TIDMONL
RNS Number : 9829S
On-Line PLC
13 November 2013
13 November 2013
('On-line' or 'the Company')
Preliminary Results for the Year Ended 30 June 2013
On-line today announces preliminary results for the year ended
30 June 2013.
For further information, please contact:
Michael Hodges
Chairman and Managing Director mikeh@advfn.com
Salmaan Khawaja / Edward Thomas
Grant Thornton, UK LLP (Nominated Adviser) 020 7383 5100
Chairman's Statement
On-Line has continued to work with ADVFN as it makes progress in
the financial data market. Our turnover for the year was GBP91,000
(2012: GBP160,000) giving us a loss before tax of GBP11,000 (2012:
profit of GBP23,000).
Summary of key performance indicators of the Company
The Company's financial performance for the year has been
analysed as follows:
Year to Year to
30 June 2013 30 June 2012
------------------------ ------------- -------------
GBP'000 GBP'000
------------------------ ------------- -------------
Turnover 91 160
------------------------ ------------- -------------
Operating (loss)/profit (10) 23
------------------------ ------------- -------------
Earnings per share (0.14)p 0.30p
------------------------ ------------- -------------
ADVFN plc
On-line is the largest shareholder in ADVFN, we work closely
together to make ADVFN a success, which in time will be of great
benefit to us. ADVFN has made progress and has remained strong
during this financial crisis. Its performance for the year is
detailed below.
Extract from ADVFN's 2013 accounts:
"HIGHLIGHTS
-- EBITDA profit for continuing operations of GBP108,000 (2012: loss of GBP362,000)
-- Loss for the period of GBP539,000 (2012: loss of GBP1,676,000)
-- ADVFN's registered user base continues to grow and is now over 2,800,000 (2012: 2,600,000)
CHIEF EXECUTIVE'S STATEMENT
This financial year has been a significant success with the
company turning in an EBITDA profit of GBP108,000 against an EBITDA
loss of GBP362,000 in 2012.
The operating loss was improved by GBP568,000 from a loss of
GBP1,439,000 in 2012 to GBP871,000 this year.
This has reflected in little change in our cash, which rose to
GBP1,461,000 at the year end from GBP1,440,000 with sales broadly
in line with last year at GBP8,077,000 down from GBP8,485,000
adjusted for discontinued businesses.
The global backdrop to our efforts has not been favourable but
we have been able to adjust well because the international spread
of our business gives us a robust platform even in these
economically fragile times.
For example our US business has made up for weakness in other
territories. The US economy is on the mend while our countries such
as Brazil which have been historically strong are now suffering
their own retrenchment.
Over the last year we have continued to shift our focus into
international markets building out using our US model as a
template.
We are making particular progress in Mexico, Japan and the
Philippines. Meanwhile our US properties continue to deliver and
show much promise.
Historically ADVFN's business has developed in bursts that end
in plateaus. Over the last ten years or so this cycle has repeated
every few years while the business has grown at a tremendous rate.
The last couple of years have been such a plateau but we think we
have a good chance to enter the next growth phase. To accelerate
this we have set out to acquire established websites with investor
communities, the first being Finance Manila. These new communities
will then become the platforms on which to build larger sites,
reproducing the template of our success in the US.
It would be nice to have equity markets back in fashion but we
are confident that we can grow in markets even if they remain at
historically low levels of investor activity.
While on the surface there is not much to report, the
significant changes in our financial performance attests to major
adaptations to a changing marketplace.
Our cost base is lighter and has shifted to focus more on new
markets. Our initial forays into mobile, Events, newsletters and
e-books have met with initial success and we have moved to begin
actively acquiring new investor communities.
As such we feel 2013-2014 should be another solid year and a
step towards our long term goal of building a much larger
business.
Financial overview
These accounts have been prepared under International Financial
Reporting Standards (IFRS) as adopted by the European Union.
This year's results show a significant improvement with EBITDA
showing a GBP108,000 profit and improvement of GBP470,000 from last
year's loss.
The result after tax, which includes GBP1,310,000 of non-cash
items, was a loss of GBP539,000, an improvement of GBP1,137,000
against a loss in 2012 of GBP1,676,000.
During the year we have taken a robust position on costs which
has given us the liquidity to continue to invest in R&D,
international markets and acquisition.
Strategy
Strategies are by definition "long term". Since day one back in
1999, we have seen ADVFN as an international offering and this
continues to be our driving vision.
We are, as I write, according to Amazon's Alexa, ranked 510th
largest website in the UK, 741 in the US, 828 in Brazil, 970 in
Canada, 563 in Norway and so on. I would encourage shareholders to
use Alexa to compare us to other well-known and valuable properties
to gauge how well we are doing. We think you will be impressed with
the company we keep.
A global audience gives us a robustness that means when
conditions are weak in one country; another in a rally will
compensate for it. This has helped insulate us from some very harsh
economic times.
We have done well in the US and we hope to use this experience
as a template to drive new territories and are using this
experience to acquire and embed websites like Finance Manila into
ADVFN.
Communities are the heart of the internet and we see an
opportunity to embrace share trading communities around the world
through acquisition and joint venture. With our premium content and
advertising skills, over a period of time we can boost the
monetisation of these properties.
Communities can be resistant to change so to protect the value
of the community this process takes time, however, we have
succeeded with Investors Hub in making this transformation.
If we can reproduce our success with Investors Hub in the US in
other territories, which must be stressed was not overnight, then
we will have a clear path to grow our business to the next level of
scale.
Meanwhile mobile is making an increasing impact on online usage
and we have been navigating this change with our popular mobile
offering. This is still a fledgling market but we are well
positioned in it with our iPhone and android versions of ADVFN. It
is positive news that Google is making progress with its sales of
mobile advertising as we are fast developing significant
advertising inventory on the mobile format, one which is at an
early stage of monetisation.
These apps alongside the website also address the growing tablet
market, so we are already well positioned for developments in this
important trend.
Our mobile platforms are also important as part of our
international strategy as many markets have heavy mobile
penetration where internet access via handsets has pre-empted
desktop penetration".
On-line Plc
Strategy
We will continue to work with ADVFN to help them develop and
build the business while at the same time looking for new
investment opportunities that the company might benefit from.
Operating costs
Our costs remain reasonably fixed and predictable and we do not
see that changing in the immediate 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.
Future developments for the business
We feel it is right for us to work with our investment and
assist in their growth. This has seen them increase their business
and allow new areas to be explored.
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.
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 current 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.
High proportion of fixed overheads and variable revenues
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 cost
saving exercises would be implemented should there be an
anticipated decline in revenues.
Michael Hodges
Chairman
13 November 2013
Profit and Loss Account
for the year ended 30 June 2013
Notes 2013 2012
GBP'000 GBP'000
Turnover 91 160
Administrative expenses (101) (137)
--------------------- ---------------
Operating (loss)/profit (10) 23
Interest payable (1) -
--------------------- ---------------
(Loss)/profit on ordinary activities
before taxation (11) 23
Tax on (loss)/profit on ordinary activities - -
--------------------- ---------------
(Loss)/ profit on ordinary activities
after taxation (11) 23
===================== ===============
Basic (loss)/earnings per ordinary
share 1 (0.14)p 0.30p
Diluted (loss)/earnings per ordinary
share 1 (0.14)p 0.29p
All operations are continuing.
There were no recognised gains or losses other than the loss or
profit for the year.
Balance Sheet
at 30 June 2013
2013 2012
Notes GBP'000 GBP'000
Fixed assets
Investments 868 868
Current assets
Debtors 121 149
Cash at bank and in hand - -
---------- ----------
121 149
Creditors: amounts falling due
within one year (64) (87)
---------- ----------
Net current assets 57 62
---------- ----------
Total assets less current liabilities 925 930
========== ==========
Capital and reserves
Called up share capital 3,242 3,242
Share premium account 2,205 2,205
Option valuation reserve 37 31
Profit and loss account (4,559) (4,548)
Shareholders' funds 2 925 930
========== ==========
Cash Flow Statement
for the year ended 30 June 2013
2013 2012
Notes GBP'000 GBP'000
Net cash inflow/(outflow) from operating
activities 3 15 (51)
Increase/(decrease) in cash 15 (51)
(Bank overdraft)/cash balance at the
beginning of the period (50) 1
--------- ----------
Bank overdraft at the end of the period 4, 5 (35) (50)
========= ==========
2013 2012
GBP'000 GBP'000
Cash at bank and in hand - -
Bank overdraft (35) (50)
--------- ----------
Bank overdraft at the end of the
period 5 (35) (50)
========= ==========
1. (Loss)/earnings per share
2013 2012
Profit Number Earnings Profit Number Earnings
of of
shares per share shares per share
GBP'000 '000 p GBP'000 '000 p
Basic (loss)/earnings
per share
(Loss)/profit for the
year (11) 23
------- -------
Weighted average number
of shares 7,662 7,662
--------- ---------
Basic (loss)/earnings
per share (0.14)p 0.30p
--------- ---------
Diluted (loss)/earnings
per share
(Loss)/profit for the
year (11) 23
------- -------
Weighted average number
of shares 7,662 7,662
Dilutive effect of
options 68 245
--------- ---------
Weighted average number
of shares of diluted
earnings per share 7,730 7,907
--------- ---------
Diluted (loss)/earnings
per share (0.14)p 0.29p
--------- ---------
The calculation for the diluted earnings per share is provided
for reference only. Where a loss is made in the year the impact of
the exercise of share options is not dilutive.
2. Reconciliation of movements in shareholders' funds
2013 2012
GBP'000 GBP'000
(Loss)/profit for the financial
year (11) 23
Recognition of equity settled share
based payments in the year (FRS20) 6 7
------- -------
Net (decrease)/increase in shareholders'
funds in the year (5) 30
Shareholders' funds at 1 July 930 900
------- -------
Shareholders' funds at 30 June 925 930
======= =======
3. Reconciliation of operating (loss)/profit to net cash
inflow/(outflow) from operating activities
2013 2012
GBP'000 GBP'000
Operating (loss)/profit (11) 23
Equity settled share based payments
in the year 6 7
Decrease/(increase) in debtors 28 (68)
Decrease in creditors (8) (13)
------- -------
Net cash inflow/(outflow) from
operating activities 15 (51)
======= =======
Notes to the Financial Statements
for the year ended 30 June 2013
4. Reconciliation of net cash flow to movement in net funds
2013 2012
GBP'000 GBP'000
Increase /(decrease) in cash for the year 15 (51)
Net funds at 1 July (50) 1
--------- ---------
Net funds at 30 June (35) (50)
========= =========
5. Analysis of movement in net funds
At At
1 July 30 June
2012 Cash flow 2013
GBP'000 GBP'000 GBP'000
Cash in hand and
at bank (50) 15 (35)
============== ============ ==============
6. 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 balance sheet at 30 June 2013 and the profit and loss
account, cash flow statement and associated notes for the year then
ended have been extracted from the Company's 2013 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.on-line.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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