Prelim Results for the Year Ended 30 June 2015

RNS Number : 5808F

On-Line PLC

12 November 2015

 

12 November 2015

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

Preliminary Results for the Year Ended 30 June 2015

On-line today announces preliminary results for the year ended 30 June 2015.

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.

For further information, please contact:

Michael Hodges

Chairman and Managing Director                     

[e-mail]

Salmaan Khawaja/ Jen Clarke/ Jamie Barklem  

Grant Thornton UK LLP (Nominated Adviser)

0207 383 5100

Chairman's Statement

On-Line plc continues in its role of an investment company whose sole investment is that of a holding of 18.26% in ADVFN plc. The Company has continued to work with ADVFN as it makes progress in the financial data market. Our turnover for the year was £94,000 (2014: £78,000) giving us a loss before tax of £4,000 (2014: loss of £9,000). 

The Company's financial performance for the year and Key Performance Indicators are analysed in the Strategic Report.

On-line is the largest shareholder in ADVFN, the Company works closely with ADVFN to ensure its success, which in time will be of great benefit to us.

Extracts from ADVFN's 2015 accounts:

ADVFN plc

Below are some high lights from the ADVFN's Chief Executives statement:

2015 was a solid year with sales broadly in line with last year at £9,297,000 (2014: £9,702,000). Losses were £1,560,000 (2014: £454,000) an outcome significantly exacerbated by our difficult and costly defence of the illegal action of a particular shadowy group of share holders at the beginning of the year who were seeking to take control of the ADVFN board (the "Requisitioning Shareholders").

This was a major distraction and the situation was resolved by the FCA this summer, very much to our relief.

Meanwhile we worked with our advisers on a potential acquisition of London South East Limited, a UK financial website and provider of stock data, with an eye to combine the business and talents with ADVFN. Since the end of the financial year, this deal has fallen into abeyance. Market conditions and changes in the VCT rules have meant the market currently has little appetite to finance this kind of deal but both parties have left the door open for working together in the future.

We have been focusing very keenly on reducing costs. Historically we have focused on growth opportunities and this has been the strategy for well over a decade. However we have decided to deviate from that path and instead shift our focus to cash flows and profitability. The initial phase of this was underway in the lead up to the year end and has continued beyond and by the end of the calendar year we will have refocused our efforts into optimising our businesses in the UK, US, Brazil. We will still enjoy significant traffic and revenues from the Rest of the World (ROW) but our focus in the medium term will not be investing material resources beyond those core territories.

The bear market that kicked off around spring time in the markets has created flashes of growth, especially in Brazil and it is likely that if the market continues to become more volatile, we will benefit from an increased level of interest this creates. Whilst seemingly counterintuitive, very bad markets are good for us and like our advertising clients, quiet markets are poor for us, while fast markets are excellent. It seems likely that volatility will increase.

EXTRACT FROM THE ADVFN STRATEGIC REPORT

Summary of key performance indicators

	2015	2015	2014	2014
	Actual	Target	Actual	Target
Turnover	£9.3M	£9 - £10M	£9.7M	£9 - £10M
Average head count	53	53	43	44
ADVFN registered users	3.2M	3.1M	3.0M	2.9M

On-Line plc's Strategic Report

The strategy for the Company remains that of an investment company and currently the single investment held by the Company is that of a holding of 18.26% in ADVFN plc.

As an investment company On-line plc is always looking for further investment opportunities and should other investment opportunities 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 provides 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.

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.

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 have been implemented. Revenue this year has shown a significant increase.

Performance

The performance of the Company is reliant on the performance of ADVFN plc. Certain management charges are levied on 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. In addition the following KPI's may prove helpful:

	2015	2015	2014	2014
	Actual	Target	Actual	Target
Turnover (£'000)	94	80	78	80
Operating results (£'000)	(4)	(0)	(7)	(10)
Loss per share (pence)	(0.05)p	(0.00)p	(0.12)p	(0.11)p

Operating costs

Our costs remain reasonably fixed and predictable and we do not see that changing in the immediate future. However, the Directors have made efforts to control the Company's running costs.

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 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

12 November 2015

Profit and Loss Account

for the year ended 30 June 2015

	Notes	2015	2014
		£'000	£'000
Turnover		94	78
Administrative expenses		(98)	(85)
Operating loss		(4)	(7)
Interest payable		-	(2)
Loss on ordinary activities before taxation		(4)	(9)
Tax on loss on ordinary activities		-	-
Loss on ordinary activities after taxation		(4)	(9)
Basic and diluted loss per ordinary share	1	(0.05)p	(0.12)p

All operations are continuing.

There were no recognised gains or losses other than the loss for the year.

Balance Sheet

at 30 June 2015

				2015	2014
			Notes	£'000	£'000
Fixed assets
Investments				868	868
Current assets
Debtors				80	109
Cash at bank				24	-
				104	109
Creditors: amounts falling due within one year				(45)	(53)
Net current assets				59	56
Total assets less current liabilities				927	924
Capital and reserves
Called up share capital				3,242	3,242
Share premium account				2,205	2,205
Option valuation reserve				35	28
Profit and loss account				(4,555)	(4,551)
Shareholders' funds			2	927	924

Cash Flow Statement

for the year ended 30 June 2015

				2015	2014
				£'000	£'000
Net cash inflow from operating activities			3	39	20
Increase in cash				39	20
Bank overdraft balance at the beginning of the period				(15)	(35)
Cash at bank and bank overdraft at the end of the period			4,5	24	(15)

				2015	2014
				£'000	£'000
Cash at bank and in hand				24	-
Bank overdraft				-	(15)
Cash at bank and bank overdraft at the end of the period			5	24	(15)

1.             Loss per share

		2015			2014
	Loss	Number of	Earnings	Loss	Number of	Earnings
		shares	per share		shares	per share
	£'000	'000	p	£'000	'000	p
Basic and diluted loss per share
Loss for the year	(4)			(9)
Weighted average number of shares		7,662			7,662
Basic and diluted loss per share			(0.05)p			(0.12)p

As there was a loss in both years the existence of share options is not dilutive.

2.             Reconciliation of movements in shareholders' funds

			2015	2014
			£'000	£'000
Loss for the financial year			(4)	(9)
Recognition of equity settled share based payments in the year (FRS20)			7	8
Net decrease in shareholders' funds in the year			3	(1)
Shareholders' funds at 1 July			924	925
Shareholders' funds at 30 June			927	924

3.             Reconciliation of operating loss to net cash inflow from operating activities

			2015	2014
			£'000	£'000
Operating loss			(4)	(9)
Equity settled share based payments in the year			7	8
Decrease in debtors			29	12
Increase in creditors			7	9
Net cash inflow from operating activities			39	20

Notes to the Financial Statements

for the year ended 30 June 2014

4.             Reconciliation of net cash flow to movement in cash at bank

	2015	2014
	£'000	£'000
Increase in cash for the year	39	20
Net debt at 1 July	(15)	(35)
Net cash at bank at 30 June	24	(15)

5.             Analysis of movement in net debt

			At 1 July 2014	Cash flow	At 30 June 2015
			£'000	£'000	£'000
Bank overdraft			(15)	39	24

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 2015 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Company's 2015 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.

 

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