Preliminary Results for Year Ended 30 June 2014

RNS Number : 7635W

On-Line PLC

12 November 2014

 

12 November 2014

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

Preliminary Results for the Year Ended 30 June 2014

On-line today announces preliminary results for the year ended 30 June 2014.

For further information, please contact:

Michael Hodges

Chairman and Managing Director                     

[e-mail]

Salmaan Khawaja/Edward Thomas

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 £78,000 (2013: £91,000) giving us a loss before tax of £9,000 (2013: loss of £11,000). 

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 it. ADVFN continues to make progress and has benefitted from particularly strong results from the US. The following extract from the accounts of ADVFN plc is included to give information on the performance of the Companies investment:

Extracts from ADVFN's 2014 accounts:

"ADVFN HIGHLIGHTS

·               EBITDA* profit increases to £298,000 (2013: profit of £108,000)

·               Loss for the period down to £454,000 (2013: loss of £539,000)

·               ADVFN's registered user base continues to grow and is in excess of                         3,000,000 (2013: 2,800,000)

*EBITDA is calculated as the operating result for the year before depreciation and amortisation charges.

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

2014 was a good year. Our EBITDA was £298,000 up 176%. This was on top of a significant improvement in

the year before.  Sales were £9,702,000 up £1,625,000 from £8,077,000, an increase of 20% from 2013 levels.

The operating loss improved again in 2014 by £208,000 from a loss of £871,000 in 2013 to £663,000 this year.

Our cash rose by £214,000 to £1,675,000 from £1,461,000 in 2014.

These solid gains have been against a background of further investment, apparently depressed market activity as far as market participants are concerned and a rampant pound which suppressed the results of our very strong US performance. ADVFN's growth has come from increased advertising sales, which has coincided with our total subscriber numbers rising.

Our focus remains the same with particular concentration on the US which continues to deliver on its promise.

Key to this year has been our US OTC QX listing in the US and our capital reorganization and American Depository Receipts (ADR) program. Picking our Google analytic stats at random, in April 2014 we had 5.4 million US visitors in that month according to Comscore we are the ninth biggest finance site in the US by page impressions.  The eight bigger were: Yahoo Finance, MSN Money, Dow Jones & Company, CNBC, Bloomberg, AOL Money & Finance, CNN Money and Forbes Digital. Anyone else you have ever heard of in our field is smaller than us in the US, that's staggering.

During 2015 we hope to continue to show how well we can present ourselves to this audience, which, if we are successful in reaching them, will drive a flow of our UK shares into the US ADR.

PART OF THE ADVFN STRATEGIC REPORT

Summary of key performance indicators

	2014	2014	2013	2013
	Actual	Target	Actual	Target
EBITDA	£298k	£200k	£108k	£50k
Average head count	43	44	37	40
ADVFN registered users	3.0M	2.9M	2.8M	2.7M

On-line plc's Strategy

As an investment company On-line plc is always looking for further investment opportunities and the Directors will continue looking for new investment opportunities that the Company might benefit from. 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 as a result of recent reduction in revenues.

Performance

The performance of the Company is reliant on the performance of ADVFN plc. 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:

	2014	2014	2013	2013
	Actual	Target	Actual	Target
Turnover (£'000)	78	80	91	75
Operating results (£'000)	(7)	(10)	(10)	(12)
Loss per share (pence)	(0.12)p	(0.11)p	(0.14)p	(0.14)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.

 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.

Michael Hodges

Director

11 November 2014

Profit and Loss Account

for the year ended 30 June 2014

	Notes	2014	2013
		£'000	£'000
Turnover		78	91
Administrative expenses		(85)	(101)
Operating loss		(7)	(10)
Interest payable		(2)	(1)
Loss on ordinary activities before taxation		(9)	(11)
Tax on (loss)/profit on ordinary activities		-	-
Loss on ordinary activities after taxation		(9)	(11)
Basic and diluted loss per ordinary share	1	(0.12)p	(0.14)p

All operations are continuing.

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

Balance Sheet

at 30 June 2014

				2014	2013
			Notes	£'000	£'000
Fixed assets
Investments				868	868
Current assets
Debtors				109	121
Creditors: amounts falling due within one year				(53)	(64)
Net current assets				56	57
Total assets less current liabilities				924	925
Capital and reserves
Called up share capital				3,242	3,242
Share premium account				2,205	2,205
Option valuation reserve				28	37
Profit and loss account				(4,551)	(4,559)
Shareholders' funds			2	924	925

Cash Flow Statement  for the year ended 30 June 2014

				2014	2013
			Notes	£'000	£'000
Net cash inflow from operating activities			3	20	15
Increase in cash				20	15
Bank overdraft balance at the beginning of the period				(35)	(50)
Bank overdraft at the end of the period			4, 5	(15)	(35)

				2014	2013
				£'000	£'000
Cash at bank and in hand				-	-
Bank overdraft				(15)	(35)
Bank overdraft at the end of the period			5	(15)	(35)

1.             Loss per share

		2014			2013
	Profit	Number of	Earnings	Profit	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	(9)			(11)
Weighted average number of shares		7,662			7,662
Basic and diluted loss per share			(0.12)p			(0.14)p

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

2.             Reconciliation of movements in shareholders' funds

			2014	2013
			£'000	£'000
Loss for the financial year			(9)	(11)
Recognition of equity settled share based payments in the year (FRS20)			8	6
Net decrease in shareholders' funds in the year			(1)	(5)
Shareholders' funds at 1 July			925	930
Shareholders' funds at 30 June			924	925

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

			2014	2013
			£'000	£'000
Operating loss			(9)	(11)
Equity settled share based payments in the year			8	6
Decrease in debtors			12	28
Increase/(decrease) in creditors			9	(8)
Net cash inflow from operating activities			20	15

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

	2014	2013
	£'000	£'000
Increase in cash for the year	20	15
Net debt at 1 July	(35)	(50)
Net debt at 30 June	(15)	(35)

5.             Analysis of movement in net debt

			At 1 July 2013	Cash flow	At 30 June 2014
			£'000	£'000	£'000
Bank overdraft			(35)	20	(15)

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 2014 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Company's 2014 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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