Final Results

ADVFN PLC
21 December 2023
 

 

For immediate release

21 December 2023

ADFVN PLC 

("ADVFN" or the "Company")

Audited Results for the year ended 30 June 2023

Notice of General Meeting

 

The Board of ADVFN announces the audited annual results for the year ended 30 June 2023. The Annual Report and Accounts will shortly be sent to shareholders and will be available on the Company's website,  http://www.advfnplc.com. A copy of this announcement is also available on the Company's website,  http://www.advfnplc.com.

 

The Company is also publishing today a Notice of General Meeting which is due to be held on 12 January 2024 at 10.30 a.m at RPC, Tower Bridge House, St Katherine's Way, London E1W 1AA. A copy of the Notice is also available on the Company's website,  http://www.advfnplc.com.

 

A copy of the Notice together with proxy voting forms and Accounts are being posted to all shareholders who are required to receive or have formally requested to receive these documents.  

 

For further information please contact:

ADVFN plc

Amit Tauman (CEO)

+44 (0) 203 8794 460

Beaumont Cornish Limited (Nominated Adviser)

Michael Cornish

Roland Cornish

+44 (0) 207 628 3396

Peterhouse Capital Limited (Broker)

Eran Zucker

+44 (0) 207 469 0930

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. The person who arranged for the release of this announcement on behalf of the Company was Amit Tauman, Director.

 

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.

 

 

 

Chairman's Statement

As the Non-Executive Chairman of ADVFN, this year has been marked by significant evolution in both our Board and executive roles. The dramatic changes we've experienced have brought challenges, but they have also opened opportunities for future growth and improvement. Our focus has been on ensuring that these transitions align with our vision and future goals and reinforce our commitment to robust governance.

In supervising the executive team, led by CEO Amit Tauman, the Board has been instrumental in navigating these changes. We have emphasised operational efficiency and financial stability, ensuring that our strategic initiatives are both effective and responsible.

Currently, we are in the process of recruiting high-level positions further to strengthen our leadership team and enhance diversity. This pursuit is critical to our ongoing commitment to excellence in governance and strategic oversight.

In conclusion, we remain steadfast in our dedication to steering ADVFN towards sustained growth and success.

 

Lord Gold

Non-executive Chairman

Chief Executive's Statement

As the CEO of ADVFN, I am honored to guide our company through a transformative period. Upon assuming my role, I was confronted with a reality far more complex than anticipated: the company was struggling with significant financial limitations, possessing barely any cash reserves. Moreover, the need for a strategic overhaul in our organisational structure, culture and staff was evident, especially while navigating through difficult market conditions.

While this period has not been without its share of challenges, our progress over the last year has been substantial and encouraging. The work we have done and are continuing to do can be categorised under the following headings:

 

Overcoming Challenges and Legacy Constraints:

·      We have addressed the challenges of outdated infrastructure and the risks associated with our old hardware, which often resulted in system downtime and additional risk exposures. In parallel, we have initiated a migration to cloud-based solutions to enhance performance and further mitigate risk.

·      We have resolved complexities with our joint venture in Brazil, unexpected audits and historical vendor agreements which have now been agreed upon.

·      We have wound down non-core operations including ALLIPO, MJAC, Fotothing, CupidBay and Dubai offices, which were loss making and no longer aligned with our strategic direction. In the current year, the group impaired the historic goodwill in InvestorsHUB, leading to an impairment of £978,000 on the income statement. This has been treated as exceptional in nature and has resulted in the goodwill balance being fully impaired.

·      We have reshaped the board structure and related activities, incurring significant legal expenses, amounting to approximately £200,000. These costs are due to legal fees, relating to potential claims against some of the previous management with whom settlements were reached.

 

Reshaping Our Company:

We have restructured the Board of Directors and made comprehensive adjustments within our staff, moving from a traditional corporate structure to a startup mindset focused on growth and innovation. These shifts also meant parting ways with those who did not align with the company's new cultural standards.

Achievements and Ongoing Initiatives:

·      Fundraising: We succeeded in raising £6.5m, mainly from our existing shareholders, reflecting an impressive belief in the new management. 

·      Expanding our product offering: The launch of real-time option data and option flow product, new and unique editorial content, comprehensive global fundamental data for relevant markets, and the revamp of the InvestorsHub message board. 

·      Expanding into Korea, forming a new arrangement with our Brazilian partners and establishing two additional partners in 2024. 

·      R&D and Infrastructure: We have made substantial investments in high-capacity, low-latency data processing to improve site stability, laying the groundwork for developing large-scale real-time streaming products.

·      Cost Reductions: We have managed to reduce the overall operational costs by 20% and reduce our headcount, including contractors, from 40 to 31, while onboarding new senior team members. 

·      Monetisation and Analytics: We have successfully completed the optimisation of our ad tech operations and effectively streamlined our funnels for user engagement and monetisation. Additionally, we have shifted towards a data-driven decision-making approach, integrating advanced analytics into our operations.

·      App: We plan to release our new app by the end of Q2 2024.

 

Strategic Focus and Future Vision:

 

Given the challenging market conditions and stock market volatility, our short-term objective has been to transform into a small and dynamic team. We place a significant emphasis on cost-effectiveness, while prioritising the preservation of our cash reserves for strategic investments. As we reach a point of financial stability and become a more efficient organisation, we will be poised to identify and seize opportunities further to grow our business.

 

In the first 5 months of the present financial year, improvements are already being seen.

 

We are pleased to announce that our initial phase of changes and redesign of our product offering will be fully optimised by Q1 2024.

 

In 2024 we plan to introduce a new product which we believe is going to revolutionise the way our users consume financial information, utilise our existing community and tools in different ways. 

 

As the company's CEO, my foremost objective is to forge a clear vision and strategy for the Company to deliver these changes. I am confident that the trust of our shareholders, combined with the skills and motivation of our team under my leadership, will show much different results in 2024.

 

Amit Tauman

CEO

 

 

20 DECEMBER  2023

 

 

Strategic Report

 

Financial Overview           

The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards.

The loss for the financial year after tax amounted to £2,169,000 (2022: a loss of £1,368,000). The Directors are not proposing payment of a dividend.

Throughout this fiscal year, we encountered a series of exceptional expenses that impacted on our financial landscape. A considerable portion of our expenses, exceeding £200,000, arose from legal fees, particularly following the change in our board of directors and related to potential litigation resolved with former management. Another significant factor contributing to the loss was the impairment of goodwill of £978,000 related to InvestorsHub.

Further cash expenditure totalling £100,000 was incurred during our fundraising activities. In addition, we have wound down various operations, including the subsidiaries ALLIPO, CupidBay, MJAC, and Fotothing, and our presence in Dubai, all of which incurred one-time costs. While these closures were essential in redirecting our resources and focus on our primary objectives, they are also instrumental in our ongoing process of cost reduction. By adopting new technology, we anticipate further reductions in hosting and IT expenses beginning early 2024. Moreover, our exits and renegotiations with different providers are expected to lead to additional cost savings.


While the spend was high this year, we are moving toward one of our goals and seeing diminishing expenses and constantly reducing operational costs:

●      Operational costs are down on average by 20% YoY. 7,076k vs 8,852k

●      Headcount, reduced by 23% YoY from 40 to 31.

ADVFN 2022-2023 financial highlights:

●      Revenue was £5.5 million compared to £7.8 million in the prior year.

●      Net loss was £2.1 million (including £314k loss arising from discontinued operations, £978k impairment of goodwill and £200k of non-recurring legal fees) compared to net loss of £1.37 million in the prior year period.

●      Cash and cash equivalents: £5.6 million compared to £0.9m in the prior year.

 

The Directors are not proposing payment of a dividend (2022: £589k).

 

Business Review

Navigating through current market conditions remains challenging. Market conditions in 2022/23 dampened retail investors' enthusiasm in the entire financial data sector.

However, the ADVFN team remains patient and focused on crafting a long-term strategy that we firmly believe will significantly enhance our financial standing over the coming years.

The focal point of the 2023/24 year's efforts lies in building our new app and our new product offering while simultaneously growing and cultivating our community and forums, together aiming to position ADVFN as a state-of-the-art one-stop shop for investors.

Summary of key performance indicators

As ADVFN continues to evolve, our approach to Key Performance Indicators (KPIs) reflects a significant shift from previous strategies. In line with our strategic plan for the future, we are focusing on a combination of immediate and long-range objectives that align with our current strategic path. Our operating costs have been reduced by 20% on a year-on-year basis. This concerted effort has paved the way for enhanced fiscal efficiency and positions us well on the trajectory towards our cost-effective goal. This ongoing trend underscores our commitment to fiscal prudence and the prudent allocation of resources. We remain confident that those costs will continue to diminish over H1.

1. Operational Cost Reductions: Our objective is adopting a cost-effective approach, aimed at cutting unnecessary expenses that do not align with our new strategy. This shift is exemplified by our reduced headcount, now at 31 from 40, though headcount is no longer a key metric in isolation.

 

2. Traffic Growth: We believe that traffic growth should be our foremost KPI. As we approach full optimisation, our primary focus is on the top of the funnel - increasing traffic while maintaining cost effectiveness to support this growth. This strategic emphasis is crucial for driving our next phase of development.

 

3. Turnover Increase: We anticipate that the increase in traffic, bolstered by our fully established monetisation process, will in turn lead to an increase in turnover. Our focus on attracting and retaining users, coupled with efficient monetisation, lays the foundation for enhanced financial performance.

While specific metrics like headcount and registered users are no longer primary KPIs, they play a supportive role in our broader objectives.

 

Principal risks and uncertainties

1.   Currency Fluctuations: Operating in multiple countries exposes us to the risks associated with fluctuating exchange rates of the Euro, GBP, and the US Dollar. These currency fluctuations can impact on our revenues, expenses, and overall financial stability, making it imperative to employ effective currency risk management strategies. To mitigate these risks, we are reviewing our pricing transfer agreements and primarily maintaining most our revenues in GBP. This approach helps stabilise our financial operations against currency volatility.

2.   Interest Rates and Inflation: Rising interest rates and inflation pose challenges to our financial model. Not only can these factors increase our borrowing costs, but they can also affect end-user and provider fees, potentially eroding our profit margins. It is crucial to monitor and adapt to changes in these economic indicators. In response, we have secured long-term contracts with many of our providers, aiming to lock in current rates and mitigate the risks associated with inflation.

3.   Ad Networks Industry Volatility: The ad networks industry is witnessing a decline in overall revenue, exemplified by the recent bankruptcy of companies like EMX and MediaMath. This is reflected in the Online Ad Revenue Index, which has dropped by over 30%. These industry-wide challenges necessitate a proactive approach in diversifying our revenue streams and ensuring financial stability. To address these industry-wide challenges, we are diversifying our revenue streams by expanding our product offerings and focusing on increasing subscriptions. This strategy is designed to reduce our dependence on ad revenues and enhance financial stability.

4.   Market Uncertainty Impacting Traffic: The unpredictability in global markets directly impacts on our website traffic and user engagement. During times of economic uncertainty and a steady downward trend, users may reduce their online activity or shift their preferences, affecting our platform's performance. Developing resilience and adaptability strategies is essential to mitigate the adverse effects of market fluctuations on our traffic and user engagement. To counteract these effects, we are continually working on converting new traffic and intensively improving our SEO. These efforts are aimed at maintaining and growing our user base despite market fluctuations.

5.   Regulatory adherence: In the ever-evolving landscape of digital regulation, we are acutely aware of the increasing complexities and tightening of rules surrounding GDPR and User-Generated Content (UGC) compliance. These regulatory frameworks are critical in shaping how we manage data and interact with our user base. To navigate these changes effectively, we are steadfast in our commitment to staying abreast of new regulations and governance practices. Our approach includes the development of robust compliance guidelines and ongoing consultations with legal experts and industry specialists.

6.   Inadequate Disaster Recovery Procedures: Addressing the risks associated with our on-premises data storage, especially in the event of a disaster, is a top priority. Such events pose serious threats to our data integrity and infrastructure. To mitigate these risks, we are transitioning to cloud-based data storage for improved security and redundancy and are updating our infrastructure by replacing old hardware with more robust and reliable systems. This strategy is key to ensuring the protection and stability of our operations under any circumstances.

Consideration of the principal risks associated with financial instruments is contained in note 23.

People

I would like to thank the whole team at ADVFN who have worked hard during a tumultuous time in the markets.

Directors' statement of responsibilities under section 172 Companies Act 2006

 

The Directors have considered the requirements of Section 172(1) of the Companies Act 2006 to prepare a statement explaining how the Directors have considered the wider stakeholder needs when performing their duties under Section 172 of the Companies Act 2006.

 

The Directors consider the stakeholders to be the people who work for us, work with us, invest with us, own us, regulate us and live in the societies we serve. The Directors recognise that building strong relationships with our stakeholders will help deliver the Group's strategy in line with the long-term values. The Directors are committed to effective engagement with all of our stakeholders and seek to understand the interests and views of the Group's stakeholders by engaging with them directly as appropriate.

 

Depending on the nature of the issue in question, the relevance of each stakeholder group may differ and, as such, as part of the Group's engagement with stakeholders, the Directors seek to understand the relative interests and priorities of each group and to have regard to these, as appropriate, in their decision making. The Directors acknowledge, however, that not every decision the Board makes will necessarily result in a positive outcome for all stakeholders. However, the Directors do challenge management to ensure all stakeholder interests are considered in the day-to-day management and operations of the Group.

.

As part of their deliberations and decision-making process, the Directors take into account the following:

 

• the likely consequences of any decisions in the long term;

• interests of the Group's employees;

• need to foster the Group's business relationships with suppliers, customers and others;

• impact of the Group's operations on the community and environment;

• desirability of the Group maintaining a reputation for high standards of business conduct; and

• the need to act fairly as between members of the Group.

 

As a result of these activities, the Directors believe that they have demonstrated compliance with their obligations under s.172 of the Companies Act 2006.

 

 

Business

 

The Directors' aim for the Group is to be and remain a contributing and good "Corporate Citizen".

 

Our business does not have a high carbon footprint and we consider it to be a sustainable business. We try to ensure that our planet's precious resources are used appropriately for the benefit of current and future generations. The Board considers that the business and strategic decisions which it takes now, in furtherance of the Group's business objectives, do not damage the global environment.

 

Employees

 

The Group has a small number of employees but those it has are situated and are deployed on the Group's business around the World. We ensure that we comply with all local labour laws and apply what the Directors believe are appropriate standards and systems to monitor and ensure the welfare of those employees.

 

Stakeholder engagement

 

The Group is entirely owned by the shareholders of ADVFN Plc and the shares of the Group are traded on AIM. The stakeholders of the Group consist predominantly of the shareholders, employees, advisers and suppliers. The Directors recognise the importance of these relationships and take active steps to develop and strengthen them through dialogue and engagement. These relationships are regularly monitored at Board level. 

 

 

 

Governance

 

Each Board meeting addresses compliance by the Group with its corporate governance codes and reinforces the Board's requirement that its business be conducted with integrity and with due regard for ethical standards.

 

ON BEHALF OF THE BOARD

 

 

Amit Tauman

 

CEO

 

20 DECEMBER 2023

 

 

 

 

 

Consolidated income statement

 



 

 

30 June

30 June



2023

2022


Notes

£'000

£'000



 

 



 


Revenue

3

5,445

7,848

Cost of sales


(316)

(374)





Gross profit


5,129

7,474





Share based payment

21

319

-

Amortisation of intangible assets

12

(191)

(256)

Administrative expenses


(6,026)

(7,176)

Administrative expenses - non-recurring items

6

(1,178)

(1,420)





Total administrative expenses


(7,076)

(8,852)





Operating loss

4

(1,947)

(1,378)





Finance income

7

24

-

Finance expense

7

(11)

(14)

Other income


20

-





Loss before tax


(1,914)

(1,392)

Taxation

8

58

24





Loss from continuing operations

 

(1,856)

(1,368)

Loss from discontinued operations

3

(313)

-





Total loss for the period attributable to shareholders of the parent


(2,169)

(1,368)





Loss per share from continuing operations



RESTATED

Basic

9

(5.16p)

(5.19p)

Diluted

9

(5.16p)

(5.19p)





Loss per share from total operations



RESTATED

Basic


(6.03p)

(5.19p)

Diluted


(6.03p)

(5.19p)


 

 


 

 

Consolidated statement of comprehensive income

 



 

 

30 June

30 June



2023

2022



£'000

£'000



 

 



 


Loss for the year

 

(2,169)

(1,368)


 



Other comprehensive income:

 



Items that will be reclassified subsequently to profit or loss:

 




 



Exchange differences on translation of foreign operations

 

33

73


 



Total other comprehensive income

 

33

73


 



Total comprehensive loss for the year attributable to shareholders of the parent

 

 

(2,136)

 

(1,295)


 



 

 

 

The accompanying accounting policies and notes form an integral part of these financial statements.

Consolidated balance sheet

 



 

 

30 June

30 June

 

 

2023

2022

 

Notes

£'000

£'000

 


 


Assets

 

 

 

Non-current assets

 

 


Property, plant and equipment

10

160

98

Goodwill

11

-

988

Intangible assets

12

1,003

1,124

Trade and other receivables

15

25

26

 




 


1,188

2,236

 




Current assets




Trade and other receivables            

15

466

460

Cash and cash equivalents


5,557

915

 




 


6,023

1,375

 




Total assets


7,211

3,611

 




Equity and liabilities




Equity




Issued capital

20

92

53

Share premium


6,676

305

Share based payment reserve


22

341

Foreign exchange reserve


316

283

Retained earnings


(1,828)

340

 




 


5,278

1,322

 




Non-current liabilities




Borrowing - bank loans

17

20

41





 


20

41

 




Current liabilities




Trade and other payables

19

1,903

2,148

Borrowing - bank loans

17

10

13

Borrowing - lease liabilities

17

-

87

 




 


1,913

2,248

 




Total liabilities


1,933

2,289

 




Total equity and liabilities


7,211

3,611

 

 



 

The financial statements on pages 23 to 63 were authorised for issue by the Board of Directors on 20 December 2023 and were signed on its behalf by:

 

 

 

 

Amit Tauman

CEO

Company number: 02374988

 

 

 

The accompanying accounting policies and notes form an integral part of these financial statements.

 

 

 

 

 

 

 

 

Company balance sheet


At 30 June

At 30 June

 

Note

2023

2022



£'000

£'000





Assets


 


Non-current assets


 


Property, plant and equipment

10

154

24

Intangible assets

12

218

234

Trade and other receivables            

15

25

24

Investments

13

-

1,001







397

1,283

 




Current assets




Trade and other receivables            

15

313

786

Cash and cash equivalents


5,301

529







5,614

1,315





Total assets


6,011

2,598





Equity and liabilities




Equity




Called up share capital

20

92

53

Share premium account


6,676

305

Share based payment reserve


22

341

Retained earnings


(2,653)

(507)







4,137

192





Non-current liabilities




Borrowings - bank loans

17

20

41

Deferred tax


104

104







124

145





Current liabilities




Trade and other payables

19

1,740

2,248

Borrowings - bank loans

17

10

13







1,750

2,261





Total liabilities


1,874

2,406





Total equity and liabilities


6,011

2,598









The financial statements were authorised for issue by the Board of Directors on 20 December 2023 and were signed on its behalf:

 

 

 

 

Amit Tauman

CEO

Company number: 02374988

 

Company statement of comprehensive income

 

As permitted by Section 408 of the Companies Act 2006, the income statement and statement of comprehensive income of the parent company is not presented as part of these financial statements. The parent company's result after taxation for the financial year was a loss of £2,146,000 (2022:  loss of £2,231,000).

 

The accompanying accounting policies and notes form an integral part of these financial statements.

 

 

 

 

 

 

Consolidated statement of changes in equity

 

 

Share capital

Share premium

Share based payment reserve

Foreign exchange reserve

Retained earnings

 

Total equity

 

 

£'000

£'000

£'000

£'000

£'000

£'000

 







At 1 July 2021

52

223

343

210

2,295

3,123

 







Transactions with equity shareholders:







Share issues

1

82

-

-

-

83

Transfer on exercise

-

-

(2)

-

2

-

 







 

1

82

(2)

-

2

83

 







Distributions to owners







Dividends

-

-

-

-

(589)

(589)









-

-

-

-

(589)

(589)

 







Loss for the year after tax

-

-

-

-

(1,368)

(1,368)








Other comprehensive income







Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

73

 

-

 

73

 







Total other comprehensive income

-

-

-

73

-

73

 







Total comprehensive income

-

-

-

73

(1,957)

(1,884)

 







At 30 June 2022

53

305

341

283

340

1,322

 







Transactions with equity shareholders:







Issue of shares

39

6,448

-

-

-

6,487

Cost associated with the issue of shares

-

(77)

-

-

-

(77)

Issue of options

-

-

1

-

-

1

Lapsed options

-

-

(320)

-

-

(320)









39

6,371

(319)

-

-

6,091















Loss for the year after tax

-

-

-

-

(2,168)

(2,168)

 







Other comprehensive income







Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

33

 

-

 

33

 







Total other comprehensive income

-

-

-

33

-

33

 







Total comprehensive income

-

-

-

33

(2,168)

(2,135)

 







At 30 June 2023

92

6,676

22

316

(1,828)

5,278

 







 

 

 

The accompanying accounting policies form an integral part of these financial statements.

 Company statement of changes in equity

 

 

Share capital

Share premium

Share based payment reserve

Retained earnings

 

 

 

Total equity

 

 

 

 

£'000

£'000

£'000

£'000

£'000







At 1 July 2021

52

223

343

2,311

2,929

 






Transactions with equity shareholders:






Share issues

1

82

-

-

83

Transfer on exercise

-

-

(2)

2

-

 






 

1

82

(2)

2

83

 






Distributions to owners






Dividends

-

-

-

(589)

(589)

 






 

-

-

-

(589)

(589)

 






Loss for the year after tax

-

-

-

(2,231)

(2,231)

 






Total comprehensive income for the year

-

-

-

(2,231)

(2,231)

 






At 30 June 2022

53

305

341

(507)

192

 






 






Transactions with equity shareholders:






Issue of shares

39

6,448

-

-

6,487

Cost associated with the issue of shares

-

(77)

-

-

(77)

Issue of options

-

-

1

-

1

Lapsed options

-

-

(320)

-

(320)

 

39

6,371

(319)

-

6,091

 






 






Profit for the year after tax

-

-

-

(2,146)

(2,146)







Total comprehensive income for the year

-

-

-

(2,146)

(2,146)

 






At 30 June 2023

92

6,676

22

(2,653)

4,137

 






 






 

 


 

 

 

The accompanying accounting policies and notes form an integral part of these financial statements.

 

Consolidated cash flow statement

 



 

 

12 months to

 30 June

12 months to

 30 June



2023

2022


Notes

£'000

£'000

 

 

 


Cash flows from continuing operating activities

 

 


Loss for the year from continuing operations

 

(1,855)

(1,368)

Net finance income in the income statement

7

(13)

14

Depreciation of property, plant & equipment

10

75

181

Amortisation of intangible assets

12

191

256

Write off goodwill

11

978

-

Write off intangible assets


-

296

Share based payments

21

(319)

-

(Increase) / Decrease in trade and other receivables


(20)

170

(Decrease)/increase in trade and other payables


(226)

262

 





Net cash generated by continuing operations


(1,189)

(189)





Cashflow from discontinued operating activities




Loss for the year from discontinued operations


(313)

-

Amortisation of intangible assets

12

23

-

Write off intangible assets

12

83

-

Decrease in trade and other receivables


14

-

Decrease in trade and other payables


(23)

-





Net cash generated by discontinued operations


(216)

-





Income tax receivable


-

-





Net cash generated by operating activities


(1,405)

(189)





Cash flows from financing activities




Issue of share capital

20

6,410

83

Dividend payments


-

(589)

Bank interest received


24

-

Repayment of loans

17

(24)

(13)

Repay lease liability

17

(91)

(103)

Lease interest paid

17

(4)

(10)

Other interest paid


(1)

(4)





Net cash generated by financing activities


6,314

(636)





Cash flows from investing activities




Payments for property, plant and equipment

10

(136)

(39)

Purchase of intangibles

12

(175)

(114)





Net cash used by investing activities


(311)

(153)





Net increase in cash and cash equivalents


4,598

(978)

Exchange differences


44

(46)



 


Net increase in cash and cash equivalents


4,642

(1,024)

Cash and cash equivalents at the start of the period


915

1,939





Cash and cash equivalents at the end of the period


5,557

915

 

All financing and investing activities were continuing.

 

 

 

 

The accompanying accounting policies and notes form an integral part of these financial statements.

 

Company cash flow statement

 



 

 

12 months to

 30 June

12 months to

 30 June



2023

2022


Notes

£'000

£'000

 

 

 


Cash flows from operating activities

 

 


Profit / (loss) for the period

 

(2,146)

(2,231)


 



Net finance expense in the income statement


1

1

Depreciation of property, plant & equipment

10

3

72

Amortisation of intangibles

12

191

223

Impairment of investments


1,001

1,275

Share based payments - options/warrants

21

(319)

-

(Increase)/decrease in trade and other receivables


473

7

Decrease/(increase) in trade and other payables


(509)

159





Net cash generated by operating activities


(1,305)

(494)









Cash flows from financing activities




Issue of share capital

20

6,410

83

Dividend payments


-

(589)

Repayment of loans

17

(24)

(13)

Interest paid


(1)

(1)





Net cash generated by financing activities


6,385

(520)





Cash flows from investing activities




Payments for property, plant and equipment

10

(133)

(32)

Purchase of intangibles

12

(175)

(75)





Net cash used by investing activities


(308)

(107)





Net increase/(decrease) in cash and cash equivalents


4,772

(1,121)

Cash and cash equivalents at the start of the period


529

1,650





Cash and cash equivalents at the end of the period


5,301

529

 

 


The accompanying accounting policies and notes on form an integral part of these financial statements.

 

Notes to the financial statements

 

1.      General information

 

The principal activity of ADVFN PLC ("the Company") and its subsidiaries (together "the Group") is the development and provision of financial information, primarily via the internet, research services and the development and exploitation of ancillary internet sites.

 

The principal trading subsidiaries are All IPO Plc, InvestorsHub.com Inc, N A Data Inc, MJAC InvestorsHub International Conferences Ltd and Cupid Bay Limited.

 

The Company is a public limited company which is quoted on the AIM of the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is Suite 28, Ongar Business Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.

 

The registered number of the company is 02374988.

 

Exemption from audit

For the year ended 30 June 2023 ADVFN Plc has provided a guarantee in respect of all liabilities due by its subsidiary companies Cupid Bay Limited (Company No. 04001650), All IPO Plc (Company Number 03230460) and MJAC InvestorsHub International Conferences Ltd (Company No. 11000464) thus entitling them to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.

 

2.      Summary of significant accounting policies

 

Basis of preparation

 

The consolidated and company financial statements are for the year ended 30 June 2023. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards as at 30 June 2023. The consolidated and company financial statements have been prepared under the historical cost convention and are presented in Sterling rounded to the nearest thousand (£'000) except where indicated otherwise.

 

The subsidiary companies Cupid Bay Limited, All IPO Plc and MJAC InvestorsHub International Conferences Ltd are exempt from an audit under s479A of the Companies Act 2006.

 

Going concern

 

The financial statements have been prepared on the going concern basis which assumes the Group will continue in existence for the foreseeable future. The Directors have prepared a detailed forecast of future trading and cash flows for the next three years after the accounts are approved. The forecasts take into potential future growth of the business both in the UK and USA, the development of products that will enhance the growth of the business and the potential areas for additional cost saving if required. At 30 June 2023 the Group's cash balances amounted to £5,557,000. The group forecasts are based on nil revenue growth in 2024 and then growth in 2025 of 5% to 10% for advertising and subscription revenue with costs not increasing by more than 5% for the UK and USA business over the two years. The forecasts show that the group and the company have sufficient funding to enable them to carry on as a going concern for the next twelve months from the date of signing the audit report. The Directors are also planning on developing new products that will enhance the growth of the business and will consider further areas for additional cost saving if required. The directors have given due consideration to the two subsidiaries for whom ADVFN Plc has given guarantees under the audit exemption rules and do not consider this will affect the Group's risk position. Accordingly, the Directors have prepared these financial statements on the going concern basis.

 

Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Company in the 30 June 2023 financial statements

 

IFRS 17 - Insurance Contracts 1 January 2023

Amendments to IFRS 17 - Insurance Contracts; and Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4 Insurance Contracts) 1 January 2023

Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements) 1 January 2023

Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors) 1 January 2023

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes) 1 January 2023

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) 1 January 2024

 

 

The Directors continue to monitor developments in the relevant accounting standards but do not believe that these changes will significantly impact the Group.

Notes to the financial statements (continued)

 

Summary of significant accounting policies (continued)

 

Basis of Consolidation

The Group's financial statements consolidate those of the parent company and all of its subsidiaries drawn up to 30 June 2023. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated on the date control ceases.

 

Inter-company transactions, balances and unrealised gains and losses (where they do not provide evidence of impairment of the asset transferred) on transactions between Group companies are eliminated.

 

Business combinations

The Group uses the acquisition method of accounting for the acquisition of a subsidiary. The consideration transferred is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed in the period.

 

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date irrespective of the extent of any non-controlling interest.

 

Goodwill is recognised at the acquisition date measured as the excess of the aggregate of:

·       The fair value of the consideration transferred

·       The fair value or, alternatively, the share of net assets of the non-controlling interest in the acquiree

·       In a combination achieved in stages, the fair value of the acquirer's previously held equity interest in the acquiree over the net of the acquisition date fair value of the identifiable assets acquired and the liabilities assumed.


Where the goodwill calculation results in a negative amount (bargain purchase) this amount is taken to the income statement in the period in which it is derived.

 

Joint arrangements

The Group has a joint arrangement in Brazil, ADVFN Brasil LTDA for the purpose of operating the ADVFN website in Brazil. ADVFN and Infoadvanced Prestacao De Servicos De Informacoes E Cotacoes Via Internet LTDA (Infoadvanced).  each own 50% of ADVFN Brasil. Both ADVFN and Infoadvanced have control over the entity. The agreement is structured as a joint operation as both parties would have the rights to separate income streams and be responsible for the related costs.

 

Foreign currency translation

a)   Functional and presentational currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The Company's functional currency and the Group's presentational currency is Sterling.

b)   Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

c)   Group companies

The results and financial position of all Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

·    Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet.

·    Income and expenses for each income statement are translated at the rate of exchange at the transaction date. Where this is not possible, the average rate for the period is used but only if there is no significant fluctuation in the rate and;

·    On consolidation, exchange differences arising from the translation of the net investment in foreign entities are recognised in other comprehensive income and accumulated in a separate component of equity. Post transition exchange differences are recycled to profit or loss as a reclassification adjustment upon disposal of the foreign operation.

 

 


 

Notes to the financial statements (continued)

 

Summary of significant accounting policies (continued)

 

Income and expense recognition

Revenue is the fair value of the total amount receivable by the Group for supplies of services. VAT or similar local taxes and trade discounts are excluded.

 

The revenues of the group are now accounted for under IFRS 15 'Revenue from contracts with customers' and reported as follows:

·         Subscriptions - both monthly and annual subscriptions are offered and the price for the subscription is quoted on the website. Revenue for annual subscriptions is deferred on a time basis with equal monthly transfers to the income statement to allocate the recognition across the period of service provision.  Payment is received in advance of subscription fulfilment.

·         Advertising - fees for advertising are recognised when the service obligations are fulfilled and are subject to agreement by a written contract which includes pricing. Where there are multiple obligations amounts specific to that obligation are transferred to the income statement.  Payment terms are 30 days following invoicing.

 

Interest income and expenditure are reported on an accruals basis. Operating expenses are recognised in the income statement upon utilisation of the service or at the date of their origin.

 

Employee benefits

The cost of pensions in respect of the Group's defined contribution scheme is charged to profit or loss in the period in which the related employee services were provided.

 

Non-recurring items

Certain administrative costs have been shown separately under the heading of "Administrative expenses - non-recurring items". The Directors consider these items to be unusual, one-off costs that are unlikely to reoccur in subsequent financial years. A breakdown of these costs is shown in note 6.

 

 

Notes to the financial statements (continued)

 

Summary of significant accounting policies (continued)

 

Intangible assets

- Licences

Licences are recognised at cost less any subsequent impairment and amortisation charges, they are amortised over a five-year period on a straight-line basis.

 

- Goodwill

Goodwill arose on the acquisition of InvestorsHub.com (IHUB). Goodwill is capitalised as an intangible asset and allocated to cash generating units (with separately identifiable cash flows). IHUB is considered to be a single CGU. Goodwill is subject to impairment testing on an annual basis or more frequently if circumstances indicate that the asset may have been impaired, by comparing the carrying value to the recoverable amount, being the higher of the fair value less cost of disposal and the value in use. The value in use has been determined based on management forecasts for the next 5 years, discounted at a rate of 10%. In the current year, the value in use was deemed to be lower than the carrying value and therefore the goodwill has been impaired in full.

 

- Internally generated intangible assets

An internally generated intangible asset (website and mobile application) arising from development (or the development phase) of an internal project is recognised if, and only if, all of the following have been demonstrated:

 

·           the technical feasibility of completing the intangible asset so that it will be available for use or sale

·           the intention to complete the intangible asset and use or sell it

·           the ability to use or sell the intangible asset

·           how the intangible asset will generate probable future economic benefits

·           the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset

·           the ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised, development expenditure is charged to profit or loss in the period in which it is incurred.

 

Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses. Internally generated intangibles not yet in use are subject to annual impairment testing.

 

Internally generated intangible assets are amortised over three to five years. Amortisation commences when the asset is made available for use.

 

Research expenditure is recognised as an expense in the period in which it is incurred.

 

- Intangible assets acquired as part of a business combination

Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset. The cost of such intangible assets is their fair value at the acquisition date and comprises brand names, subscriber lists, certain website development costs and licenses. All intangible assets acquired through business combination are amortised over their useful lives estimated at between 5 and 10 years.

 

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses.

 

- Intangible assets purchased

Intangible assets are purchased when the opportunity arises and capitalised at cost (fair value). Purchased intangible assets are amortised over their useful lives estimated at between 5 and 10 years. Subsequent to initial recognition, purchased intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses.

 

Property, plant and equipment

Property, plant and equipment are recorded at cost net of accumulated depreciation and any provision for impairment. Depreciation is provided using the straight-line method to write off the cost of the asset less any residual value over its useful economic life. The residual values of assets are reviewed annually and revised where necessary.  Assets' useful economic lives are as follows:

 

Leasehold improvements                  The shorter of the useful life of the asset or the term of the lease (1 to 3 years)

Computer equipment                         33% per annum over 3 years

Office equipment                                 20% per annum over 5 years

Right of use lease assets                   The earlier of the end of the useful life of the asset or the end of the lease term

 

 

 

 

Notes to the financial statements (continued)

 

Summary of significant accounting policies (continued)

 

Intangible assets (continued)

 

Impairment

For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.

 

Goodwill, other individual assets or cash-generating units that include goodwill and those intangible assets not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

 

An impairment loss is recognised for the amount by which the carrying amount exceeds the recoverable amount of the asset or cash-generating unit. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. The cashflow evaluations are a result of the Director's estimation of future sales and expenses based on their past experience and the current market activity within the business.  With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.

 

Financial assets

On initial recognition, the Group classifies its financial assets as either financial assets at fair value through profit or loss, at amortised cost or fair value through comprehensive income, as appropriate. The classification depends on the purpose for which the financial assets were acquired. At the reporting year-end the financial assets of the Group were all classified as loans or receivables.

 

Trade receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers but also incorporate other types of contractual monetary assets.

 

They are initially recognised at fair value and measured subsequent to initial recognition at amortised cost using the effective interest method, less any impairment loss.

 

The Group's financial assets comprise trade receivables, other receivables (excluding prepayments) and cash and cash equivalents.

 

Trade and other receivables - impairment

The group applies an expected credit loss model to calculate the impairment losses on its trade receivables.  The group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. Trade receivables at the balance sheet date have been put into groups based on days past the due date for payment and an expected loss percentage has been applied to each group to generate the expected credit loss provision for each group and a total expected credit loss provision has thus been calculated.

 

Financial liabilities

The Group's financial liabilities include trade and other payables and borrowings which include lease liabilities.

 

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest related charges are recognised as an expense in the income statement.

 

Trade payables are recognised initially at their fair value, net of transaction costs and subsequently measured at amortised costs less settlement payments.

 

Notes to the financial statements (continued)

 

Summary of significant accounting policies (continued)

 

Leases

 

Where the group enters into leasing arrangements within the scope of IFRS 16, it recognises right-of-use assets and liabilities as required. Where leases meet the low value or short-term lease exemption, the expense is recognised directly in the income statement.

 

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentive received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

 

Lease payments included in the measurement of the lease liability comprise the following:

-     fixed payments, including in-substance fixed payments,

-     variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date,

-     amounts expected to be payable under a residual value guarantee, and

-     the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments in an optional renewal period if the group is reasonably certain to exercise such an option to extend and penalties for early termination of a lease unless the group is reasonably certain not to terminate early.

 

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the group's estimate of the amount expected to be payable under a residual value guarantee or if the group changes its assessment of whether it will exercise a purchase, extension or termination option.

 

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

 

The group presents right-of-use assets in 'property, plant and equipment' and lease liabilities in 'loans and borrowings' separately on the balance sheet.

 

Income taxes

Current income tax assets and liabilities comprise those obligations to fiscal authorities in the countries in which the Group carries out its operations. They are calculated according to the tax rates and tax laws applicable to the fiscal period and the country to which they relate. All changes to current tax liabilities are recognised as a component of tax expense in the income statement unless the tax relates to an item taken directly to equity in which case the tax is also taken directly to equity. Tax relating to items recognised in other comprehensive income is recognised in other comprehensive income. 

 

Deferred income taxes are calculated using the liability method on temporary differences.  Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases.  However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.  Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.  In addition, tax losses available to be carried forward as well as other income tax credits to the group are assessed for recognition as deferred tax assets.

 

Deferred tax liabilities are always provided for in full. Deferred tax assets such as those resulting from assessing deferred tax on the expense of share-based payments, are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.

Notes to the financial statements (continued)

 

Summary of significant accounting policies (continued)

 

Provisions, contingent liabilities and contingent assets

Provisions are recognised when the present obligations arising from legal or constructive commitment resulting from past events, will probably lead to an outflow of economic resources from the Group which can be estimated reliably.

 

Provisions are measured at the present value of the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the balance sheet date.

 

All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

 

Share based employee compensation

The Group operates equity settled share-based compensation plans for remuneration of its employees.

 

All employee services received in exchange for the grant of any share-based compensation are measured at their fair values. These are indirectly determined by reference to the share options awarded. Their value is appraised at the grant date and excludes the impact of any non-market vesting conditions (e.g. profitability or sales growth targets).

 

All share-based compensation is ultimately recognised as an expense in the income statement with a corresponding credit to the share-based payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. No adjustment to expense recognised in prior periods is made if fewer share options ultimately are exercised than originally estimated.

 

Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value of the shares issued are reallocated to share capital with any excess being recorded as additional share premium.

 

Where modifications are made to the vesting or lapse dates of options the excess of the fair value of the revised options over the fair value of the original options at the modification date is expensed over the remaining vesting period.

 

Dividends

During the year, no dividends (2022: £589k) were paid. The board is not recommending the payment of any further dividends in the current financial year.

 

Final equity dividends to the shareholders of ADVFN plc are recognised in the period that they are approved by shareholders. Interim equity dividends are recognised in the period that they are paid.

 

Dividends receivable are recognised when the Company's right to receive payment is established.

 

 

Equity

Issued capital

Ordinary shares are classified as equity. The nominal value of shares is included in issued capital.

Share premium

The share premium account represents the excess over nominal value of the fair value of consideration received for equity shares, net of the expenses of the share issue.

Share based payment reserve

The share-based payment reserve represents equity settled share-based employee remuneration until such share options are exercised.

Warrant reserve

The warrant reserve represents equity settled warrants granted as part of the open offer in January 2023 until such warrants are exercised.

Foreign exchange reserve

The foreign exchange reserve represents foreign exchange gains and losses arising on translation of investments in overseas subsidiaries into the consolidated financial statements.

Retained earnings

The retained earnings include all current and prior period results for the Group and the post-acquisition results of the Group's subsidiaries as determined by the income statement.

 

 

Notes to the financial statements (continued)

 

Summary of significant accounting policies (continued)

 

Use of key accounting estimates and judgements

Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ from the amounts included in the financial statements. Information about such judgements and estimates is contained in the accounting policies and/or the notes to the financial statements and the key areas are summarised below:

 

Judgements in applying accounting policies

a)      Capitalisation of development costs in accordance with IAS 38 requires analysis of the technical feasibility and commercial viability of the project in the future. This in turn requires a long-term judgement to be made about the development of the industry in which the development will be marketed. Where the directors consider that sufficient evidence exists surrounding the technical feasibility and commercial viability of the project, which indicate that the costs incurred will be recovered they are capitalised within intangible fixed assets. The amount of the capitalisation is based on estimates to judge the percentage of the time relevant staff spend on projects as specific timesheets are not maintained. Where insufficient evidence exists, the costs are expensed to the income statement.

b)      The directors have used their judgement to decide whether the Group should be treated as a going concern and continue in existence for the foreseeable future. Having considered the latest Group forecasts, which cover a period of three years from the balance sheet date, together with the cash resources available to them, the directors have judged that it is appropriate for the financial statements to be prepared on the going concern basis.

c)      The application of IFRS 15 - Revenue from contracts with customers requires an assessment of the elements of the contract to separate potentially bundled services requiring different treatment, the recognition of revenue at the point of performance obligations and the assessment of the correct amount of revenue for each of those obligations.

d)      The directors have used their judgement in the classification of ADVFN Brasil Ltda as a joint operation, rather than a joint venture, based on the historic treatment by both sides of the revenues and expenses incurred, the substance of the arrangement and the share agreement by both parties of the nature of the operating arrangements.

e)      On issuing the warrants related to the rights issue in January 2023, as the warrants were offered to all existing shareholders and therefore, in the directors estimation, these warrants are classified as equity instruments in line with IAS 32.

f)       The directors have used their judgement to assess the valuation of the call option agreed on 3 May 2023 to purchase 50% of ADVFN Brasil Ltda within the next 4 years. Management have considered the future performance of the business and have judged that this will remain out of the money for the remainder of its existence and therefore it has no intrinsic value.

 

Sources of estimation uncertainty

a)      Determining whether goodwill and other intangible assets are impaired requires an estimation of the value in use of the cash generating unit to which the goodwill and intangibles have been allocated. The carrying value of the investments are also assessed. The value in use calculations require an estimation of the future cash flows expected to arise from the cash generating units and a suitable discount rate in order to calculate a suitable present value. During the year, the review of the goodwill led to an impairment of £978,000. For the Company, the review led to an impairment of the investments in Group Companies of £1,000,000.

 

3.      Segmental analysis

 

The directors identify operating segments based upon the information which is regularly reviewed by the chief operating decision maker. The Group considers that the chief operating decision makers are the executive members of the Board of Directors. The Group has identified two reportable operating segments, being that of the provision of financial information and that of other services. The provision of financial information is made via the Group's various website platforms.

 

The parent entities operations are entirely of the provision of financial information.

 

Three minor operating segments, for which IFRS 8's quantitative thresholds have not been met, are currently combined below under 'other'. The main sources of revenue for these operating segments are the provision of financial broking services, financial conference events and other internet services not related to financial information. Segment information can be analysed as follows for the reporting period under review:

 

 


 

Notes to the financial statements (continued)

 

Segmental analysis (continued)

 

2023

Discontinued


 

 

Provision of financial information

Other

Total


Total


£'000

£'000

£'000

£'000

£'000







Revenue from external customers

5,445

-

5,445

16

5,461

Depreciation and amortisation

(266)

-

(266)

(23)

(289)

Other operating expenses

(5,666)

(282)

(5,948)

(306)

(6,254)

Non-recurring iterms

(1,178)

-

(1,178)

-

(1,178)







Segment operating loss

(1,665)

(282)

(1,947)

(313)

(2,260)







Other income

20

-

20

-

20

Interest income

24

-

24

-

24

Interest expense

(11)

-

(11)

-

(11)







Segment assets

6,135

981

7,116

95

7,211

Segment liabilities

(1,784)

(22)

(1,806)

(27)

(1,833)

Purchases of non-current assets

(311)

-

(311)

-

(311)







 

2022

 

Provision of financial information

Other

Total


£'000

£'000

£'000





Revenue from external customers

7,796

52

7,848

Depreciation and amortisation

(405)

(32)

(437)

Other operating expenses

(9,338)

551

(8,787)

Other operating income

-

-

-





Segment operating (loss)/profit

(1,947)

571

(1,376)





Interest income

-

-

-

Interest expense

(14)

-

(14)





Segment assets

1,718

1,896

3,614

Segment liabilities

(2,232)

(58)

(2,290)

Purchases of non-current assets

155

-

155

 

Revenue recognition per IFRS 15

 

Point in time

Over time

Total


£'000

£'000

£'000





Revenue during 2022

4,183

3,668

7,851

Revenue during 2023

2,384

3,077

5,461






 

Notes to the financial statements (continued)

 

Segmental analysis (continued)

 

The Group's revenues from all operations, which wholly relate to the sale of services, from external customers and its non-current assets, are divided into the following geographical areas:

 

Revenue

Non-current assets

Revenue

Non-current assets


2023

2023

2022

2022


£'000

£'000

£'000

£'000


 

 



UK (domicile)

2,651

1,184

3,198

1,172

USA

2,659

983

4,525

1,064

Other

151

-

125

-







5,461

2,167

7,848

2,236






Revenues are allocated to the country in which the customer resides. During both 2023 and 2022 no single customer accounted for more than 10% of the Group's total revenues.

 

 

4.      Operating loss

 

2023

2022

Operating loss has been arrived at after charging:

£'000

£'000


 


Foreign exchange loss/(gain)

7

(2)

Depreciation and amortisation:



Depreciation of property, plant and equipment:

75

181

Amortisation of intangible assets from continuing and discontinued operations

214

256


 


Employee costs (Note 5)

2,837

4,650




Lease payments on land and buildings (Note 22)

91

103

Audit and non-audit services:



Fees payable to the company's auditor for the audit of the Group's annual accounts

87

45

 

Remuneration of key senior management for Group and Company

2023

2022


£'000

£'000

Key senior management comprises only directors

 


Salary and fees

697

1,502

Compensation for loss of office

-

831

Benefits in kind

-

-

Annual bonus

-

80

Share based payments

1

-

Post-employment benefits - defined contribution pension plans

6

60





704

2,473

 

Highest paid director



Salary and fees

200

381

Compensation for loss of office

-

831

Benefits in kind

-

-

Annual bonus

-

25

Share based payments

1

-

Post-employment benefits - defined contribution pension plans

-

24





201

1,261

 

Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report

on page 16.

 


 

Notes to the financial statements (continued)

 

5.             Employees

 

GROUP

 

2023

2022


£'000

£'000

Employee costs (including directors):

 


Wages and salaries

2,581

3,325

Compensation for loss of office

-

831

Annual bonus

-

80

Social security costs

224

309

Pension costs

31

105

Share based payments

1

-





2,837

4,650



 

The average number of employees during the year was made up as follows:


 



 

Development

4

10

Sales and Administration

27

30





31

40

 

COMPANY


2023

2022



£'000

£'000

Employee costs (including directors):


 


Wages and salaries


1,359

2,140

Compensation for loss of office


-

831

Social security costs


135

225

Pension


28

103

Share based payments


1

-







1,523

3,299





The average monthly number of employees during the year was as follows:




Development


3

4

Sales and Administration


13

15







16

19





Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report

on page 16.

 

6.             Non-recurring items

 

GROUP AND COMPANY

 

2023

2022


£'000

£'000


 


Write off goodwill related to IHUB

978

-

Exceptional corporate and shareholder activity

        -

        252

Costs relating to the exit of directors

200

1,114

Early termination costs

-

54


1,178

1,420

 

In the year ended 30 June 2022, the company went through a period of shareholder and management changes, during which time the company incurred legal and advisory fees. The culmination of the activity was the resignation of Mr Clement Chambers, for which the company incurred further fees in relation to his exit.

 

The company also chose to vacate the Throgmorton Street offices in this financial year and incurred early termination costs on this lease.

 

In the current year the goodwill on the investment in IHUB was impaired during the review of the valuation of the investments. There were further legal fees incurred relating to the exit of the previous directors.

 

 

 

Notes to the financial statements (continued)

 

7.             Finance income and expense

 

GROUP

 

2023

2022


£'000

£'000


 


Finance income:

 


Bank interest

24

-

Finance expense

 


Lease interest

(4)

(10)

Bank interest

(7)

(4)

 

8.             Income tax expense

 

GROUP

 

2023

2022


£'000

£'000

 

 


Current Tax:

 


UK corporation tax on profits for the year

(58)

(24)

Adjustments in respect of prior periods


-




Total current taxation

(58)

(24)




Deferred tax



Origination and reversal of timing differences

88

84

Carried forward losses (DTA)

(88)

(84)

Effect of rate change



Taxation

(58)

(24)

 

Income tax expense (continued)

 

The tax assessed for the year is different from the standard rate of corporation tax as applied in the respective trading domains where the Group operates. The differences are explained below:

 

2023

2022


£'000

£'000


 


Loss before tax from total operations

(2,227)

(1,782)

Loss before tax multiplied by the respective standard rate of corporation tax applicable in the UK (19.00%) (2021: 19.00%)

 

(423)

 

(339)




Effects of:



Non-deductible expenses

178

434

Capital allowances

(25)

(9)

Carried forward losses utilised against profits

-

(27)

Enhanced Research & Development expenditure

(43)

(18)

Surrender of tax losses for R & D tax credit

77

27

Current year R&D tax credit

(58)

(24)

Effect of discontinued operations

60

-

Effect of difference in tax rates

(21)

63

Consolidation adjustments - no tax effect

197

(131)




Tax credit for the year

(58)

(24)

 


 

Notes to the financial statements (continued)

 

9.             Loss per share

12 months to

 30 June

12 months to

 30 June


2023

2022


£'000

£'000


 


Loss for the year attributable to equity shareholders from continuing operations

(1,856)

(1,368)




Loss for the year attributable to equity shareholders from total operations

(2,169)

(1,368)




Weighted average number of shares



Number of shares in issue prior to rights issue (prior year: weighted average)

26,315,318

26,184,360

Correction for deemed rights issue

169,179

174,021




Deemed number of shares before rights issue

26,484,497

26,358,381




Weighted average shares



26,484,497 x 188/365 (prior to rights issue)

13,641,330

-

46,004,758 x 177/365 (post rights issue)

22,309,157

-




Total weighted average number of shares

35,950,487

26,358,381




Loss per share for the year attributable to equity shareholders from continuing operations:



Basic

(5.16p)

(5.19p)

Diluted

(5.16p)

(5.19p)




Total loss per share for the year attributable to equity shareholders:



Basic

(6.03p)

(5.19p)

Diluted

(6.03p)

(5.19p)




Basic and diluted loss per share as previously stated

-

(5.22p)

 

Where a loss has been recorded for the year the diluted loss per share does not differ from the basic loss per share.

 

Where a profit has been recorded but the average share price for the year remains under the exercise price the existence of options is not normally dilutive. However, whilst the average exercise price of all outstanding options is above the average share price there are a number of options which are not. Under these circumstances those options where the exercise price is below the average share price are treated as dilutive.

 

During the current year, the company made a rights issue (Note 20). The prior year earnings per share has been restated to allow for the effect of this rights issue.

 

 


 

Notes to the financial statements (continued)

 

10.          Property, plant and equipment

 

GROUP

 

Leasehold property improvements

Computer equipment

Office equipment

Right of use lease assets

Total


£'000

£'000

£'000

£'000

£'000

Cost






At 1 July 2021

48

403

270

349

1,070

Additions

-

32

7

-

39

FX difference

-

-

31

-

31







At 30 June 2022

48

435

308

349

1,140







Additions


132

4


136

Disposal




(349)

(349)

FX difference



(11)


(11)







At 30 June 2023

48

567

301

-

916







Depreciation






At 1 July 2021

48

339

266

178

831

Charge for the year

-

72

11

98

181

FX difference

-

-

30

-

30







At 30 June 2022

48

411

307

276

1,042







Charge for the year

-

2

-

73

75

Disposal

-

-

-

(349)

(349)

FX difference

-

-

(12)

-

(12)







At 30 June 2023

48

413

295

-

756







Net book value






At 30 June 2023


154

6

-

160

At 30 June 2022

-

24

1

73

98







 

Charge over assets

 

A fixed and floating charge is held by Barclays Bank which covers all the property and undertakings of the company against the provision of any loan, debenture or other bank liability.

Notes to the financial statements (continued)

 

Property, plant and equipment (continued)

 

COMPANY

 

Leasehold property improvements

Computer equipment

Office equipment

Total


£'000

£'000

£'000

£'000

Cost





At 1 July 2021

48

398

106

552

Additions

-

32

-

32

Disposals

-

-

-

-





At 30 June 2022

48

430

106

584






Additions

-

133

-

133






At 30 June 2023

48

563

106

717





Depreciation





At 1 July 2021

48

334

106

488

Charge for the year

-

72

-

72






At 30 June 2022

48

406

106

560






Charge for the year

-

3

-

3






At 30 June 2023

48

409

106

563





Net book value





At 30 June 2023

-

154

-

154

At 30 June 2022

-

24

-

24





 

11.          Goodwill

 

GROUP



£'000





At 1 July 2021



870

Exchange differences



118





At 30 June 2022



988





Exchange differences



(10)

Impairment



(978)





At 30 June 2023



-





The goodwill carried in the balance sheet is attributable to InvestorsHub.com Inc.

 

Impairment testing - InvestorsHub.com Inc.

 

A discount rate of 10% has been used for impairment testing based on the estimated likely rate of debt financing for the company. The key assumptions utilised within the forecast model relate to the level of future sales. Increases have been estimated at between 0% and 5%. The closing exchange rate of $1.24/£ has been used (2022: $1.25/£). The value in use calculations indicate that InvestorsHub.com Inc. has a recoverable amount of less than the value of the investment, therefore the goodwill has been impaired.

 


 

Notes to the financial statements (continued)

 

12.          Other intangible assets

 

GROUP

Licences

Brands & subscriber lists

Website development costs

Mobile application

Software

Crypto-currencies

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

Cost or valuation






 

 







 

 

At 1 July 2021

162

2,129

2,475

10

477

-

5,253

Additions

-

-

74

-

39

1

114

Disposals

-

-

-

-

(296)

-

(296)









At 30 June 2022

162

2,129

2,549

10

220

1

5,071

Additions

-

-

175

-

-

-

175

Disposals

-

-

-

-

(220)

-

(220)









At 30 June 2023

162

2,129

2,724

10

-

1

5,026









Amortisation
















At 1 July 2021

162

2,129

1,308

10

82

-

3,691

Charge for the year

-

-

223

-

33

-

256

Disposals

-

-

-

-

-

-

-









At 30 June 2022

162

2,129

1,531

10

115

-

3,947

Charge for the year

-

-

191

-

23

-

214

Disposals

-

-

-

-

(138)


(138)









At 30 June 2023

162

2,129

1,722

10

-

-

4,023









Net book value








At 30 June 2023

-

-

1,002

-

-

1

1,003

At 30 June 2022

-

-

1,018

-

105

1

1,124









 

Website development costs, mobile applications and software are internally generated assets. There are no components of these that are 'under construction'.

 

The £214k amortisation in the year represents £191k of amortisation for continuing operations and £23k on software for discontinued operations.

 

All additions are internally generated by capitalisation of development work on websites and software projects.

 

The directors are satisfied that no indication of impairment exists in respect of these assets.

 

Notes to the financial statements (continued)

 

Other intangible assets (continued)

 

COMPANY

 


Licenses

Mobile application

Website development

Crypto-currencies

Total



£'000

£'000

£'000

£'000

£'000

Cost














At 1 July 2021


100

10

2,062

-

2,172

Additions


-

-

74

1

75

Disposals


-

-

-

-

-








At 30 June 2022


100

10

2,136

1

2,247

Additions


-

-

175

-

175

Disposals


-

-

-

-

-








At 30 June 2023


100

10

2,311

1

2,422








Amortisation














At 1 July 2021


100

10

1,680

-

1,790

Charge for the year


-

-

223

-

223

Disposals


-

-

-

-

-








At 30 June 2022


100

10

1,903

-

2,013

Charge for the year


-

-

191

-

191

Disposals


-

-

-

-

-








At 30 June 2023


100

10

2,094

-

2,204








Net book value







At 30 June 2023


-

-

217

1

218

At 30 June 2022


-

-

233

1

234








 

Website development costs and mobile applications are internally generated assets. There are no components of these that are 'under construction'.

 

All additions are internally generated by capitalisation of development work on websites and software projects.

 

The directors are satisfied that no indication of impairment exists in respect of these assets.

 

 


 

Notes to the financial statements (continued)

 

13.          Subsidiary companies consolidated in these accounts

 

COMPANY



Subsidiaries




£'000

 


 


At 1 July 2021


 

2,276

Impairment


 

(1,275)





30 June 2022



1,001





Impairment



(1,000)

Write offs



(1)





30 June 2023



-

 




 

A discount rate of 10% has been used for impairment testing based on the estimated likely rate of debt financing for the company. The key assumptions utilised within the forecast model relate to the level of future sales. Increases have been estimated at between 0% and 5%. The closing exchange rate of $1.24/£ has been used (2022: $1.25/£). The value in use calculations indicate that InvestorsHub.com Inc. has a negative headroom compared to an investment by ADVFN of £1,000,000. The Company's investment in InvestorsHub.com has therefore been impaired in full. In future years this will be reassessed should indications show that the impairment loss recognised may no longer exist

 

As part of the strategic realignment of the company, the decision was made to cease trading in Cupid Bay Limited, MJAC InvestorsHub International Conferences Limited and All IPO Plc during the year. These companies, as well as a number of dormant companies noted below are in the process of being liquidated and struck off.

 

 

Country of incorporation

% interest in

 ordinary shares

Principal activity

Registered address



30 June 2022





 



Cupid Bay Limited (Strike off applied for on 22 August 2023)

England & Wales

100.00

Internet dating web site

Suite 28 Ongar Business Centre, The Gables, Ongar, England, CM5 0GA

Fotothing Limited

England & Wales

100.00

Dormant

As Cupid Bay Limited

NA Data Inc.

USA

100.00

Office services

P.O. Box 780

Harrisonville Mo. 64701

InvestorsHub.com Inc.

USA

100.00

Financial information web site

As NA Data Inc.

ADVFN Brazil Limited

England & Wales

100.00

Dormant

As Cupid Bay Limited

E O Management Limited

(Strike off applied for on 2 May 2023)

England & Wales

100.00

Dormant

As Cupid Bay Limited

Throgmorton Street Capital Limited (Strike off applied for on 26 May 2023)

England & Wales

100.00

Dormant

As Cupid Bay Limited

Advessel Limited

(Strike off applied for on 2 May 2023)

England & Wales

100.00

Dormant

As Cupid Bay Limited

All IPO Plc (Strike off applied for on 4 December 2023)

England & Wales

100.00

Brokerage and software development

As Cupid Bay Limited

Writer Pub Limited

(Strike off applied for on 2 May 2023)

England & Wales

100.00

Dormant

As Cupid Bay Limited

MJAC InvestorsHub International Conferences Limited (Strike off applied for on 22 August 2023)

England & Wales

100.00

Dormant

As Cupid Bay Limited

 

The subsidiary companies All IPO Plc, Cupid Bay Limited and MJAC InvestorsHub International Conferences Ltd are exempt from audit under s479A of the Companies Act 2006.

 

 

Notes to the financial statements (continued)

 

14.          Deferred tax

 

GROUP

The following are the major deferred tax liabilities and assets recognised by the Group and the movements thereon during the current and prior periods:

Intangible assets

Website development & software costs

US temporary differences

UK tax losses

Total


£'000

£'000

£'000

£'000

£'000






 

At 30 June 2021

-

(303)


303

-

Credit/(charge) to profit or loss

-

(84)

-

84

-






 

At 30 June 2022

-

(387)

-

387

-

Credit/(charge) to profit or loss


(88)


88

-






 

At 30 June 2023


(475)

 

475

-

 

Deferred tax in ADVFN Plc amounted to £88,600 and nil in subsidiary companies. The deferred tax liability for the temporary difference has been recognised at 25% as per the future tax rate which has increased the deferred tax liability by £22,000. The deferred tax asset for the losses has also been recognised at 25% as per the future tax rate.

 

 

Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances, after offset, for the purposes of financial reporting:

 

2023

2022


£'000

£'000


 


Deferred tax liabilities

 


-       Website development & software costs

(88)

(84)

-       US temporary differences


-

Deferred tax assets



-       Intangible assets


-

-       UK tax losses

88

84





-

-




 

At the balance sheet date the Group had unused tax losses of £5,802,000 (2022: £5,340,000) available for offset against future profits. The Group has surrendered losses of £403,000 for the R&D tax credit for the year. A deferred tax asset has been recognised in respect of £350,000 (2022: £338,000) of such losses, as these losses would offset any taxable profits arising as a result of the unwinding of the deferred tax liability in respect of website development costs. No deferred tax asset has been recognised in respect of the remaining £5,452,000 (2022: £5,002,000) due to the unpredictability of future profit streams. Substantially all of the losses may be carried forward indefinitely.

 

 

COMPANY

 

The Deferred Tax Liability in the ADVFN company is due to the temporary difference between the accounting base and tax base for the Intangible - Website development, temporary difference £217,000 and deferred tax liability £54,000 and for Computer Equipment, temporary difference £134,000 and deferred tax liability £34,000.

 

Notes to the financial statements (continued)

 

15.          Trade and other receivables

 

GROUP

 

2023

2022


£'000

£'000


 

 

Non-current assets

 


Other receivables

25

26







Current assets



Trade receivables - gross

257

320

Less: provision for impairment - expected loss

(14)

(18)

Less: provision for impairment - specific

(9)

(2)

Trade receivables - net

234

300

Prepayments and accrued income

124

130

Other receivables

26

6

Recoverable corporation tax

82

24




Total trade and other receivables

466

460




The ageing of trade receivables is as follows:

 

2023

2022


£'000

£'000


 


Not past due and not impaired

192

222

Past due but not impaired

56

96

Past due and fully impaired

9

2

Trade receivables - gross

257

320




 

Not past due and not impaired

192

222

Past due but not impaired:



Up to 30 days

28

-

31 to 60 days

1

12

61 to 90 days

15

30

Over 90 days

12

54


56

96

Receivables not impaired

248

318

Past due but fully impaired

9

2

Less impairment provision

(23)

(20)

Trade receivables - net

234

300




 

Provision for impairment:

2023

2022


£'000

£'000


 


Opening

20

17

Movement in the year

3

3

Closing

23

20




 

The Directors consider that the carrying amount of trade and other receivables in both the Group and Company is approximately equal to their fair value.

 

 

 

Notes to the financial statements (continued)

 

COMPANY

 

2023

2022


£'000

£'000


 

 

Non-current assets

 


Other receivables

25

24







Current assets



Trade receivables - gross

123

175

Less: provision for impairment - expected loss

(7)

(8)

Less: provision for impairment - specific

(9)

(2)

Trade receivables - net

107

165

Prepayments and accrued income

102

97

Other receivables

21

-

Recoverable corporation tax

82

24

Amounts owed by Group undertakings

-

500




Total trade and other receivables

313

786




The ageing of trade receivables is as follows:

 

2023

2022


£'000

£'000


 


Not past due and not impaired

84

133

Past due but not impaired

30

40

Past due and fully impaired

9

2

Trade receivables - gross

123

175




 

Not past due and not impaired

84

133

Past due but not impaired:



Up to 30 days

21

-

31 to 60 days

-

5

61 to 90 days

7

14

Over 90 days

11

21


39

40

Receivables not impaired

114

173

Past due and fully impaired

9

2

Less impairment provision

(16)

(10)

Trade receivables - net

107

165




 

Provision for impairment:

2023

2022


£'000

£'000


 


Opening

10

11

Movement in the year

6

(1)

Closing

16

10




The Directors consider that the carrying amount of trade and other receivables in both the Group and Company is approximately equal to their fair value.

 

 


Notes to the financial statements (continued)

 

16.          Credit quality of financial assets

 

An impairment provision has been calculated on the basis of expected credit losses ("ECL") as required under IFRS 9.

 

GROUP

As of 30 June 2023, trade receivables of £56,000 (2022: £96,000) were past due but not impaired (see note 15). These relate to a number of independent customers for whom there is no recent history of default.

 

Expected credit loss provision

2023

2022


£'000

%

£'000

£'000




 


Not past due

192

1%

2

222

Not more than 3 months

28

5%

2

42

More than 3 months but not more than 6 months

1

15%

-

21

More than 6 months but not more than 1 year

15

25%

4

24

More than 1 year

12

50%

6

9







248


14

318






Impaired receivables allowance account

 

2023

2022

Specific provision

£'000

£'000

 

 


At 1 July

2

7

Utilised during the year

(3)

(12)

Created during the year

10

7




At 30 June

9

2

 



 



 

The carrying amount of the Group's trade receivables is denominated in the following currencies:

 

2023

2022


£'000

£'000


 


Sterling

62

135

Euro

3

1

US dollar

169

164





234

300




 

Notes to the financial statements (continued)

 

Credit quality of financial assets (continued)

 

COMPANY

As of 30 June 2023, trade receivables of £30,000 (2022: £40,000) were past due but not impaired (see note 15). These relate to a number of independent customers for whom there is no recent history of default.

 

Expected credit loss provision

2023

2022


£'000

%

£'000

£'000




 


Not past due

84

1%

1

133

Not more than 3 months

18

5%

1

19

More than 3 months but not more than 6 months

-

15%

-

5

More than 6 months but not more than 1 year

3

25%

1

13

More than 1 year

9

50%

4

3







114


7

173






Impaired receivables allowance account

 

2023

2022

Specific provision

£'000

£'000

 

 


At 1 July

2

5

Utilised during the year

(3)

(10)

Created during the year

10

7




At 30 June

9

2

 

The carrying amount of the Company's trade receivables is denominated in the following currencies:

 


2023

2022



£'000

£'000



 


Sterling


70

122

Euro


3

1

US dollar


34

42







107

165





 

Notes to the financial statements (continued)

 

17.          Interest bearing borrowings

 

Bank loans

As a result of the COVID-19 pandemic the Directors considered it prudent to take further steps to ensure that short term cashflow did not present a problem for the Group. Short term finance offered under the Business Bounce Back loan scheme provided an additional layer of protection whilst the economy rides out the effects of the pandemic. The UK loan is charged at 2.5% over 6 years with an interest and payment free period for the first 12 months.

 

Lease liabilities

The carrying value of the lease liabilities is included in the borrowing classification. There are no leases carried in the Company. For further details please see Note 22.

 

GROUP

2023

2022


£'000

£'000

Non-current

 


Bank loans

20

41





20

41




Brought forward

41

141

Cash flows

(22)

(103)

Interest and fees

1

3




As at 30 June

20

41




Current



Bank loans

10

13

Lease liability

-

87




 

10

100

 



Brought forward

100

116

Cash flows

(94)

(25)

Interest and fees

4

9




As at 30 June

10

100

 

Notes to the financial statements (continued)

 

Interest bearing borrowings (continued)

 

COMPANY

2023

2022


£'000

£'000

Non-current

 


Bank loans

20

41










Brought forward

41

54

Cash flows

(20)

(14)

Interest and fees

1

1




As at 30 June

20

41




Current



Bank loans

10

13




 



 



Brought forward

13

-

Cash flows

(4)

-

Interest and fees

1

-




As at 30 June

10

13

 

Changes in liabilities arising from financing activities

 

GROUP

2022

Cash movements

Non-cash movements

2023


£'000

£'000

£'000

£'000


 

 

 

 

Long term borrowing

54

(25)

1

30






Lease liabilities

87

(91)

4

-






 

COMPANY

2022

Cash movements

Non-cash movements

2023


£'000

£'000

£'000

£'000


 

 

 

 

Long term borrowing

54

(25)

1

30








Notes to the financial statements (continued)

 

18.          Financial instruments

 

GROUP

Categories of financial instrument

2023

2022


£'000

£'000

Non-current

 


Trade and other receivables - at amortised cost 

25

26




Current



Trade and other receivables - at amortised cost

260

306

Trade and other receivables - non-financial assets

148

130





408

436




Cash and cash equivalents

5,557

915




Financial assets

5,817

1,221




Non-current



Borrowings

20

41




Current



Borrowings

10

100




Trade and other payables - at amortised cost

1,136

1,184

Trade and other payables - non-financial liabilities

767

964





1,903

2,148


 


Financial liabilities

1,146

1,284


 


COMPANY

Categories of financial instrument

2023

2022


£'000

£'000

Non-current

 


Trade and other receivables - at amortised cost 

25

24




Current



Trade and other receivables - at amortised cost 

107

848

Trade and other receivables - non-financial assets

111

96





209

944




Cash and cash equivalents

5,301

529




Financial assets

5,408

1,376




Non-current



Borrowings

20

41




Current



Borrowings

10

13




Trade and other payables - at amortised cost

1,073

1,411

Trade and other payables - non-financial liabilities

667

837





1,740

2,248




Financial liabilities

1,083

1,424




 

Notes to the financial statements (continued)

 

19.          Trade and other payables

 

GROUP

 

2023

2022


£'000

£'000

 

 


Trade payables

771

849

Social security and other taxes

119

191

Accrued expenses and deferred income

882

1,074

Other payables

131

34





1,903

2,148




 

COMPANY



2023

2022

 

 


£'000

£'000


 




Trade payables

 


758

801

Other tax and social security

 


112

166

Accruals and deferred income

 


761

941

Other payables

 


109

8

Amounts owed to Group undertakings

 


-

332


 





 


1,740

2,248


 




 

 

 

20.          Share capital

 

GROUP AND COMPANY



 

Shares

£'000

Issued, called up and fully paid Ordinary shares of £0.002 each



 



At 30 June 2022

26,315,319

53

Share issued

19,689,439

39




At 30 June 2023

46,004,758

92







 
Shares issued

On 6 December 2022, the company proposed an equity fundraise whereby qualifying existing shareholders were able to subscribe for new shares at an issue price of £0.33 on the basis of 11 offer shares for every 14 existing ordinary shares. Under the issue, open offer warrants were issued to the qualifying shareholders in relation to the purchase of shares on the basis of one warrant for every 3 open offer shares. The warrants may be exercised from the date of issue until 6 December 2026 at a price of £0.60 per share. On 6 January 2023 13,708,380 shares were admitted to the London Stock Exchange as a result of this open offer. A further 5,981,059 shares were admitted on 14 March 2023 after FCA approval. A total of £6.5m was raised and 6,563,123 warrants were created.

 
 
Share price

The market value of the shares at 30 June 2023 was 21.00p (2022; 51.00p). The range during the year was 20.5p to 57.5p (2022; 49.00p to 87.20p). Shareholders are entitled to one vote per Ordinary share held and dividends will be apportioned and paid proportionately to the amounts paid up on the Ordinary shares held.

Notes to the financial statements (continued)

 

21.          Share based payments

 

GROUP AND COMPANY

 

The Group uses share options as remuneration for services of employees. The fair value is expensed over the remaining vesting period.

The fair value of options granted after 7 November 2002 has been arrived at using the Black-Scholes model. The assumptions inherent in the use of this model are as follows:

 

§    The option life is assumed to be at the end of the allowed period

§   There are no vesting conditions which apply to the share options/warrants other than continued service up to 3 years.

§    No variables change during the life of the option (e.g. dividend yield must be zero).

§    Volatility has been calculated over the 3 years prior to the grant date by reference to the daily share price.

 

Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:

 

2023 WAEP


 


Number

Price (£)


 

 

Outstanding at the beginning of the year

1,351,473

0.4437

Granted during the year

530,000

0.33

Exercised during the year

-

-

Expired during the year

(1,251,473)

0.3570




Outstanding at the year end                         

630,000

0.3333




Exercisable at the year end

630,000

0.3333

 

 

2022 WAEP




Number

Price (£)




Outstanding at the beginning of the year

1,751,473

0.4100

Granted during the year

-

-

Exercised during the year

(200,000)

0.4125

Expired during the year

(200,000)

0.7950




Outstanding at the year end                         

1,351,473

0.4437




Exercisable at the year end

1,351,473

0.4437




 

Notes to the financial statements (continued)

 

Share based payments (continued)

 

The options outstanding at the year-end are set out below:

 

Expiry date

Exercise


2023

2022


Price (£)



Share options

Remaining life (years)

Share options

Remaining life (years)

10 year expiry




 

 



31 December 2022

0.1400

Options


-

-

80,000

0.5

31 December 2022

0.1400

Options


-

-

80,000

0.5

31 December 2022

0.1400

Options


-

-

120,000

0.5

31 December 2022

0.1400

Options


-

-

31,473

0.5

12 December 2024

0.1400

Options


-

-

500,000

2

12 December 2024

0.7950

Options


-

-

300,000

2

24 November 2027

0.4750

Options


50,000

4

50,000

4

24 November 2027

1.0000

Options


50,000

4

50,000

4

7 year expiry




 

 



12 December 2024

0.4375

Options


-

-

60,000

2

12 December 2024

0.3125

Options


-

-

80,000

2

3 year expiry




 

 



8 June 2026

0.33

Options


530,000

3

-

-





 

 







630,000

 

1,351,473

2






 



 

The total expense recognised during the year by the Group, for all schemes, was £1,000 (2022: £Nil).

 

During the year the value of the lapsed options of £320,000 was released to the income statement from the share-based payment reserve.

 

Notes to the financial statements (continued)

 

22.          Lease liabilities

 

Property, plant and equipment comprises owned and leased assets.

 

GROUP

 


2023

2022

 


£'000

£'000

 




Property, plant and equipment - owned


-

25

Right-of-use assets except for investment property


-

73




98

Right-of-use assets




The group leases office buildings:




Balance at 1 July


73

171

Additions in the year


-

-

Depreciation charge for the year


(73)

(98)

Balance at 30 June


-

73





Lease Liability




Maturity analysis - contractual discounted cash flows




Within one year


-

87

Two to five years


-

-

Over five years


-

-

Total lease liabilities at 30 June


-

87





 


2023

2022



£'000

£'000

Lease liabilities per the balance sheet




As at 30 June




Current


-

87

Non-current


-

-



-

87





Amounts recognised in profit or loss




Interest on lease liabilities


5

11





Amounts recognized in the statement of cashflows




Total cash outflow for leases


103

103





 

 

Notes to the financial statements (continued)

 

23.          Financial risk management

 

The Group and Company's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. This year the Group and Company are also exposed to global inflation risks. All companies within the group apply the same risk management programme. Overall, this focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. Risk management is carried out by the Board and their policies are outlined below.

 

a)    Market risk

 

Foreign exchange risk

The Group is exposed to translation and transaction foreign exchange risk as it operates within the USA and other countries around the world and therefore transactions are denominated in Sterling, Euro, US Dollars and other currencies. The Group policy is to try and match the timing of the settlement of sales and purchase invoices so as to eliminate, as far as possible, currency exposure. During the year, the weakening of Sterling has decreased the impact of movements in US Dollars.

 

The Group does not currently hedge any transactions and therefore there are no open forward contracts. Foreign exchange differences on retranslation of foreign currency monetary assets and liabilities are taken to the income statement.

 

GROUP

 

The carrying value of the Group's foreign currency denominated assets and liabilities are set out below:

 


2023

2022

 



Assets

Liabilities

Assets

Liabilities




£'000

£'000

£'000

£'000




 

 



US Dollars



3,118

297

1,448

468

Euros



17

120

28

59

Yen



9

-

18

-

Other



-

-

-

11











3,144

417

1,494

538








 

COMPANY

 

The carrying value of the Company's foreign currency denominated assets and liabilities are set out below:

 


2023

2022

 



Assets

Liabilities

Assets

Liabilities




£'000

£'000

£'000

£'000




 

 



US Dollars



1,683

162

726

199

Euros



18

120

28

59

Yen



6

-

18

-

Other



-

22

-

11











1,707

304

772

269








 

Notes to the financial statements (continued)

 

Financial risk management (continued)

 

Foreign exchange risk (continued)

 

The majority of the group's financial assets are held in Sterling but movements in the exchange rate of the US Dollar and the Euro against Sterling have an impact on both the result for the year and equity. The Group considers its most significant exposure is to movements in the US Dollar.

 

Sensitivity to reasonably possible movements in the US Dollar exchange rate can be measured on the basis that all other variables remain constant. The effect on profit and equity of strengthening or weakening of the US Dollar in relation to sterling by 10% would result in a movement of:

Group:  ±£122,000 (2022: ±£50,000).

Company:  ±£165,000 (2022: ±£57,000).

 

Interest rate risk

The Group carries borrowings which are at fixed interest rates and as a result the directors consider that there is no significant interest rate risk.

 

b)    Credit risk

 

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. In order to minimise this risk, the Group endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amount:

Group:  £433,000 (2022: £1,325,000).

Company:   £1,849,000 (2022: £1,473,000).

 

Provision of services by members of the Group results in trade receivables which the management consider to be of low risk, other receivables are likewise considered to be low risk. The management do not consider that there is any concentration of risk within either trade or other receivables. The receivables are due from companies whose credit performance is constantly monitored and, if an amount becomes overdue, immediate action is taken to obtain payment. The population of clients is diverse, and this ensures no concentration of risk with any specific customer. A default is assumed and actioned when the Directors believe it will not be possible to obtain payment for the service supplied. This is not generally measured exclusively on the overdue period but judged on the basis of prior experience and the dialogue with the customer that follows the recognition of an overdue payment. For additional information on receivables see note 15.

 

Credit risk on cash and cash equivalents is considered to be small as the counterparties are all substantial banks with high credit ratings. The maximum exposure is the amount of the deposit.

 

c)    Liquidity risk

The Group currently holds cash balances in Sterling, US Dollars and Euros to provide funding for normal trading activity. The Group also has access to additional equity funding, and, for short term flexibility, overdraft facilities would be arranged with the Group's bankers. Trade and other payables are monitored as part of normal management routine. Liabilities are disclosed as follows:

 

Notes to the financial statements (continued)

 

Financial risk management (continued)

 

Liquidity risk (continued)

 

GROUP

 

2023

Within 1 year

One to two years

Two to five years

Over five years


£'000

£'000

£'000

£'000






Trade payables

771

-

-

-

Accruals

236

-

-

-

Other payables

131

-

-

-






 

2022

Within 1 year

One to two years

Two to five years

Over five years


£'000

£'000

£'000

£'000


 




Trade payables

849

-

-

-

Accruals

303

-

-

-

Other payables

32

-

-

-






COMPANY

 

2023

Within 1 year

One to two years

Two to five years

Over five years


£'000

£'000

£'000

£'000






Trade payables

758

-

-

-

Accruals

207

-

-

-

Other payables

109

-

-

-






 

2022

Within 1 year

One to two years

Two to five years

Over five years


£'000

£'000

£'000

£'000


 




Trade payables

801

-

-

-

Accruals

272

-

-

-

Other payables

8

-

-

-

Amounts owed to Group undertakings

332

-

-

-






 

 

d)    Capital risk management

 

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in a volatile and tight credit economy.

The Group will also seek to minimise the cost of capital and attempt to optimise the capital structure, which currently means maintaining equity funding and keeping debt levels to insignificant amounts of lease funding. Share capital and premium together amount to £6,768,000.

During the year, the Group did not pay a dividend to shareholders (2022: £589k). The Group continues to plan for growth, and it will continue to be important to maintain the Group's credit rating and ability to borrow should acquisition targets become available.

Capital for further development of the Group's activities will, where possible, be achieved by share issues and not by carrying significant debt.

 


Notes to the financial statements (continued)

 

Financial risk management (continued)

 

e)    Inflation risk

 

Inflation risk refers to the risks posed to the Group due to rising inflation. This increase in inflation could lead to increasing costs and potentially decreasing revenue as companies seek to decrease their own costs. Management have considered these factors in preparing their going concern forecasts and will continue to monitor the level of expenses and revenue going forward.

 

24.          Capital commitments

 

GROUP AND COMPANY

 

At 30 June 2023 neither the Group nor the Company had any capital commitments (2022: £Nil).

 

 

25.          Related party transactions

 

GROUP

 

The remuneration paid to Directors is disclosed on page 16 of the Directors' Report; there were no other related party transactions. Transactions with related parties were carried out on an arm's length basis.

 

COMPANY

 

The remuneration paid to Directors is disclosed on page 16 of the Directors' Report; there were no other related party transactions. Transactions with related parties were carried out on an arm's length basis.

 

 

26.          Events after the balance sheet date

 

In September 2023 the Group set up a new subsidiary in Israel as part of the new strategic direction.

 

Since the balance sheet date, in line with the strategic plans for the business, an application for strike off has been submitted for CupidBay Limited, MJAC InvestorsHub International Conferences Limited and All IPO Plc.

 

In September 2023, 180,000 share options were granted to vest over a three-year period.

 

 

27.          Accounts

 

Copies of these accounts are available from the Company's registered office at Suite 28, Ongar Business Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA or from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.

 

www.companieshouse.gov.uk

 

and from the ADVFN plc website:

 

www.ADVFN.com

 

ENDS

 

 

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