 'Website
development costs'. They were previously treated as intangible fixed assets
and the comparatives have been restated accordingly.
Copies of the annual report are being posted to shareholders and copies will
be available from the company's registered office at Crown House, Linton Road,
Barking, Essex, IG11 8HJ.
2. Basis of preparing the financial statements
The company has incurred losses in the year, due mainly to costs associated
with developing the company's product range.
Since the year end, revenues have increased and development expenses have been
substantially reduced. Additionally, further funding has been raised (see note
3). ADVFN France has begun to generate revenue, albeit at a low level
initially, and negotiations are under way to enter into a licensing
arrangement to incorporate the 3DV8 product with that of a leading supplier of
software to financial markets.
The company meets its day to day working capital requirements through a
positive cash balance and has no agreed bank facilities at present. The
company's brokers have indicated that they may be able to raise further funds
through an issue of equity shares.
The nature of the company's business is such that there can be considerable
unpredictable variation in the timing of cash inflows. Bearing this in mind,
the directors' have prepared projected cash flow information for the period
ending 31 December 2002, that includes a requirement to raise further funds in
early 2002.
On the basis of this cash flow information and discussions with the company's
brokers the directors consider that the company will continue to operate
within the currently available funds including those from future fundraising.
However, the margin of facilities over requirements is not large and there can
be no certainty that an issue of equity shares would be successful. Inherently
there can be no certainty in relation to these matters. On this basis, the
directors consider it is appropriate to prepare the financial statements on
the going concern basis. The financial statements do not include any
adjustments that would result from the inability to raise the required
funding.
3. Post balance sheet events
On 30 July 2001 the company issued a further 37,500,000 ordinary shares of 1p
each at 4p per share in connection with the purchase of the "UK invest"
website. This also raised #700,000 in cash of which a net #200,000 was
available for working capital for the company.
On 30 August 2001, the company issued a further 4,600,000 ordinary shares of
1p each at 3.25p per share to provide further working capital of #150,000 for
the company.
4. Loss per ordinary share
2001 2000
Number Number
of Loss of Loss
Loss shares per Loss shares per
share share
#'000 '000 p #'000 '000 p
Loss for the year (1,591) (31)
Weighted average number of 250,504 194,006
shares
Loss per share 0.64p 0.016p
5. Reconciliation of movements in shareholders' funds
2001 2000
#'000 #'000
Loss for the financial year (1,591) (31)
Receipts from issues of shares - 4,792
Net (decrease)/increase in shareholders' funds (1,591) 4,761
Shareholders' funds at 1 July 4,264 (497)
Shareholders' funds at 30 June 2,673 4,264
6. Reconciliation of operating loss to net cash outflow from
operating activities
2001 2000
#'000 #'000
Operating loss (1,681) (70)
Amortisation 69 11
Depreciation 284 174
Profit on sale of tangible fixed assets - (8)
Decrease in stocks - 12
(Increase)/decrease in debtors (369) 86
Increase/(decrease) in creditors 238 (352)
Net cash outflow from operating activities (1,459) (147)
7. Reconciliation of net cash flow to movement in net funds
2001 2000
#'000 #'000
(Decrease)/increase in cash for the year (2,784) 3,182
Cash acquired on acquisition of subsidiary - 13
New finance leases and hire purchase agreements (17) -
Cash outflow from capital repayments of hire
purchase and finance lease agreements 3 93
Movement in net cash/(debt) in the year (2,798) 3,288
Net cash/(debt) at 1 July 3,246 (42)
Net cash at 30 June 448 3,246
8. Analysis of net cash
2001 2000
#'000 #'000
Cash at bank 462 3,246
Finance lease and hire purchase agreements (14) -
Total 448 3,246
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