Interim Results
ADVFN PLC
30 March 2007
Embargoed for release until 30th March 2007
ADVFN PLC
('ADVFN' or 'the Company')
Unaudited Interim Results for the Six Months Ended 31 December 2006
ADVFN, Europe's leading stocks and shares website, today announces its unaudited
interim results for the six months ended 31 December 2006.
Highlights:
• Turnover up 45.6% to £2.644M (2005 : £1.82M)
• ADVFN user numbers up over 30% to 810K (2005 : 620K)
• Total group user numbers up over 82% to 3.1M at the report date
compared to 1.7M at the last interim report date of 28 March 2006
• Successful acquisition and integration of US subsidiaries InvestorsHub
and Silicon Investor during the period.
Clem Chambers, Managing Director of ADVFN commented:
'ADVFN is at an exciting phase in its development. Users, subscribers,
subscription income, traffic and advertising revenue are all at record highs and
we are now a truly international company. Accelerated sales growth, due in part
to our overseas properties, is enabling ADVFN to fast approach a post start-up
stage of positive cash flow and profits. Whilst attaining profitability is the
main focus, we also realise that there is still plenty of scope to expand into
untapped markets which offer ADVFN many opportunities and potential revenue
streams.'
ADVFN PLC
Chairman's Statement
These interim figures show that ADVFN is growing at an accelerated pace. The
company has been in a continuous investment phase since its inception in 1999
and this long-term effort has fed through into sales growth, which now has
considerable momentum.
While the UK is still responsible for the bulk of ADVFN's turnover, this
dependency is diminishing as the company's international markets continue to
grow.
ADVFN's record over the last few years has established a pattern of growth and
with our site now flourishing in a number of markets, we feel confident that we
can sustain this level of progress. The US is clearly a key market for future
growth and InvestorsHub and Silicon Investor put us in a strong position to
unlock North America. Post-acquisition integration has run smoothly and this
bodes well for our plans to be a major player in the US within three years.
Progress in the US and in other international markets is now developing beyond
expectations. This has led us to revise and tighten our focus on these markets
in order to drive home the advantage. Although not materially affecting our cost
base, we now expect Europe and the Americas to double the scope and scale of our
business in the next two-to-three years.
Because this growth is built on a business platform with strong operational
leverage, our target is to reach cash flow neutrality in calendar year 2007.
Moreover we are confident that we can sustain this level of performance in the
long term.
Michael J Hodges
Chairman
30th March 2007
Managing Director's Review
Operating Review
I am pleased to present a positive set of results which show a 45.6% increase in
turnover compared to the same period last year. This has been achieved through
additional subscription income and, in particular, additional advertising income
generated from the increase in our user numbers which have risen by 30% to 810K
compared to the same period last year.
Our other businesses are also doing well as can be seen from the exceptional
growth in overall group user numbers. These are up by 82% to 3.1M at the report
date compared to the previous interim report date of 28th March 2006, with this
year's figures seeing the inclusion of our new US subsidiaries for the first
time.
Whilst turnover rose by 45.6%, total administrative expenses only rose by 27% to
£3,079K compared to the same period last year. The company's administrative
expenses include substantial depreciation charges and this period also includes
goodwill amortisation regarding acquisitions of £82K and £78K in option
valuation expenses under the new FRS20 rules together with the inclusion of the
administrative expenses of our acquisitions - Equity Holdings for the entire
period and our US acquisitions for just over half of the period, together with
an element of gearing up costs for localised sites. Our net profits have also
been negatively impacted by a substantial exceptional item, this being £372K for
our share of associates' losses. Unlike the previous periods we have not had
these charges offset by benefits from any exceptional gains on disposals.
Since our acquisition of InvestorsHub and related fundraising, the strength of
our balance sheet has been greatly increased with substantially higher cash, net
current assets and net assets compared to both last year and the June year end
figures.
Current Trading
ADVFN has reached an important milestone - it is now truly international. While
ADVFN has been building a global platform for several years, its income was
mainly derived from the UK. I'm happy to report that during the first half of
financial year 06/07, ADVFN has made significant international progress with
growing business in a number of territories; especially Brazil, Italy and North
America.
This achieves two things: it establishes ADVFN as a proven international
platform, which paves the way for further global expansion, and provides impetus
for the sales growth (both subscription and advertising revenues) necessary to
enter into a post-start up position of positive cash flow and profits.
Having proven itself commercially and enjoyed a strong growth period in the last
few years, ADVFN is now entering the final stage in the product development
cycle; a stage which leads to profitability. In tandem with this, the company
continues to position itself for further expansion into untapped markets, so
while we have established a proven model in four territories there remains much
more opportunity ahead. The ADVFN website is built to enable localised roll out
at minimal cost, so once we have consolidated our recent gains we will look to
repeat this successful blueprint in additional countries.
Our overseas projects have proved that we can build market leading native
language sites while centralising the production and costs in London.
Furthermore, ADVFN's US sites InvestorsHub and Silicon Investor have put us in
contention in the world's biggest market. Its largely untapped advertising
inventory will prove an important asset going forwards; an asset that is already
significantly contributing to the group's sales growth.
Our prospects for growth are underlined by these interim results, which give a
good indication of our overall progress. Equity Development has contributed to
these strong results by turning in an excellent performance. The third party
research market is coming of age with more and more companies appreciating the
benefit of commissioned research. The UK's plethora of PLCs increasingly need to
raise their profile to reach both institutional and retail investors.
Prospects
CupidBay and Fotothing continue to grow their user bases and represent
significant traffic. Whilst income from these properties is not yet stellar,
their traffic remains valuable as is constantly highlighted by M&A activity in
the internet space. Developments on CupidBay's business model are showing
promise and we are hopeful that this will turn the site into a significant
profit centre in due course.
ADVFN is generating a record level of registrations a day; approximately twice
the level of a year ago. I'm also pleased to report that subscribers,
subscription income, traffic and advertising revenue are all at record highs. As
such, these figures are concrete signs that our investments in the company
strategy for growth are bearing fruit. We are confident that this progress is
set to continue and is on course to deliver our plans for both growth and
profitability.
Clem Chambers
Managing Director
30th March 2007
ADVFN PLC
Consolidated Profit and Loss Accounts
for the six months ended 31 December 2006
Six months ended Six months ended Year ended
31 December 2006 31 December 2005 30 June 2006
Unaudited Unaudited Audited
£'000 £'000 £'000
Turnover 2,644 1,816 4,463
Cost of sales (222) (91) (537)
__________ __________ __________
Gross profit
2,421 1,725 3,926
Administrative expenses
Amortisation of goodwill (82) - (77)
Option valuation expense (78) - -
Other administrative expenses (2,919) (2,417) (5,052)
__________ __________ _________
Total administrative expenses (3,079) (2,417) (5,129)
__________ __________ _________
Operating loss (658) (692) (1,203)
Share of operating losses of associates (372) (132) (567)
Exceptional item : gain on part disposal of
associates - 723 761
__________ __________ __________
(1,030) (101) (1,009)
Net interest 8 21 45
__________ __________ __________
Loss on ordinary activities before taxation (1,022) (80) (964)
Tax on loss on ordinary activities - - 58
__________ __________ __________
Loss on ordinary activities after taxation (1,022) (80) (906)
__________ __________ __________
Loss per ordinary share (0.188p) (0.017p) (0.19p)
There were no recognised gains or losses other than the result for the financial
period.
ADVFN PLC
Consolidated Balance Sheets
at 31 December 2006
31 December 2006 31 December 2005 30 June 2006
Unaudited Unaudited Audited
£'000 £'000 £'000
Fixed Assets
Intangible assets 2,343 152 874
Tangible assets 1,756 1,519 1,681
Investments 1,909 2,741 2,402
6,008 4,412 4,957
Current Assets
Debtors 1,025 556 938
Investments 47 28 48
Cash at bank and in hand 1,382 1,061 938
2,454 1,645 1,924
Creditors: amounts falling due
within one year (1,283) (1,010) (1,512)
Net current assets 1,171 635 412
Total assets less current liabilities 7,179 5,047 5,369
Creditors: amounts falling due after one
year (41) - (28)
Net assets 7,138 5,047 5,341
Capital and Reserves
Called up share capital 5,870 4,621 4,798
Share premium account 7,607 5,410 5,634
Merger reserve 221 - 221
Shares to be issued 332 - 498
Option valuation reserve 252 - -
Profit and loss account (7,144) (4,984) (5,810)
Shareholders' funds 7,138 5,047 5,341
ADVFN PLC
Consolidated Cash Flow Statements
for the six months ended 31 December 2006
Six months ended Six months ended Year ended
31 December 2006 31 December 2005 30 June 2006
Unaudited Unaudited Audited
£'000 £'000 £'000
Net cash (outflow) /inflow from operating
activities (402) (136) 65
Returns on investment and servicing of
finance
Net interest 8 21 45
Capital expenditure
Payments to acquire tangible fixed assets (392) (636) (1,067)
Payments to acquire investments - - (15)
(392) (636) (1,082)
Acquisitions (1,637) - (246)
Net cash outflow before financing (2,423) (751) (1,218)
Financing
Issue of ordinary share capital 3,053 10 344
Share issue costs (174) - (3)
Capital element of finance leases repaid (12) (7) (24)
Net cash inflow from financing 2,867 3 317
Increase / (decrease) in cash 444 (748) (901)
ADVFN PLC
Notes to the interim statement
for the six months ended 31 December 2006
1. Loss per ordinary share
Six months ended Six months ended Year ended
31 December 2006 31 December 2005 30 June 2006
Loss for the period £'000 (1,022) (80) (906)
Weighted average number of shares '000 544,618 461,229 469,165
Loss per share p (0.188p) (0.017p) (0.19p)
2. Reserves
Profit and loss Option valuation Share premium
account reserve account
£'000 £'000 £'000
At 1 July 2006 (5,810) - 5,634
Prior year adjustment re FRS20 option valuations (174) 174 -
Foreign exchange difference re associates (138) - -
Options valuation adjustment for the period - 78 -
Loss retained for the period (1,022) - -
At 31 December 2006 (7,144) 252 3,145
3. Reconciliation of operating loss to net cash outflow from
operating activities
Six months ended Six months ended Year ended
31 December 2006 31 December 2005 30 June 2006
Operating loss (658) (692) (1,203)
Depreciation 456 303 678
Amortisation - licences 21 130 260
Amortisation -goodwill 82 - 77
Decrease / (increase )in debtors (87) 99 (135)
Increase / (decrease) in creditors (216) 24 388
Net cash (outflow) / inflow from operating
activities (402) (136) 65
4. The directors do not recommend the payment of a dividend.
5. The financial information contained in this document does not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985. The financial information for the year ended 30 June 2006 is extracted
from the audited financial statements for that period on which the auditors gave
an unqualified report. A copy of those financial statements has been filed with
the Registrar of Companies.
6. The interim financial information has been prepared in accordance
with applicable accounting standards and under the historical cost convention.
The principal accounting policies of the Company have remained unchanged from
those set out in the Company's June 2006 Annual Report and Financial Statements
except for the adjustments resulting from the adoption of FRS20 in the period as
described below.
The Company has adopted FRS20 with effect from 1 July 2006.
FRS20 requires the recognition of a charge to the profit and loss account for
all applicable share based payments, including share options. The Company has
equity-settled share based payments but no cash-settled share based payments.
All share based payments awards granted after 7 November 2002 which had not
vested prior to 1 July 2006 are recognised in the financial statements at their
fair value at the date of grant.
As vesting periods and non-market based vesting conditions
apply, the expense is allocated over the vesting period, based on the best
available estimate of share options expected to vest. Estimates are revised
subsequently if there is any indication that the number of share options
expected to vest differs from previous estimates. Any cumulative adjustment
prior to vesting is recognised in the current period. All equity-settled share
based payments are ultimately recognised as an expense in the profit and loss
account with a corresponding credit to the option valuation reserve.
The adoption of FRS20 requires a prior period adjustment to be
made for awards granted before 1 July 2006. This has created an opening balance
within the option valuation reserve at 1 July 2006 of £174,000.
7. Copies of this statement are being posted to shareholders shortly
and will be available from the company's registered office at Suite 27,
Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.
This information is provided by RNS
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