Half-year Report

RNS Number : 6091H

ADVFN PLC

25 March 2020

 

 

25 March 2020

For immediate release

ADVFN PLC

("ADVFN" or the "Group")

Unaudited Interim Results for the Six Months Ended 31 December 2019

ADVFN today announces its unaudited interim results for the six months ended 31 December 2019 (the "Period").

Chief Executive's Statement

As previously reported, sales during the first half were generally flat, although in the lead up to Brexit, advertising sales volumes were below management's expectations while traffic levels and subscription levels remained unaffected. The impact of this lower than expected advertising demand in the first half can be seen in the reported loss, which is further increased by higher overheads which represented an effort to grow sales during the Autumn of 2019.

The uncertainty created by this change to our revenue from advertising led us to significantly adjust our cost base at the end of the year and in January. As it turns out, with the uncertain and adverse impact of the Covid-19 on markets and general business activity, this pre-emptive action has proved to be fortunate.

Our reaction to the onset of Covid-19 has been to examine the potential impact of the virus on our operations and our market. We need to ensure that the welfare of our staff and the continued provision of our service is our priority. We are currently a company of home-based staff and we have looked at reasonable worst-case scenarios and discussed potential mitigating strategies to ensure the continuity of our service.

The Board believes it has reduced its cost base sufficiently to ride out the current business environment and we are beginning to see the return of advertising revenues. We are also experiencing a growth in subscriptions levels which, if sustained, will over time make up for suppressed advertising levels.

At the moment, our business seems to be performing well and with February a profitable month, we are feeling confident that we are able to weather the storm.

One of the results of the disruption to advertising revenues is that the Group's cash levels decreased to £557,000 at the period end, whereas we would have hoped to see them improve. The Directors believe this has now stabilised and we look to benefit from the reductions made to the cost base, reflected in an improvement in performance in the second half, to restore our usual cash levels in the near future.

While it is clear there are many challenges ahead, your Board is committed to seeing the business through these, suddenly, extremely unpredictable times.

 

Financial performance

Key financial performance for the period has been summarised as follows:

	Six Months ended	Six Months ended
	31 December 2019	31 December 2018
	£'000	£'000
Revenue	3,748	4,265
Loss for the period	(399)	(214)
Operating loss	(397)	(210)
Loss per share (see note 3)	(1.56 p)	(0.84 p)

Clem Chambers

CEO 

25 March 2020

 

A copy of this announcement is available on the Group's website: www.ADVFN.com

Enquiries:

For further information please contact: 

ADVFN PLC Clem Chambers		[phone]
Beaumont Cornish Limited (Nominated Adviser) www.beaumontcornish.com
Roland Cornish/Michael Cornish		[phone]

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. The person who arranged for the release of this announcement on behalf of the Group was Clem Chambers, Director.

 

Consolidated income statement
		6 months to  31 Dec	6 months to  31 Dec	12 months to  30 June
		2019	2018	2019
		£'000	£'000	£'000
		unaudited	unaudited	audited
	Notes
Revenue		3,748	4,265	8,714
Cost of sales		(159)	(227)	(421)
Gross profit		3,589	4,038	8,293
Share based payment		-	-	(2)
Amortisation of intangible assets		(156)	(69)	(220)
Other administrative expenses		(3,830)	(4,179)	(8,546)
Total administrative expense		(3,986)	(4,248)	(8,768)
Operating (loss)/profit		(397)	(210)	(475)
Finance income and expense		(5)	(4)	(7)
Profit from sale of equity investment to a related party		-	-	47
Loss before tax		(402)	(214)	(435)
Taxation		3	-	24
Loss for the period attributable to shareholders of the parent		(399)	(214)	(411)
Earnings per share
Basic and diluted	3	(1.56 p)	(0.84 p)	(1.60 p)

Consolidated statement of comprehensive income
		6 months to  31 Dec	6 months to  31 Dec	12 months to  30 June
		2019	2018	2019
		£'000	£'000	£'000
		unaudited	unaudited	audited
Loss for the period		(399)	(214)	(411)
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		16	33	37
Deferred tax on translation of foreign held assets		-	-	-
Total other comprehensive income		16	33	37
Total comprehensive income for the year attributable to shareholders of the parent		(383)	(181)	(374)

 

Consolidated balance sheet
		31 Dec	31 Dec	30 June
		2019	2018	2019
		£'000	£'000	£'000
		unaudited	unaudited	audited
Assets
Non-current assets
Property, plant and equipment		172	161	145
Goodwill		978	971	978
Intangible assets		1,467	1,417	1,447
Investments		-	3	-
Deferred tax		1	1	-
Trade and other receivables		108	108	108
		2,726	2,661	2,678
Current assets
Trade and other receivables		491	812	693
Cash and cash equivalents		557	871	887
		1,048	1,683	1,580
Total assets		3,774	4,344	4,258
Equity and liabilities
Equity
Issued capital		51	51	51
Share premium		167	145	167
Share based payments reserve		367	365	367
Foreign exchange reserve		298	278	282
Retained earnings		436	1,063	835
		1,319	1,902	1,702
Current liabilities
Trade and other payables		2,455	2,442	2,556
Current tax		-	-	-
		2,455	2,442	2,556
Total liabilities		2,455	2,442	2,556
Total equity and liabilities		3,774	4,344	4,258

 

Consolidated statement of changes in equity

	Share capital		Share premium		Share based payment reserve		Foreign exchange		Retained earnings		Total equity
	£'000		£'000		£'000		£'000		£'000		£'000
At 1 July 2018 - as originally stated	51		145		365		245		1,277		2,083
Effect of the application of IFRS 9*	-		-		-		-		(31)		(31)
	51		145		365		245		1,246		2,052
Loss for the period after tax*	-		-		-		-		(183)		(183)
Other comprehensive income
Exchange differences on translation of foreign operations	-		-		-		33		-		33
Total comprehensive income	-		-		-		33		(183)		(150)
At 31 December 2018	51		145		365		278		1,063		1,902
Equity settled share options	-		-		2		-		-		2
Share issues			22								22
Transactions with owners	-		22		2		-		-		24
Loss for the period after tax	-		-		-		-		(228)		(228)
Other comprehensive income
Exchange differences on translation of foreign operations	-		-		-		4		-		4
Total comprehensive income	-		-		-		4		(228)		(224)
At 30 June 2019	51		167		367		282		835		1,702
Loss for the period after tax	-		-		-		-		(399)		(399)
Other comprehensive income
Exchange differences on translation of foreign operations	-		-		-		16		-		16
Total comprehensive income	-	-		-		16		(399)		(383)
At 31 December 2019	51		167		367		298		436		1,319

*The application of the Expected Loss method under IFRS 9 on 1 July 2018 has resulted in an adjustment of £31,000 at that date. This, combined with £183,000 above, amounts to £214,000 which is the total loss for the period after tax as previously reported at 31 December 2018.
 

Consolidated cash flow statement
		6 months to  31 Dec	6 months to  31 Dec	12 months to  30 June
		2019	2018	2019
		£'000	£'000	£'000
		unaudited	unaudited	audited
Cash flows from operating activities
(Loss)/profit for the year		(399)	(214)	(411)
Taxation expense		-	-	(24)
Net finance income in the income statement		5	4	7
Share based payment		-	-	2
Depreciation of property, plant and equipment		52	36	81
Amortisation		156	69	220
Disposal of equity investment to a related party		-	-	(47)
Decrease in trade and other receivables		202	46	134
(Decrease)/increase in trade and other payables		(101)	129	243
Net cash generated by continuing operations		(85)	70	205
Income tax paid		-	(22)	2
Net cash generated by operating activities		(85)	48	207
Cash flows from financing activities
Issue of share capital		-		22
Interest paid		(5)	(4)	(7)
		(5)	(4)	15
Cash flows from investing activities
Payments for property, plant and equipment		(79)	(61)	(90)
Purchase of intangibles		(176)	(179)	(360)
Receipt from related party		-	-	50
Net cash used by investing activities		(255)	(240)	(400)
Net decrease in cash and cash equivalents		(345)	(196)	(178)
Exchange differences		15	6	4
Net decrease in cash and cash equivalents		(330)	(190)	(174)
Cash and cash equivalents at the start of the period		887	1,061	1,061
Cash and cash equivalents at the end of the period		557	871	887

 

 

1.  Legal status and activities

ADVFN Plc is principally involved in the development and provision of financial information primarily via the internet and the development and exploitation of ancillary internet sites.

ADVFN Plc is a public limited liability company incorporated and domiciled in England and Wales. The address of its registered office is Suite 27, Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.

ADVFN Plc is quoted on the Alternative Investment Market ("AIM") of the London Stock Exchange.

2.  Basis of preparation

The unaudited consolidated interim financial information is for the six-month period ended 31 December 2019.  The financial information does not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2019, which were prepared under IFRS as adopted by the European Union (EU).

The accounting policies adopted in this report are consistent with those of the annual financial statements for the year to 30 June 2019 as described in those financial statements.

The financial statements are presented in Sterling (£) rounded to the nearest thousand except where specified.

The unaudited interim financial information does not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 30 June 2019.

The interim financial information has been prepared on the going concern basis which assumes the Group will continue in existence for the foreseeable future.

Our reaction to the onset of Covid-19 has been to examine the potential impact of the virus on our operations and our market. We need to ensure that the welfare of our staff and the continued provision of our service is our priority. We are already a company of home-based staff and we have looked at reasonable worst-case scenarios and discussed potential mitigating strategies to ensure the continuity of our service.

The Board believes it has reduced its cost base sufficiently to ride out the current business environment and we are beginning to see the return of advertising revenues. We are also experiencing a growth in subscriptions levels which, if sustained, will over time make up for suppressed advertising levels.

At the moment, our business seems to be performing well and with February a profitable month we are feeling confident that we are able to weather the storm.

One of the results of the disruption to advertising revenues is that the Group's cash levels decreased to £557,000 at the period end, whereas we would have hoped to see them improve. The Directors believe this has now stabilised and we look to benefit from the reductions made to the cost base, reflected in an improvement in performance in the second half, to restore our usual cash levels in the near future.

No material uncertainties that cast significant doubt about the ability of the Group to continue as a going concern have been identified by the directors.  Accordingly, the directors believe it is appropriate for the interim financial statement to be prepared on the going concern basis.

The interim financial information has not been audited nor has it been reviewed under ISRE 2410 of the Auditing Practices Board. The financial information presented does not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The Group's statutory accounts for the year to 30 June 2019 have been filed with the Registrar of Companies. The auditors, Grant Thornton UK LLP reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) or Section 498(3) of the Companies Act 2006.

New standards adopted in the period:

IFRS 16 Leases

The standard has replaced IAS 17 and introduces a single lessee accounting model. Under the provisions of the new standard most leases, including the majority of those previously classified as operating leases, are brought onto the financial position statement as a right-of-use asset and as an offsetting lease liability. Both asset and liability are based on present values of the lease payments due over the term of the lease with the asset being depreciated in accordance with IAS 16 'Property, plant and equipment' and the liability increased by the addition of interest and reduced as lease payments are made.

3.  Earnings per share

	6 months to	6 months to	12 months to
	31 Dec 2019	31 Dec 2018	30 June 2019
	£'000	£'000	£'000
Loss for the year attributable to equity shareholders	(399)	(214)	(411)
Earnings per share (pence)
Basic	(1.56 p)	(0.84 p)	(1.60p)
Diluted	(1.56 p)	(0.84 p)	(1.60p)
	Shares	Shares	Shares
Weighted average number of shares in issue for the period	25,657,927	25,623,845	25,657,927
Dilutive effect of options	-	-	-
Weighted average shares for diluted earnings per share	25,657,927	25,623,845	25,657,927

Where a loss is reported for the period the diluted loss per share does not differ from the basic loss per share as the exercise of share options would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33.

In addition, where a profit has been recorded but the average share price for the period remains under the exercise price the existence of options is not dilutive.

4.  Events after the balance sheet date

Our assessment of the impact of the COVID-19 virus is set out in Note 2. There are no other events of significance occurring after the balance sheet date to report.

5.  Dividends

The directors do not recommend the payment of a dividend.

6.  Financial statements

Copies of these accounts are available from ADVFN Plc's registered office at Suite 27, Essex Technology 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

 

END

 

 

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