Preliminary Results for the Year Ended 30 June 13

RNS Number : 9829S

On-Line PLC

13 November 2013

 



13 November 2013

('On-line' or 'the Company')

Preliminary Results for the Year Ended 30 June 2013

On-line today announces preliminary results for the year ended 30 June 2013.

For further information, please contact:

Michael Hodges

Chairman and Managing Director                      [e-mail]

Salmaan Khawaja / Edward Thomas

Grant Thornton, UK LLP (Nominated Adviser) 020 7383 5100

Chairman's Statement

On-Line has continued to work with ADVFN as it makes progress in the financial data market. Our turnover for the year was £91,000 (2012: £160,000) giving us a loss before tax of £11,000 (2012: profit of £23,000). 

Summary of key performance indicators of the Company

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

	Year to 30 June 2013	Year to 30 June 2012
	£'000	£'000
Turnover	91	160
Operating (loss)/profit	(10)	23
Earnings per share	(0.14)p	0.30p

ADVFN plc

On-line is the largest shareholder in ADVFN, we work closely together to make ADVFN a success, which in time will be of great benefit to us. ADVFN has made progress and has remained strong during this financial crisis. Its performance for the year is detailed below.

Extract from ADVFN's 2013 accounts:

"HIGHLIGHTS

·       EBITDA profit for continuing operations of £108,000 (2012: loss of £362,000)

·       Loss for the period of £539,000 (2012: loss of £1,676,000)

·       ADVFN's registered user base continues to grow and is now over 2,800,000 (2012: 2,600,000)

CHIEF EXECUTIVE'S STATEMENT

This financial year has been a significant success with the company turning in an EBITDA profit of £108,000 against an EBITDA loss of £362,000 in 2012.

The operating loss was improved by £568,000 from a loss of £1,439,000 in 2012 to £871,000 this year.

This has reflected in little change in our cash, which rose to £1,461,000 at the year end from £1,440,000 with sales broadly in line with last year at £8,077,000 down from £8,485,000 adjusted for discontinued businesses.

The global backdrop to our efforts has not been favourable but we have been able to adjust well because the international spread of our business gives us a robust platform even in these economically fragile times.

For example our US business has made up for weakness in other territories. The US economy is on the mend while our countries such as Brazil which have been historically strong are now suffering their own retrenchment.

Over the last year we have continued to shift our focus into international markets building out using our US model as a template.

We are making particular progress in Mexico, Japan and the Philippines. Meanwhile our US properties continue to deliver and show much promise.

Historically ADVFN's business has developed in bursts that end in plateaus. Over the last ten years or so this cycle has repeated every few years while the business has grown at a tremendous rate. The last couple of years have been such a plateau but we think we have a good chance to enter the next growth phase. To accelerate this we have set out to acquire established websites with investor communities, the first being Finance Manila. These new communities will then become the platforms on which to build larger sites, reproducing the template of our success in the US.

It would be nice to have equity markets back in fashion but we are confident that we can grow in markets even if they remain at historically low levels of investor activity.

While on the surface there is not much to report, the significant changes in our financial performance attests to major adaptations to a changing marketplace.

Our cost base is lighter and has shifted to focus more on new markets. Our initial forays into mobile, Events, newsletters and e-books have met with initial success and we have moved to begin actively acquiring new investor communities.

As such we feel 2013-2014 should be another solid year and a step towards our long term goal of building a much larger business.

Financial overview

These accounts have been prepared under International Financial Reporting Standards (IFRS) as adopted by the European Union.

This year's results show a significant improvement with EBITDA showing a £108,000 profit and improvement of £470,000 from last year's loss.

The result after tax, which includes £1,310,000 of non-cash items, was a loss of £539,000, an improvement of £1,137,000 against a loss in 2012 of £1,676,000.

During the year we have taken a robust position on costs which has given us the liquidity to continue to invest in R&D, international markets and acquisition.

Strategy

Strategies are by definition "long term". Since day one back in 1999, we have seen ADVFN as an international offering and this continues to be our driving vision.

We are, as I write, according to Amazon's Alexa, ranked 510th largest website in the UK, 741 in the US, 828 in Brazil, 970 in Canada, 563 in Norway and so on. I would encourage shareholders to use Alexa to compare us to other well-known and valuable properties to gauge how well we are doing. We think you will be impressed with the company we keep.

A global audience gives us a robustness that means when conditions are weak in one country; another in a rally will compensate for it. This has helped insulate us from some very harsh economic times.

We have done well in the US and we hope to use this experience as a template to drive new territories and are using this experience to acquire and embed websites like Finance Manila into ADVFN.

Communities are the heart of the internet and we see an opportunity to embrace share trading communities around the world through acquisition and joint venture. With our premium content and advertising skills, over a period of time we can boost the monetisation of these properties.

Communities can be resistant to change so to protect the value of the community this process takes time, however, we have succeeded with Investors Hub in making this transformation.

If we can reproduce our success with Investors Hub in the US in other territories, which must be stressed was not overnight, then we will have a clear path to grow our business to the next level of scale.

Meanwhile mobile is making an increasing impact on online usage and we have been navigating this change with our popular mobile offering. This is still a fledgling market but we are well positioned in it with our iPhone and android versions of ADVFN. It is positive news that Google is making progress with its sales of mobile advertising as we are fast developing significant advertising inventory on the mobile format, one which is at an early stage of monetisation.

These apps alongside the website also address the growing tablet market, so we are already well positioned for developments in this important trend.

Our mobile platforms are also important as part of our international strategy as many markets have heavy mobile penetration where internet access via handsets has pre-empted desktop penetration".

On-line Plc

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 investment 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

13 November 2013

Profit and Loss Account

for the year ended 30 June 2013

	Notes	2013	2012
		£'000	£'000
Turnover		91	160
Administrative expenses		(101)	(137)
Operating (loss)/profit		(10)	23
Interest payable		(1)	-
(Loss)/profit on ordinary activities before taxation		(11)	23
Tax on (loss)/profit on ordinary activities		-	-
(Loss)/ profit on ordinary activities after taxation		(11)	23
Basic (loss)/earnings per ordinary share	1	(0.14)p	0.30p
Diluted (loss)/earnings per ordinary share	1	(0.14)p	0.29p

All operations are continuing.

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

Balance Sheet

at 30 June 2013

				2013	2012
			Notes	£'000	£'000
Fixed assets
Investments				868	868
Current assets
Debtors				121	149
Cash at bank and in hand				-	-
				121	149
Creditors: amounts falling due within one year				(64)	(87)
Net current assets				57	62
Total assets less current liabilities				925	930
Capital and reserves
Called up share capital				3,242	3,242
Share premium account				2,205	2,205
Option valuation reserve				37	31
Profit and loss account				(4,559)	(4,548)
Shareholders' funds			2	925	930

Cash Flow Statement

for the year ended 30 June 2013

				2013	2012
			Notes	£'000	£'000
Net cash inflow/(outflow) from operating activities			3	15	(51)
Increase/(decrease) in cash				15	(51)
(Bank overdraft)/cash balance at the beginning of the period				(50)	1
Bank overdraft at the end of the period			4, 5	(35)	(50)

				2013	2012
				£'000	£'000
Cash at bank and in hand				-	-
Bank overdraft				(35)	(50)
Bank overdraft at the end of the period			5	(35)	(50)

1.             (Loss)/earnings per share

		2013			2012
	Profit	Number of	Earnings	Profit	Number of	Earnings
		shares	per share		shares	per share
	£'000	'000	p	£'000	'000	p
Basic (loss)/earnings per share
(Loss)/profit for the year	(11)			23
Weighted average number of shares		7,662			7,662
Basic (loss)/earnings per share			(0.14)p			0.30p
Diluted (loss)/earnings per share
(Loss)/profit for the year	(11)			23
Weighted average number of shares		7,662			7,662
Dilutive effect of options		68			245
Weighted average number of shares of diluted earnings per share		7,730			7,907
Diluted (loss)/earnings per share			(0.14)p			0.29p

The calculation for the diluted earnings per share is provided for reference only. Where a loss is made in the year the impact of the exercise of share options is not dilutive.

2.             Reconciliation of movements in shareholders' funds

			2013	2012
			£'000	£'000
(Loss)/profit for the financial year			(11)	23
Recognition of equity settled share based payments in the year (FRS20)			6	7
Net (decrease)/increase in shareholders' funds in the year			(5)	30
Shareholders' funds at 1 July			930	900
Shareholders' funds at 30 June			925	930

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

			2013	2012
			£'000	£'000
Operating (loss)/profit			(11)	23
Equity settled share based payments in the year			6	7
Decrease/(increase) in debtors			28	(68)
Decrease in creditors			(8)	(13)
Net cash inflow/(outflow) from operating activities			15	(51)

Notes to the Financial Statements

for the year ended 30 June 2013

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

	2013	2012
	£'000	£'000
Increase /(decrease) in cash for the year	15	(51)
Net funds at 1 July	(50)	1
Net funds at 30 June	(35)	(50)

5.             Analysis of movement in net funds

			At 1 July 2012	Cash flow	At 30 June 2013
			£'000	£'000	£'000
Cash in hand and at bank			(50)	15	(35)

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 2013 and the profit and loss account, cash flow statement and associated notes for the year then ended have been extracted from the Company's 2013 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.

 

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