ADVFN Regulatory News (AFN)

ADVFN, the global stocks and shares website, announces its audited results for the year ended 30 June 2017

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

As covered in previous statements, the 2016 financial year had been a transformational year with a change in the long term strategy of the Company from international growth to consolidation of the existing business. We had also reported that cash burn and losses were almost unavoidable with the sort of investment programs the Company had undertaken in the past. The ADVFN board believed that the UK stock market did not favour a strategy of further investment so the Company had changed direction during the course of the last financial year in order to avoid needing to raise further funding and to instead produce profits and cash flow.

As a result of a focus on profits rather than growth, we have pulled back from investment and have continued to strive for profitability. Whilst this has crimped our ability to grow, we have made good progress on the bottom line.

We remain however in a complex and difficult marketplace which constantly brings new challenges whether we look for them or not. This business environment continues to change rapidly and we have kept a pace with it from the agility of the ADVFN team.

The operating loss of the past (£650,000 in 2016) has now become a profit of £47,000, a solid improvement. Sales are at a similar level to 2016 at £8,186,000 (£8,303,000 in 2016) and this is a strong result in the circumstances.

Advertising and subscription sales have waxed and waned and we have been able to make up for developing weaknesses with new products, price rises and other innovations.

While our performance has been satisfactory, looking ahead, the strengthening of the Sterling, which has occurred since the year end could potentially be a significant drag on us if the US dollar does not appreciate alongside the Sterling, which currently it is not.

Clement Chambers

CEO

23 October 2017

STRATEGIC REPORT

Financial Overview

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

As ever we are in a continued environment of rising costs in data licenses and exchange fees. We will continue to monitor these and adapt as required.

Business Review

As I said in last year's statement ADVFN has undergone a restructuring process which, whilst not requiring additional investment, was not an easy one but the change in our numbers is shown in these results. The markets have risen over the past year to record levels and some people have done well. However, this rise seems to have gone almost unnoticed by the mainstream media. Other areas are now what is entertaining the one time would be trader. Brexit has collected all the headlines as has the election of President Trump, both of which have caused an interesting ride for our market. Our focus on the technology is important as we look forward to the forthcoming year with great excitement

Operating Costs

Our main costs are relatively fixed but licence and exchange fees are continuing to rise and it is these we must keep a close eye on and if need be change what we offer.

Research and Development ("R&D")

Like most technology / media companies we are highly focused on new developments including improvements to our website, products, tools etc. Our research and development is key to our future. The web and mobile environment continue to move and change and it's our R&D that allows us to keep ahead. Our R & D investment this year has been £379,000 (2016: £399,000) and ensures our web experience remains fresh and relevant.

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

It is important for us to keep focused on the technology and continue to strive to be ahead of this new market changing process. If we can do so, it will open up many new opportunities that I hope we can develop and into which we can push the business.

Summary of key performance indicators

Our key indicators have not changed, as they are an important part of the business.

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 services. 

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.

It is clear that our small reduction in headcount has been accompanied by a rise in both registered users and turnover. Our conclusion is that we are becoming more productive and by reducing our single largest cost, potentially more profitable. This is a fine line to tread and we will not compromise on the quality of our staff. For the future, any new products could have a ready market in our increasing number of users.

STRATEGIC REPORT (continued)

Summary of key performance indicators (continued)

Principal risks and uncertainties

Economic downturn

The global economic recovery is a very slow process and as it does we hope we ride with it.

However, as I mentioned above we face many new potential issues. We have no control over the outcome and impact of the Brexit negotiations. This, mixed with the new technologies which are on their way, could make for an interesting ride.

High proportion of fixed overheads coupled with variable revenues

A reasonable 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.

Product obsolescence

Our technology that we use is always in development and constantly changing. All our technology and products are subject to technological change and could become obsolete fast.

We must 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 major 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

Once again, I would like to thank the whole team at ADVFN who tirelessly provide a global service for private investors that never sleep.

ON BEHALF OF THE BOARD

Clement Chambers

CEO

23 October 2017

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 comprised Investor Events Limited which was 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 2017 and 2016 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. Where a profit has been recorded but the average share price for the year remains under the exercise price the existence of options is likewise not dilutive.

3. Disposal of Investor Events Limited

On 19 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 on 30 September 2016. The proceeds of the disposal amounted to £40,000 and exceeded the book value of other related net assets. The profit on disposal amounted to £56,000 as net liabilities of £16,000 were disposed.

4. Events after the balance sheet date

Payments due from the shareholders of Equity Holdings and its subsidiary Equity Developments as consideration for the purchase of the companies has not been received. Amounts outstanding at the reporting date comprise £200,000 in cash and the repayment of an outstanding loan note of £1,000,000 was due on 31 July 2017. Neither the loan note nor the cash instalments have been received and therefore, ADVFN Plc has the right to acquire 99.5% of the shares of Equity Holdings Limited as the loan note has converted automatically to an option to acquire those shares. The Directors have decided not to enforce said right as the business of Equity Holdings remains outside of the longer term strategy of the group. As a result the Directors have commenced proceeding to alter the arrangements so as to potentially give ADVFN Plc a right to equity in Equity Holdings should it grow in market value.

Apart from that there are no 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 2017 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 2017 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.