Final Results

RNS Number : 8252Q

On-Line PLC

09 November 2012

 



9 November 2012

 ('On-line' or 'the Company')

Preliminary Results for the Year Ended 30 June 2012

On-line today announces preliminary results for the year ended 30 June 2012.

For further information, please contact:

Michael Hodges

Chairman and Managing Director                    [e-mail]

Gerry Beaney or Salmaan Khawaja

Grant Thornton Corporate Finance (Nominated Adviser) 020 7383 5100

Chairman's Statement

2011 - 2012 has been tough for everyone but we have ploughed on and have made progress.

Our turnover for the year was £160,000 (2011: £160,000) giving us a profit before tax of £23,000 (2011: £3,000). 

Summary of key performance indicators

The Company's financial performance for the year has been analysed as follows:

	Year to 30 June 2012	Year to 30 June 2011
	£'000	£'000
Turnover	160	160
Operating profit	23	3
Earnings per share	0.30p	0.04p

Critical to the performance of the Company is its investment in ADVFN plc. This has made progress as well and has remained strong during this financial crisis. Its performance for the year is summarised below:

ADVFN plc

ADVFN's registered user base continues to grow and is now over 2,600,000 (2011: 2,200,000); Turnover almost unchanged at £8,485,000 in continuing operations (2011: £8,563,000);EBITDA* loss for continuing operations of £362,000 (2011: profit £340,000).

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

ADVFN has undergone many changes this year. It has broadened its offering geographically and content-wise.

ADVFN has been able to ride out local and global economic trends and continues to invest to position itself globally while keeping up with technological developments like the rise of mobile with its own best of breed offering.

Developing international markets continues to be its focus, a strategy it is also seeing in many of its customers such as the spread betting firms. The successful launch of its mobile platform bodes well for next year and will give it a tail wind in many markets where the desktop is less common than in the UK.

Its entrance into news, eBooks and comment has also bedded in well, with its Book line taking the top slot and at one point 3 places in the top 5 of Amazon UK's Investing chart. Meanwhile divesting Equity Development enabled us to focus even more tightly on the ADVFN brand.

Since the mid-year it has taken a more conservative line on expansion which positions it well to benefit quickly from fairer macro-economic conditions should they appear.

It will continue with its strategy, which has been for many years now, to build the company's global audience and international revenue.

There remain many untapped markets in which private investors would welcome its offering. ADVFN is addressing as many as it sensibly can at this time and will address more as opportunities arise. In addition it is now producing offerings for new formats, such as smart phones like the iPad, tablets and e-readers to leverage its audience onto other media platforms. Its mobile offering and ADVFN Books are performing well ahead of expectations.

While still early days in both these categories, it is clear to see that such diversifications bring not only direct sales but other cross selling and promotional benefits. They also give ADVFN another tool to use in opening new markets.

ADVFN is always engaged in development. It keeps itself at the leading edge of technology to assure its long term competitiveness. Its systems and platform is what makes it unique and valuable.

Without this investment and the efforts of all its development team it would have not been able to achieve what it has thus far.

The future for ADVFN is bright. It has more opportunities now than ever before, as much competition fades.

Market conditions appear to change a great deal more than its business performance and affect it a good deal less than others.

Summary of key performance indicators of our investment in ADVFN plc

The directors monitor the progress of the overall company strategy and the individual strategic elements by reference to certain financial and non-financial key performance indicators. These are based on indicators from the investment in ADVFN Plc.

	2012 Actual	2012 Target	2011 Actual	2011 Target
Average head count	60	60	54	60
ADVFN registered users	2.6M	2.5M	2.2M	2.1M

Strategy

We will continue to work with ADVFN to help them develop and build the business while at the same time looking for new investment opportunities that the company might benefit from.

Operating costs

Our costs remain reasonably fixed and predictable and we do not see that changing in the immediate future.

Research and development

We believe in trying to get the best from all areas that we work in. It is very important that On-line and ADVFN continue to invest in the quality and design of our products. We believe continued investment in our research and development is fundamental to the continuing growth of the business.

Environmental policy

This has always been important to the company and as a whole we continue to look for ways to develop our environmental policy. It is our objective to improve our performance in this area.

Future developments for the business

We feel it is right for us to work with our investments and assist in their growth.  This has seen them increase their business and allow new areas to be explored.

Principal risks and uncertainties

The management of the company and the nature of the company's strategy are subject to a number of risks. The directors have set out below the principal risks facing the business. The directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks identified below. Where possible, processes are in place to monitor and mitigate such risks.

Economic downturn

The success of the world's stock markets might affect the business given the sector our investment operates in.  Many things around the world can affect a stock market from war to human error. This can also have a knock on effect to consumer spending power as has been seen with the current credit crunch around the world, although in the past when we have seen a market downturn this has not impacted on usage of ADVFN, with customers generally wanting to know what is happening in the markets, be it good or bad. In response to this potential risk, senior management aim to keep abreast of economic conditions around the world; not only should senior management be aware of it, likewise so should our customers and members. In cases of severe economic downturn, marketing and pricing strategies are modified to reflect the new market conditions.

High proportion of fixed overheads and variable revenues

A large proportion of the company's overheads are reasonably fixed. There is the risk that any significant changes in revenue may lead to the inability to cover such costs. Management closely monitor fixed overheads against budget on a monthly basis and cost saving exercises would be implemented should there be an anticipated decline in revenues.

Michael Hodges

Chairman

9 November 2012

Profit and Loss Account for the year ended 30 June 2012

	Notes	2012	2011
		£'000	£'000
Turnover		160	160
Administrative expenses		(137)	(157)
Profit on ordinary activities before taxation		23	3
Tax on profit on ordinary activities		-	-
Profit on ordinary activities after taxation	2	23	3
Basic earnings per ordinary share	1	0.30p	0.04p
Diluted earnings per ordinary share	1	0.29p	0.04p

All operations are continuing.

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

Balance Sheet at 30 June 2012

				2012	2011
			Notes	£'000	£'000
Fixed assets
Investments				868	868
Current assets
Debtors				149	81
Cash at bank and in hand				-	1
				149	82
Creditors: amounts falling due within one year				(87)	(50)
Net current assets				62	32
Total assets less current liabilities				930	900
Capital and reserves
Called up share capital				3,242	3,242
Share premium account				2,205	2,205
Option valuation reserve				31	24
Profit and loss account				(4,548)	(4,571)
Shareholders' funds			2	930	900

Cash Flow Statement for the year ended 30 June 2012

				2012	2011
			Notes	£'000	£'000
Net cash outflow from operating activities			3	(51)	(4)
Decrease in cash				(51)	(4)
Cash balance at the beginning of the period				1	5
(Bank overdraft)/cash balance at the end of the period				(50)	1

				2012	2011
				£'000	£'000
Cash at bank and in hand				-	1
Overdraft				(50)	-
(Bank overdraft)/cash balance at the end of the period			5	(50)	1

Notes

1.             Earnings per share

		2012			2011
	Profit	Number of	Earnings	Profit	Number of	Earnings
		shares	per share		shares	per share
	£'000	'000	p	£'000	'000	p
Basic earnings per share
Profit for the year	23			3
Weighted average number of shares		7,662			7,662
Basic earnings per share			0.30p			0.04p
Diluted earnings per share
Profit for the year	23			3
Weighted average number of shares		7,662			7,662
Dilutive effect of options		245			513
Weighted average number of shares of diluted earnings per share		7,907			8,175
Diluted earnings per share			0.29p			0.04p

2.             Reconciliation of movements in shareholders' funds

			2012	2011
			£'000	£'000
Profit for the financial year			23	3
Recognition of equity settled share based payments in the year (FRS20)			7	7
Net increase in shareholders' funds in the year			30	10
Shareholders' funds at 1 July			900	890
Shareholders' funds at 30 June			930	900

3.             Reconciliation of operating profit to net cash (outflow)/inflow from operating activities

			2012	2011
			£'000	£'000
Operating profit			23	3
Equity settled share based payments in the year			7	7
Increase in debtors			(68)	(3)
Decrease in creditors			(13)	(11)
Net cash (outflow)/inflow from operating activities			(51)	(4)

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

	2012	2011
	£'000	£'000
Decrease in cash for the year	(51)	(4)
Net funds at 1 July	1	5
Net funds at 30 June	(50)	1

5.             Analysis of movement in net funds

			At 1 July 2011	Cash flow	At 30 June 2012
			£'000	£'000	£'000
Cash in hand and at bank			1	(51)	(50)

6.         Publication of Non Statutory Accounts

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006.

The balance sheet at 30 June 2012 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Company's 2012 statutory financial statements upon which the auditors' opinion is unqualified and does not include any statement under Section 498(2) or (3) of the Companies Act 2006.

The annual report and accounts will shortly be sent to shareholders and will be available on the Company's website, http://www.on-line.co.uk.

 

END

 

 

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