ADVFN Regulatory News (AFN)

ADVFN, the global stocks and shares website, announces its audited results for the year ended 30 June 2016

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

For further information, please contact:

Clem Chambers,

ADVFN PLC CEO

0207 0700 909

Salmaan Khawaja/ Jamie Barklem

Grant Thornton UK LLP (Nominated Adviser)

0207 383 5100

CHIEF EXECUTIVE'S STATEMENT

2016 was a transformational year for ADVFN with a change in the long term strategy of the company from international growth to consolidation of the existing business.

Having had our plans derailed last year by the attempt to take control of the ADVFN board, we have made the decision to enter a period of retrenchment.

Cash burn and losses are almost unavoidable with the sort of investment programs we have undertaken in the past. Currently the UK stock market has no stomach to support this kind of strategy so we have changed course to avoid needing to raise further funding and to instead produce profits and cash flow.

Curtailing investment drops quickly through to the bottom line but also feeds through to reductions in sales. The net result is equilibrium at a lower level of activity, which we hope will provide a solid basis for future growth. This is what we are working towards and, so far, we have made good progress.

The operating losses dropped from £1,905,000 to £650,000 an improvement of 65.8%. Sales are down 10.7% from £9,297,000 in 2015 to £8,303,000. However, costs of sales and expenses were down 20.1% per cent from £11,202,000 in 2015 to £8,953,000.

The after tax loss for the year was £478,000 down from £1,560,000 in the same period last year represents an improvement of 69.4%.

As announced on 24 March 2016, the loss after tax for the 6 months to 31 December 2015 was £442,000, so it can be seen that the company made a significantly reduced loss of £36,000 in the final six months in the financial year. This is an improvement of £406,000 on the previous half.

The market for our services is fast changing, with mobile becoming the dominant platform for communication and information. We have positioned ourselves for this development with our mobile app which has enabled us to buffer these changes as our traffic transitions to mobile.

However the mobile platforms are a weaker environment for monetisation which means, from a business perspective, we have to progress just to remain stationary.

This shift of usage from the desktop to mobile adds uncertainty but change is always an opportunity. We are well used to adapting to changing circumstances. In line with this we are adding new products to ADVFN which provide new advertising opportunities, new subscription products and new investor relations services.

We believe these offerings will help keep ADVFN relevant to its users as the online landscape continues to shift.

Clement Chambers

CEO

21 October 2016

STRATEGIC REPORT

Financial Overview

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

There has been a continued environment of rising costs in data licenses and we continue to prune content where its costs outweigh its benefits.

We are comfortable with our new cost base and believe it has the capacity for business growth.

Business Review

ADVFN has restructured. We have cut costs, repriced product, closed international offices and created new offerings. The bulk of this process completed early this year. It would seem that our decision to do so was the correct one, with a general rise of fragility on many fronts. AIM, on which we are quoted, has been through a poor period with many companies delisting. Important foreign markets like Brazil and the US suffered from a deep malaise for most of the year. Even the dreaded Brexit was a drag on our business up until the aftermath of the vote.

These situations remain unresolved but we have in the meantime put our business onto a different footing. We made a significantly reduced loss of £36,000 in the final six months in the financial year. This signals the end of a restructuring process that we undertook in this financial year and places us with a focus on our key US and UK territories. Business is stable and we are working on a series of initiatives to underpin that and with a little good fortune provide growth.

Operating Costs

We have significantly cut operating costs. We have slimmed down our offerings, international operations, marketing and cut headcount.

Closure of ADVFN Japan LLP and disposal of Investor Events Ltd

During the year the office in Japan was closed, however the on-line presence in Japan continues operating as normal with UK hosted websites.

On 19th May 2016 an agreement was reached to dispose of the business Investor Events Limited and was completed 30 September 2016. The proceeds of the disposal amounted to £40,000 and exceeded the book value of other related net assets and accordingly no impairment losses have been recognised.

Both of these strategic changes have been designed to bring the Group's focus back to the central, core offering. It also allows us the financial flexibility to react to the changing technology in our market place.

Research and Development

We are highly focused on new developments including improvements to our website and researching and developing other methods of accessing our offering. The web and mobile environment is going through a seismic shift on many levels and we are struggling to stay ahead of changes that threaten to make us obsolete. We have a road map for the shifting trends in platform, offering, exchange landscape and advertising infrastructure. We have managed to adapt over the last 16 years so we remain in good shape to cope with what is a very fast changing environment.

Environmental policy

The Group as a whole continues to look for ways to develop its environmental policy. It remains our objective to improve our performance in this area.

 Future outlook for the business

ADVFN has had a successful period of consolidation as you will note from the transformation in our results. We have turned this necessity into an opportunity to refocus our business away from international growth onto consolidation and redevelopment of the business.

Early outcomes from new product initiatives are promising and our goal is to return to growth in the next twelve to eighteen months whilst controlling costs. The whole market place we are operating in is changing dramatically. However we are confident that we can adapt to these changes by using our market knowledge, years of experience and strong technical platform to keep abreast of these developments.

Summary of key performance indicators

The Directors monitor the Key Performance Indicators on an ongoing basis. The chart below shows the level of performance achieved in the financial year. The individual items are as follows:

Turnover - is of vital importance as it gives the sales department a goal and measures the financial success of the Group's service. 

Head count - is a very significant part of the costs of the company and is fixed as an overhead. It provides a good indicator when taken against the revenue figure for the efficiency of the business. Talented people are a vital part of the business. 

Registered users - give us an accurate indication of our audience pool and the potential available for marketing our service.

Principal risks and uncertainties

Economic downturn

There are signs of global economic recovery and these have shown up as bursts of traffic on ADVFN.

However there can be no certainty in a return to economic normality in the near future but as previously stated the Company has bridged both the dotcom crash the credit crunch and now Brexit, so we feel that we have shown we are robust enough to withstand the financial conditions of economic emergencies.

High proportion of fixed overheads coupled with variable revenues

A large proportion of the company's overheads are 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 are implemented on a constant review basis. We have had a strong period of cost optimisations that are updated on a regular basis.

Product obsolescence

The technology that we use is always in development and constantly changing. All our products are subject to technological change and advance and resultant obsolescence.

We have no choice but to keep innovating to keep up with growing technical challenges that are changing all the time.

The Directors are committed to the Research and Development strategy in place, and are confident that the company is able to react effectively to the developments within the market.

Fluctuations in currency exchange rates

A growing proportion of our turnover relates to overseas operations. As a company, we are therefore exposed to foreign currency fluctuations. The Company manages its foreign exchange exposure on a net basis, and if required uses forward foreign exchange contracts and other derivatives/financial instruments to reduce the exposure. Currently hedging is not employed and no forward contracts are in place. If currency volatility was extreme and hedging activity did not mitigate the exposure, then the results and the financial condition of the company might be adversely impacted by foreign currency fluctuations.

Following the volatility post Brexit, management will continue to monitor the impact of currency fluctuation. The exchange rate of the US Dollar has been a recent focus.

People

I would like to thank everyone at ADVFN who tirelessly provide a global service for private investors that never sleeps.

ON BEHALF OF THE BOARD

Clement Chambers

CEO

21 October 2016

Consolidated statement of changes in equity

1. 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.

Two 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 is the provision of financial broking services and other internet services not related to financial information. The Disposal Group segment comprises Investor Events Limited which is held for sale with completion on 30 September 2016. Segment information can be analysed as follows for the reporting period under review:

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

Revenues are allocated to the country in which the customer resides. During both 2016 and 2015 no single customer accounted for more than 10% of the Group's total revenues.

2. Loss per share

Where a loss has been recorded for the year 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.

3. Disposal of Investor Events Limited

On 19th May 2016 an agreement was reached to dispose of the business Investor Events Limited. The disposal was effected in order to generate cash flow to benefit the other Group businesses. The disposal was completed 30 September 2016. The proceeds of the disposal amounted to £40,000 and exceeded the book value of other related net assets and accordingly no impairment losses have been recognised. The major classes of assets and liabilities comprising the operation are as below:

The result for the company was a profit of £11,000 (2015: £nil)

4. Events after the balance sheet date

The sale of the subsidiary company Investor Events Limited was completed on 30 September 2016 (see note 3). The amount of the consideration exceeded the carrying value of the net assets and therefore no impairment was required.

There are no other events of significance occurring after the balance sheet date to report.

5. 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 consolidated balance sheet at 30 June 2016 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated cash flow statement and associated notes for the year then ended have been extracted from the Company's 2016 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.advfn.com.