Preliminary Results
On-Line PLC
05 November 2007
On-line PLC
('On-line' or 'the Company')
Preliminary Results for the Year Ended 30 June 2007
On-line today announces preliminary results for the year ended 30 June 2007.
For further information, please contact:
Michael Hodges, Chairman and
Managing Director mikeh@advfn.com
Francesca De Franco, PR francescad@advfn.com 020 7070 0932
Fiona Kindness, Grant Thornton UK LLP (Nominated Adviser) 020 7728 3414
On-line PLC
Chairman's Statement
During the past year we have continued our primary focus of working with our
investments to maximise their future potential. As regards the figures for the
year ended 30 June 2007, this is the first year our accounts have been prepared
in accordance with FRS 20 which specifies the accounting treatment to be adopted
(including the disclosures to be provided) by companies making share-based
payments, which includes all types of option schemes. The accounts are
therefore set out in a slightly different way to those you may have seen before.
In our interims we announced a turnover of £27,000 and a loss for the half-year
of £211,000. For the full year our turnover has increased to £54,000, up by 50%
from 2006 and our overall loss for the year has increased to £279,000 (2006:
£103,000). As was explained in my Chairman's statement with the interims the
size of these losses is predominantly due to the amount being written off our
investment in ALL IPO, (£211,000 at the interim stage and £273,000 for the full
year) where its share price fell over the period and under accounting
conventions is required to be stated at the lower of cost and net realisable
value. As at the half year, I would like to note that accounting conventions do
not allow us to include a similar uplift in the value of ADVFN which at the
year-end has a market value of over £2.5M more than the cost at which it is
included within the balance sheet. It is also worth mentioning that our
operating loss reduced by over 60% to £7,000 from £18,000, due to very close
control of overheads and that if it were not for having to bear the £11,000 cost
for the first time in connection with the adoption of FRS 20 relating to
expensing the value of share options, that £7,000 operating loss would actually
have been a £4,000 operating profit.
ADVFN PLC
ADVFN has once again continued to increase its presence outside of the UK and
during the year ended 30 June 2007 it has made great progress in the USA,
Brazil, Italy and France with significantly increased bulletin board activities
in those jurisdictions which has led to increased advertising revenues. Since
the acquisitions of InvestorsHub and Silicon Investor in the USA, ADVFN's
internet traffic has risen greatly. Its non-internet business, Equity
Development, which primarily provides sponsored equity research in the UK, is
also making a very positive contribution to the group's performance and its
management have recently achieved their second year earn-out growth targets
agreed at the time of the acquisition.
ALL IPO PLC
Whilst not yet generating significant revenues, All IPO has continued to build
valuable relationships within the City and has made good progress in this area.
This has allowed it to make 66 IPOs available to its members during the year to
30 June 2007 (2006: 14). It still needs to continue its drive to ensure that it
can access the more mainstream IPOs as they become available whilst expanding
its membership numbers to which it can offer financial products to.
Financial overview
We have endeavoured to ensure our investments develop in a strong way so that we
can benefit from their growth and expansion. As reported above, our turnover has
increased and our operating loss for the year has more than halved to £7,000
from £18,000 for year ending 2006. However, our loss on ordinary activities has
increased from the figure of £211,000, reported at the interim stage, to
£279,000 for the year, which includes an amount written off investments of
£273,000.
Financial performance
Key financial performance for the year has been analysed as follows:
Year to Year to Change
30 June 2006
30 June 2007 Change
£'000 £'000 £'000 %
Turnover 54 36 18 50
Operating loss (7) (18) 11 61
Strategy
Our strategy is to continue to work with our investments to try and ensure their
success while at the same time looking for new opportunities that the company
might benefit from.
Operating costs
Our costs are reasonably fixed and predictable. We have taken steps to reduce
our overheads to the absolute minimum and we expect this to continue as we move
forward.
Research and development
The company continues 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
Management continued to look for ways to develop the company's environmental
policy during the year. It is our objective to consistently improve our
performance in this area.
Summary of key performance indicators
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 our
investments in ADVFN PLC and ALL IPO PLC and are as follows:-
2007 2007 2006 2006
ALL IPO PLC Actual Target Actual Target
Increase in registered users 58% 50% n/a (nil at n/a (nil at
start) start)
Website Traffic hits per month 0.77m 0.5m 0.27m 0.25 m
averaged over year
IPO's made available 66 50 14 12
2007 2007 2006 2006
ADVFN PLC Actual Target Actual Target
Growth in sales (%) 35% 30% 35% 30%
Staff turnover (%) 18% 20% 25% 20%
Average head count 54 55 47 45
Advfn registered users 970K 850K 700K 650K
Group registered users 3.3M 2.5M 2M 1.75M
Future developments for the business
We aim to continue our focus on developing our investments and assisting their
growth. ADVFN is already one of the world's leading suppliers of financial data
and it is moving forward at a good pace. ALL IPO has made progress but still
needs to gain a greater access to the mainstream IPO pool that is available
within the City and is exploring other opportunities to allow the business to
grow.
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 could affect the business given the
sector both our main investments operate 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, 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.
Finally, I would just like to thank our shareholders for their continued support
and trust that their belief in the company will be proved right in the not too
distant future.
Michael Hodges
Chairman
2nd November 2007
On-line PLC
Profit and Loss Account
for the year ended 30 June 2007
Notes 2007 2006
£'000 £'000
Turnover 54 36
Administrative expenses
Equity settled share based payment charge (11) -
Other administrative expenses (50) (54)
Total administrative expenses (61) (54)
Operating loss (7) (18)
Profit on sale of investments 1 -
Amount written off on investments (273) (85)
Loss on ordinary activities before (279) (103)
taxation
Tax on loss on ordinary activities - -
Loss on ordinary activities after (279) (103)
taxation
Basic and diluted loss per ordinary share
from total and continuing operations 2 (3.6p) (1.3p)
All operations are continuing.
On-line PLC
Balance Sheet
at 30 June 2007
2007 2006
Notes £'000 £'000
Fixed assets
Investments 1,015 1,288
Current assets
Debtors 7 56
Investments 900 794
Cash at bank and in hand 46 27
953 877
Creditors: amounts falling due within (88) (82)
one year
Net current assets 865 795
Total assets less current liabilities 1,880 2,083
Capital and reserves
Called up share capital 3,242 3,242
Share premium account 2,205 2,205
Option valuation reserve 11 -
Profit and loss account (3,578) (3,364)
Shareholders' funds 3 1,880 2,083
The financial statements were approved by the Board of Directors on
2nd November 2007.
On-line PLC
Cash Flow Statement
for the year ended 30 June 2007
2007 2006
Notes £'000 £'000
Net cash inflow / (outflow) from operating 4 13 (4)
activities
Returns on investment and servicing of
finance
Interest paid - -
Capital expenditure and financial investment
Purchase of investments - (49)
Proceeds of disposal of investments 10 -
Loans to other entities (4) -
Loans repaid to other entities - 32
6 (17)
Net cash inflow before financing 19 (21)
Financing
Issue of ordinary share capital - -
Net cash inflow from financing - -
Increase / (decrease) in cash 5,6 19 (21)
Statement of Total Recognised Gains and Losses
for the year ended 30 June 2007
2007 2006
£'000 £'000
Loss for the financial year (279) (103)
Unrealised gain / (loss) on current asset 65 (209)
investments
Total recognised gains and losses for the year (214) (312)
On-line PLC
Notes for the year ended 30 June 2007
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 Company's 2007 statutory financial statements upon which
the auditors reported on 2 November 2007. Their opinion does not include any
statement under section 237 of the Companies Act 1985.
The financial statements have been prepared in accordance with applicable United
Kingdom Accounting Standards and under the historical cost convention. The
principal accounting policies have remained unchanged since the previous year
except for the adoption of FRS 20 'Share based payments'.
The Company has adopted FRS20 with effect from 1 July 2006. FRS20 requires the
recognition of a charge to the profit and loss account for all applicable share
based payments, including share options. The Company has equity-settled share
based payments but no cash-settled share based payments. All share based
payments awards granted after 7 November 2002 which had not vested prior to 1
July 2006 are recognised in the financial statements at their fair value at the
date of grant.
As vesting periods and non-market based vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of share
options expected to vest. Estimates are revised subsequently if there is any
indication that the number of share options expected to vest differs from
previous estimates. Any cumulative adjustment prior to vesting is recognised in
the current period. All equity-settled share based payments are ultimately
recognised as an expense in the profit and loss account with a corresponding
credit to the option valuation reserve.
As the options in issue at 1 July 2006 had all vested, no prior year restatement
of the financial statements for the year ended 30 June 2006 is required. The
FRS20 charge for the year amounted to £11,000.
Copies of the annual report are being posted to shareholders and copies will be
available from the company's registered office at Suite 27, Essex Technology
Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.
2. Loss per ordinary share
2007 2006
Number of Loss Number of Loss
Loss shares per share Loss shares per share
£'000 '000 p £'000 '000 p
Loss for the year (279) (103)
Weighted average number of shares 7,662 7,662
Loss per share (3.6p) (1.3p)
The share options are anti-dilutive for both years due to the losses incurred.
3. Reconciliation of movements in shareholders' funds
2007 2006
£'000 £'000
Loss for the financial year (279) (103)
Recognition of equity settled share based payments in the
year (FRS20)
11 -
Unrealised gain / (loss) on investments 65 (209)
Net decrease in shareholders' funds in the year (203) (312)
Shareholders' funds at 1 July 2006 2,083 2,395
Shareholders' funds at 30 June 2007 1,880 2,083
4. Reconciliation of operating loss to net cash inflow/(outflow) from
operating activities
2007 2006
£'000 £'000
Operating loss (7) (18)
Recognition of equity settled share based payments
in the year (FRS20)
11 -
Decrease in debtors 3 7
Increase in creditors 6 7
Net cash inflow / (outflow) from operating 13 (4)
activities
5. Reconciliation of net cash flow to movement in net funds
2007 2006
£'000 £'000
Increase / (decrease) in cash for the year 19 (21)
Net funds at 1 July 2006 27 48
Net funds at 30 June 2007 46 27
6. Analysis of movements in net funds
At Cash flow At
1 July 30 June 2007
2006
£'000 £'000 £'000
Cash in hand and at bank 27 19 46
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 13th May 2024
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