ADVFN Regulatory News (AFN)

15 Nov 2006 07:30

ADVFN PLC15 November 2006 Embargoed for release until 7.30 a.m. Wednesday 15th November 2006 ADVFN PLC ('ADVFN' or 'the Company') Preliminary Results for the Year Ended 30 June 2006 ADVFN, Europe's number one stocks and shares website, today announcespreliminary results for the year ended 30 June 2006. Highlights: • Turnover up 35% to £4.5M (2005: £3.3M) • ADVFN user numbers up over 30% to over 700,000 (2004: 540,000) • Total user numbers across all group media properties up 108% to over 2,000,000 (2005: 960,000) • Equity Holdings group successfully acquired and integrated into the group during second half of the year • InvestorHub.com Inc and SI Holdings LLC successfully acquired since the year- end • £1M cash raised since year-end to strengthen balance sheet and provide for further expansion For further information, please contact: ADVFN Clem Chambers, Managing Director clemc@advfn.com Francesca De Franco, PR francescad@advfn.com 020 7070 0932 Chairman's Statement Behind the scenes ADVFN has undergone a transformation. In the past I have saidto look at the website to see the results of our efforts, but this year thisdoesn't do justice to the extent of developments in the last year. ADVFNis no longer solely a UK-centric stocks and shares website. If you are in Italy,Japan, Brazil, Germany, France, India or the USA you will see a geo-targeted,native language version of the site. We are operating on a global basis, whileenjoying the cost benefits of managing these sites, primarily, from London. ADVFN is now becoming an international brand. We have taken data from most ofthe world's stock exchanges for many years; however we have now tailoredthis data to specific localized regional markets. We have been number one in theUK for some years now; while this is very good, the UK is only a small part ofthe opportunity for ADVFN. Our tactics have been to address familiar markets from London and partner interritories such as Japan and Brazil which, although exciting and potentiallylucrative, are hard for us to approach directly. Meanwhile we have madeacquisitions when opportunities have arisen. Each of these has offered us thechance to incorporate complementary businesses at a keen purchase price. Thismeans we are currently in a position where we have all the pieces in place togrow in territories we have already entered and can replicate this model in newglobal markets. Since the year end we have made big strides towards our growth strategy bybuying InvestorsHub.com and Silicon Investor - two top five online investmentcommunity websites in the North American market which have over 100 millioncombined monthly page views. The purchase was completed in September of thisyear and we are now starting the process of integrating the businesses. Theaddition of these two sites has doubled the size of ADVFN's traffic - asignificant development for our future revenue development. Advertising space onthe UK part of ADVFN often sells out months in advance, and once integrated thisnew traffic greatly expands our advertising inventory. We are constantly addingnew pages and features to keep up with the demand from our advertisers and thisnew traffic is an exciting boost, arriving as it does within a strongadvertising market with significant pent up demand. We are also pleased to report ongoing progress from Equity Development, which weacquired in February of this year. The first turnover milestone, in respect ofthe financial year to June 2006, was comfortably met. Equity Development's coreproduct is the production of high quality equity research. Their profitablefinancial year saw a rise of over 40% in the number of companies paying for thisproduct. In addition, Equity Development was able to expand its range ofservices approved by the FSA and became an authorised Corporate Adviser forcompanies on the thriving PLUS Markets exchange. ADVFN's wholly-owned dating website CupidBay.com announced at the end ofMarch that it had surpassed the milestone of one million registered users. Inthe last seven months user numbers have accelerated and now stand at 1.3million; an increase of 30%. With page impressions of 45 million a month andapproximately 1,800-2,000 new members registering each day, the site'sfull advertising potential is ready to be exploited. Since its acquisition in July 2005, Fotothing.com has continued its transitionfrom a niche product to a more mainstream website that now sees 100 new sign upsa day and boasts approximately 120,000 registrants. At the time of purchase thesite had around 4000 users; reaching 95,000 plus users at the end of June. I always take this opportunity to thank our staff for their hard work and thistime is no different. I also want to welcome new members of the ADVFN team atour joint ventures in Brazil, Japan, and at InvestorsHub.com and SiliconInvestor. It has been an exciting year of developments. Michael Hodges Chairman 14 November 2006 Managing Director's Review This has been a very busy year for ADVFN and has seen sales grow from £3,303,000last year to £4,463,000; a growth of 35% in turnover. It has seen both oursubscription levels grow to record levels and our advertising income risestrongly to reach historic highs. We have also been on the acquisition trail,buying Equity Development and entering the acquisition process withInvestorsHub.com and Silicon Investor, two superb US investment bulletin boardswhich we have subsequently purchased. This strong sales performance extends the consistent year-by-year growth andexpansion of ADVFN. We have set out to grow by investing both at home and abroadand this objective is being realised at an accelerating rate. Alongsidedevelopments in direct markets we have been developing our Japanese andBrazilian joint ventures which by the year end were reaching completion, andhave since enjoyed successful soft launches. By aggressively investing, we have not only grown sales but also broadened thescope of our offering and our international revenue from both subscriptions andadvertising sales. The ADVFN platform is now addressing exciting global marketswith local language versions of the site and this is driving growing levels ofbusiness. This is most easily appreciated when looked at in terms of registereduser acquisition which is currently running at levels 50% higher than in 2005. We now have sites in Brazilian, English (British and American), French, German,Italian and Japanese, with a geo-targeted site aimed at the Indian market and anew joint venture for China and Hong Kong. Meanwhile the acquisition ofInvestorsHub.com and Silicon Investor, a process that began in the spring of2006, has added significant traffic and sees ADVFN become a top tier US stockinformation provider. This platform gives us critical mass in the key US market,and 2007 will see us bring our content to the Silicon Investor andInvestorsHub.com user bases while exploiting the exciting revenue opportunitiesprovided by the leading equity market in the world. ADVFN has had goodadvertising sales in the US in 2006; and 2007 should see a substantial rise inrevenue from North America. Current Trading Since June of this year our user base has expanded and has grown a further 10%from 700,000 to over 770,000. Across all our businesses, total user numbers grew100% over the last year to 2,000,000 from 960,000 at June 2005. Prospects We have long stated that we believe that it is in the best interests ofshareholders that ADVFN invests to grow and that no one wants to own a tiny cashcow operating in a market that would fast pass it by. As such we have carefullyinvested our capital into developing ADVFN so that it can become more than asmall niche provider of UK price data and share chat. We feel that this processis coming to fruition. 2007 will see ADVFN using its global platform - and inparticular its US acquisitions - to generate further strong top line growth.Gross margins for an online service are high and this will drive a strengtheningbottom line. We are particularly enthusiastic about the prospects forInvestorsHub.com and Silicon Investor where traffic levels offer many lucrativeopportunities for sales revenue and where traffic levels can be enhanced byADVFN's information products. This leads us to believe we are opening a new chapter in ADVFN's history,one in which we will grow quickly. Clem Chambers Managing Director 14 November 2006 Consolidated Profit and Loss Account for the year ended 30 June 2006 Continuing Acquisitions Total 2006 2006 2006 2005 Notes £'000 £'000 £'000 £'000 Turnover 4,088 375 4,463 3,303 Cost of sales (374) (163) (537) (182) Gross profit 3,714 212 3,926 3,121 Administrative expensesExceptional item - impairment loss - - - (1,027)Other administrative expenses (4,874) (255) (5,129) (3,252)Total administrative expenses (4,874) (255) (5,129) (4,279) Operating loss (1,160) (43) (1,203) (1,158) Exceptional item: Gain on part disposal 761 - 761 2,202of associates Share of operating losses of associate (567) - (567) (72) (966) (43) (1,009) 972 Net interest 45 - 45 29 (Loss)/profit on ordinary activities (921) (43) (964) 1,001before taxation Tax on (loss)/profit on ordinary 58 - 58 11activities (Loss)/profit on ordinary activities (863) (43) (906) 1,012after taxation (Loss)/profit per ordinary shareBasic 2 (0.19)p 0.23pFully diluted 2 (0.19)p 0.22p All operations are continuing. There were no recognised gains and losses other than the loss for the year. Balance Sheets at 30 June 2006 Group Company Group Company 2006 2006 2005 2005 Notes £'000 £'000 £'000 £'000Fixed assetsIntangible assets 874 21 281 281Tangible assets 1,681 1,407 1,180 820Investments 2,402 1,055 2,150 20 4,957 2,483 3,611 1,121Current assetsDebtors 938 1,200 655 1,049Investments 48 29 13 13Cash at bank and in hand 938 862 1,824 1,790 1,924 2,091 2,492 2,852Creditors: amounts falling due withinone year (1,512) (1,305) (974) (974) Net current assets 412 786 1,518 1,878 Total assets less current liabilities 5,369 3,269 5,129 2,999 Creditors: amounts falling due after more (28) (28) (12) (12)than one year 5,341 3,241 5,117 2,987 Capital and reservesCalled up share capital 4,798 4,798 4,618 4,618Share premium account 5,634 5,634 5,403 5,403Merger reserve 221 221 - -Shares to be issued 498 498 - -Profit and loss account (5,810) (7,910) (4,904) (7,034)Shareholders' funds 3 5,341 3,241 5,117 2,987 The financial statements were approved by the Board of Directors on 14 November2006. Consolidated Cash Flow Statement for the year ended 30 June 2006 2006 2005 Notes £'000 £'000 Net cash inflow from operating activities 4 65 951 Returns on investment and servicing of financeInterest received 50 48Interest paid (5) (19) 45 29 Capital expenditurePayments to acquire tangible fixed assets (1,067) (1,666)Payments to acquire investments (15) (33) (1,082) (1,699) Acquisitions (246) - Net cash outflow before financing (1,218) (719) FinancingIssue of ordinary share capital 344 2,139Share issue costs (3) (121)Capital element of finance leases and hire (24) (5)purchase contracts repaidNet cash inflow from financing 317 2,013 (Decrease)/increase in cash 5,6 (901) 1,294 Notes for the year ended 30 June 2006 1. General The financial information herein does not constitute statutory accounts asdefined in section 240 of the Companies Act 1985. The financial information has been extracted from the group's 2006 statutoryfinancial statements upon which the auditors reported on 14 November 2006. Theiropinion is unqualified and does not include any statement under section 237 ofthe Companies Act 1985. The accounts have been prepared in accordance withapplicable accounting standards and under the historical cost convention. Copies of the annual report are being posted to shareholders and copies will beavailable from the company's registered office at 642a Lea Bridge Road,Leyton, London, E10 6AP. 2. (Loss)/earnings per ordinary share The calculation of the basic earnings or loss per share is based on the earningsattributable to ordinary shareholders divided by the weighted average numbers ofshares in issue during the year. The calculation of diluted earnings per share is based on the basic earnings pershare, adjusted to allow for the issue of shares and the post tax effect ofdividends and/or interest, on the assumed conversion of all dilutive options andother dilutive potential ordinary shares. Reconciliations of earnings and weighted average number of shares used in thecalculation are set out below. 2006 2005 Number of Loss Number of Earnings Loss shares per share Profit shares per share £'000 '000 p £'000 '000 p (Loss)/profit for the year (906) 1,012Weighted average number of shares 469,165 439,932Basic (loss)/ earnings per share (0.19)p 0.23p Number of shares under option - 45,478Number of shares that would havebeen issued at average market value - (20,096)Diluted earning per share (906) 469,165 (0.19)p 1,012 465,314 0.22p There is no diluted loss per share as the options are anti-dilutive. 3. Reconciliation of movements in shareholders' funds 2006 2005 £'000 £'000 (Loss)/profit for the financial year (906) 1,012Net receipts from issues of shares 632 2,018Shares to be issued 498 -Net increase in shareholders' funds 224 3,030Shareholders' funds at 1 July 2005 5,117 2,087Shareholders' funds at 30 June 2006 5,341 5,117 4. Reconciliation of operating loss to net cash inflow from operating activities 2006 2005 £'000 £'000 Operating loss (1,203) (1,158)Exceptional item - impairment loss - 1,027Amortisation 337 260Depreciation 678 621Increase in debtors (135) (100)Increase in creditors 388 301Net cash inflow from operating activities 65 951 The exceptional items were all non-cash and had no impact on the cash flow. 5. Reconciliation of net cash flow to movement in net funds 2006 2005 £'000 £'000 (Decrease)/increase in cash for the year (901) 1,294Cash acquired on acquisitions 15 -Inception of new finance leases and hire purchase agreements (75) (23)Cash outflow from capital repayments of hire purchase agreements 24 5Movement in net funds in the year (937) 1,276Net funds at 1 July 2005 1,806 530Net funds at 30 June 2006 869 1,806 6. Analysis of movements in net funds At Non-cash At 1 July 2005 Cash flow Acquisitions items 30 June 2006 £'000 £'000 £'000 £'000 £'000 Cash in hand and at bank 1,824 (901) 15 - 938Finance leases and hire purchase (18) 24 - (75) (69)agreements 1,806 (877) 15 (75) 869 This information is provided by RNS The company news service from the London Stock Exchange