Final Results

RNS Number : 8259R

On-Line PLC

10 November 2011

 



10 November 2011

On-line PLC

('On-line' or 'the Company')

Preliminary Results for the Year Ended 30 June 2011

On-line today announces preliminary results for the year ended 30 June 2011.

For further information, please contact:

On-line PLC

Michael Hodges, Chairman and Managing Director

Francesca De Franco, PR                                                                                                                           020 7070 0932

Grant Thornton Corporate Finance (Nominated Adviser)

Gerry Beaney                                                                                                                                              020 7383 5100

On-line PLC

Chairman's Statement

2010 - 2011 has been good for us and carried on in the same vein as the year before.

Our turnover for the year was GBP160,000 (2010: GBP120,000) giving us a profit before tax of GBP3,000 (2010: Profit of GBP10,000).

It has been another successful year for our investment, ADVFN, which has continued to grow and the performance for the year is summarised below:

ADVFN plc

ADVFN has continued with its strategy which has seen it make good progress.

Its highlights below, as extracted from its published financial statements, show the progress made:

ADVFN has had another strong year with turnover up 7% to £9,167,000. 2011 has been a pivotal year where we have begun the next phase of growth outside the UK.

We have made very good progress this year against a background which could hardly be described as easy. Our product and geographical diversity has served us well so that we have avoided many of the challenges other media players have had to contend with.

Subscriptions have been robust and advertising income has led our growth. The advertising lead growth is a vanguard of growth as it accelerates the broadening of our business to important new markets

Having strong sites in the UK, US and Brazil, we believe we have the necessary template now to expand into the emerging markets where audiences are vibrant and huge. Our strategy is to penetrate markets via sales offices, using advertising income to fund growth in the territories that warrant it most.

In line with this we have been opening regional sales offices in Japan, India and the Middle East and we have been focusing on expanding in these territories. This process is delivering the platform for growth in the coming years leveraging the considerable investment we have made over the last 10 years.

All sites have performed robustly against a backdrop of global financial uncertainty. The UK continues to prosper, Brazil has remained strong and continues to develop and the US continues to grow for our ADVFN and Investors Hub brands. We feel very positive about next year's prospects whatever the outcome of the markets and expect to see further progress even in the teeth of another crash.

Strategy

We are building out the business for the next phase of ADVFN's development which we see as taking us towards sales of £20,000,000 a year.

This year is another year of growth; a yearly goal we have achieved every year for the last 11 years.

The market opportunity for us in India, The Middle East, Mexico and the Philippines is large and involves a modest level of investment. The bulk of our platform for entering such large markets is already made so that each new office is a small measured risk. We expect each territory to come on stream in a 12 month set up window and to be quickly income generative thereafter.

Exposure to fast growing economies with active markets is the way forward for us, taking positive developments in each market and feeding them back into our global offering.

The size of the opportunity is sufficiently large to keep us very busy for a long time to come.

Financial overview

Our turnover has increased to £160K (2010: £120K) however, our operating profit is down 77% to £3K (2010: £13K). 

Financial performance

Key financial performance for the year has been analysed as follows:

	Year to 30 June 2011	Year to 30 June 2010	Change	Change
	£'000	£'000	£'000	%
Turnover	160	120	40	33
Operating profit	3	13	(10)	(77)
Profit/(loss) per share	0.04p	0.13p	(0.09p)	(69)

Summary of key performance indicators of our investment, ADVFN plc

The directors have monitored the progress of the overall company strategy and the individual strategic elements by reference to certain financial and non-financial key performance indicators. These are based on indicators from the investment in ADVFN Plc.

	2011 Actual	2011 Target	2010 Actual	2010 Target
Average head count	54	60	46	50
ADVFN registered users	2.2M	2.1M	2.0M	1.9M

Strategy

We intend to carry on working with ADVFN to help them develop and build on their success 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's 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 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 investments 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

9 November 2011

Profit and Loss Account for the year ended 30 June 2011

		2011	2010
		£'000	£'000
Turnover		160	120
Administrative expenses		(157)	(107)
Operating profit		3	13
Realised loss on investments		-	(3)
Profit on ordinary activities before taxation		3	10
Tax on profit on ordinary activities		-	-
Profit on ordinary activities after taxation		3	10
Basic profit per ordinary share		0.04p	0.13p
Diluted profit per ordinary share		0.04p	0.12p

Balance Sheet at 30 June 2011

			2011		2010
			£'000		£'000
Fixed assets
Investments			868		868
Current assets
Debtors			81		78
Cash at bank and in hand			1		5
			82		83
Creditors: amounts falling due within one year			(50)		(61)
Net current assets			32		22
Total assets less current liabilities			900		890
Capital and reserves
Called up share capital			3,242		3,242
Share premium account			2,205		2,205
Option valuation reserve			24		17
Profit and loss account			(4,571)		(4,574)
Shareholders' funds			900		890

Cash Flow Statement

for the year ended 30 June 2011

			2011		2010
			£'000		£'000
Net cash (outflow)/inflow from operating activities			(4)		2
(Decrease)/increase in cash			(4)		2

Notes

1. Earnings per share

		2011			2010
		Number of	Earnings		Number of	Loss
	Profit	shares	per share	Profit	shares	per share
	£'000	'000	p	£'000	'000	p
Basic earnings per share
Profit for the year	3			10
Weighted average number of shares		7,662			7,662
Basic earnings per share			0.04p			0.13p
Diluted earnings per share
Profit for the year	3			10
Weighted average number of shares		7,662			7,662
Dilutive effect of options		513			550
Weighted average number of shares of diluted earnings per share		8,175			8,212
Diluted earnings per share			0.04p			0.12p

2. Reconciliation of movements in shareholders' funds

			2011	2010
			£'000	£'000
Profit for the financial year			3	10
Recognition of equity settled share based payments in the year (FRS20)			7	-
Net increase in shareholders' funds in the year			10	10
Shareholders' funds at 1 July 2010			890	880
Shareholders' funds at 30 June 2011			900	890

3. Reconciliation of operating profit to net cash (outflow)/inflow from operating activities

			2011	2010
			£’000	£’000
Operating profit Equity settled share based payments in the year			3 7	13 -
Increase in debtors			(3)	(16)
(Decrease)/increase in creditors			(11)	5
Net cash (outflow)/inflow from operating activities			(4)	2

4. Reconciliation of net cash flow to movement in net funds

	2011	2010
	£'000	£'000
Increase/(decrease) in cash for the year	(4)	2
Net funds at 1 July 2010	5	3
Net funds at 30 June 2011	1	5

5. Analysis of movement in net funds

			At     1 July 2010	Cash flow	At 30 June 2011
			£'000	£'000	£'000
Cash in hand and at bank			5	(4)	1

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 2011 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Company's 2011 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.

 

END

 

 

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