Last checked at 25 Mar 2020 16:20
25 March 2020
For immediate release
ADVFN PLC
("ADVFN" or the "Group")
Unaudited Interim Results for the Six Months Ended 31 December 2019
ADVFN today announces its unaudited interim results for the six months ended 31 December 2019 (the "Period").
Chief Executive's Statement
As previously reported, sales during the first half were generally flat, although in the lead up to Brexit, advertising sales volumes were below management's expectations while traffic levels and subscription levels remained unaffected. The impact of this lower than expected advertising demand in the first half can be seen in the reported loss, which is further increased by higher overheads which represented an effort to grow sales during the Autumn of 2019.
The uncertainty created by this change to our revenue from advertising led us to significantly adjust our cost base at the end of the year and in January. As it turns out, with the uncertain and adverse impact of the Covid-19 on markets and general business activity, this pre-emptive action has proved to be fortunate.
Our reaction to the onset of Covid-19 has been to examine the potential impact of the virus on our operations and our market. We need to ensure that the welfare of our staff and the continued provision of our service is our priority. We are currently a company of home-based staff and we have looked at reasonable worst-case scenarios and discussed potential mitigating strategies to ensure the continuity of our service.
The Board believes it has reduced its cost base sufficiently to ride out the current business environment and we are beginning to see the return of advertising revenues. We are also experiencing a growth in subscriptions levels which, if sustained, will over time make up for suppressed advertising levels.
At the moment, our business seems to be performing well and with February a profitable month, we are feeling confident that we are able to weather the storm.
One of the results of the disruption to advertising revenues is that the Group's cash levels decreased to £557,000 at the period end, whereas we would have hoped to see them improve. The Directors believe this has now stabilised and we look to benefit from the reductions made to the cost base, reflected in an improvement in performance in the second half, to restore our usual cash levels in the near future.
While it is clear there are many challenges ahead, your Board is committed to seeing the business through these, suddenly, extremely unpredictable times.
Financial performance
Key financial performance for the period has been summarised as follows:
| Six Months ended | Six Months ended |
| 31 December 2019 | 31 December 2018 |
| £'000 | £'000 |
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Revenue | 3,748 | 4,265 |
Loss for the period | (399) | (214) |
Operating loss | (397) | (210) |
Loss per share (see note 3) | (1.56 p) | (0.84 p) |
Clem Chambers
CEO
25 March 2020
A copy of this announcement is available on the Group's website: www.ADVFN.com
Enquiries:
For further information please contact:
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ADVFN PLC Clem Chambers |
+44 (0) 207 070 0909 | |
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Beaumont Cornish Limited (Nominated Adviser) www.beaumontcornish.com |
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Roland Cornish/Michael Cornish
| +44 (0) 207 628 3396 | |
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. The person who arranged for the release of this announcement on behalf of the Group was Clem Chambers, Director.
Consolidated income statement |
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| 6 months to 31 Dec | 6 months to 31 Dec | 12 months to 30 June |
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| 2019 | 2018 | 2019 |
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| £'000 | £'000 | £'000 |
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| unaudited | unaudited | audited |
| Notes |
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Revenue |
| 3,748 | 4,265 | 8,714 |
Cost of sales |
| (159) | (227) | (421) |
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Gross profit |
| 3,589 | 4,038 | 8,293 |
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Share based payment |
| - | - | (2) |
Amortisation of intangible assets |
| (156) | (69) | (220) |
Other administrative expenses |
| (3,830) | (4,179) | (8,546) |
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Total administrative expense |
| (3,986) | (4,248) | (8,768) |
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Operating (loss)/profit |
| (397) | (210) | (475) |
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Finance income and expense |
| (5) | (4) | (7) |
Profit from sale of equity investment to a related party |
| - | - | 47 |
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Loss before tax |
| (402) | (214) | (435) |
Taxation |
| 3 | - | 24 |
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Loss for the period attributable to shareholders of the parent |
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(399) |
(214) |
(411) |
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Earnings per share |
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Basic and diluted | 3 | (1.56 p) | (0.84 p) | (1.60 p) |
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Consolidated statement of comprehensive income |
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| 6 months to 31 Dec | 6 months to 31 Dec | 12 months to 30 June |
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| 2019 | 2018 | 2019 |
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| £'000 | £'000 | £'000 |
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| unaudited | unaudited | audited |
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Loss for the period |
| (399) | (214) | (411) |
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Other comprehensive income: |
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Items that will be reclassified subsequently to profit or loss: |
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Exchange differences on translation of foreign operations |
| 16 | 33 | 37 |
Deferred tax on translation of foreign held assets |
| - | - | - |
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Total other comprehensive income |
| 16 | 33 | 37 |
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Total comprehensive income for the year attributable to shareholders of the parent |
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(383) |
(181) |
(374) |
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Consolidated balance sheet |
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| 31 Dec | 31 Dec | 30 June |
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| 2019 | 2018 | 2019 |
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| £'000 | £'000 | £'000 |
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| unaudited | unaudited | audited |
Assets |
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Non-current assets |
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Property, plant and equipment |
| 172 | 161 | 145 |
Goodwill |
| 978 | 971 | 978 |
Intangible assets |
| 1,467 | 1,417 | 1,447 |
Investments |
| - | 3 | - |
Deferred tax |
| 1 | 1 | - |
Trade and other receivables |
| 108 | 108 | 108 |
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| 2,726 | 2,661 | 2,678 |
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Current assets |
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Trade and other receivables |
| 491 | 812 | 693 |
Cash and cash equivalents |
| 557 | 871 | 887 |
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| 1,048 | 1,683 | 1,580 |
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Total assets |
| 3,774 | 4,344 | 4,258 |
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Equity and liabilities |
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Equity |
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Issued capital |
| 51 | 51 | 51 |
Share premium |
| 167 | 145 | 167 |
Share based payments reserve |
| 367 | 365 | 367 |
Foreign exchange reserve |
| 298 | 278 | 282 |
Retained earnings |
| 436 | 1,063 | 835 |
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| 1,319 | 1,902 | 1,702 |
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Current liabilities |
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Trade and other payables |
| 2,455 | 2,442 | 2,556 |
Current tax |
| - | - | - |
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| 2,455 | 2,442 | 2,556 |
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Total liabilities |
| 2,455 | 2,442 | 2,556 |
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Total equity and liabilities |
| 3,774 | 4,344 | 4,258 |
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Consolidated statement of changes in equity
| Share capital | Share premium | Share based payment reserve | Foreign exchange | Retained earnings | Total equity | ||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||
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At 1 July 2018 - as originally stated | 51 | 145 | 365 | 245 | 1,277 | 2,083 | ||||||
Effect of the application of IFRS 9* | - | - | - | - | (31) | (31) | ||||||
| 51 | 145 | 365 | 245 | 1,246 | 2,052 | ||||||
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Loss for the period after tax* | - | - | - | - | (183) | (183) | ||||||
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Other comprehensive income |
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Exchange differences on translation of foreign operations |
- |
- |
- |
33 |
- |
33 | ||||||
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Total comprehensive income | - | - | - | 33 | (183) | (150) | ||||||
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At 31 December 2018 | 51 | 145 | 365 | 278 | 1,063 | 1,902 | ||||||
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Equity settled share options | - | - | 2 | - | - | 2 | ||||||
Share issues |
| 22 |
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| 22 | ||||||
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Transactions with owners | - | 22 | 2 | - | - | 24 | ||||||
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Loss for the period after tax | - | - | - | - | (228) | (228) | ||||||
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Other comprehensive income |
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Exchange differences on translation of foreign operations | - | - | - | 4 | - | 4 | ||||||
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Total comprehensive income | - | - | - | 4 | (228) | (224) | ||||||
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At 30 June 2019 | 51 | 167 | 367 | 282 | 835 | 1,702 | ||||||
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Loss for the period after tax | - | - | - | - | (399) | (399) | ||||||
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Other comprehensive income |
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Exchange differences on translation of foreign operations |
- |
- |
- |
16 |
- |
16 | ||||||
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Total comprehensive income | - | - | - | 16 | (399) | (383) |
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At 31 December 2019 | 51 | 167 | 367 | 298 | 436 | 1,319 | ||||||
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*The application of the Expected Loss method under IFRS 9 on 1 July 2018 has resulted in an adjustment of £31,000 at that date. This, combined with £183,000 above, amounts to £214,000 which is the total loss for the period after tax as previously reported at 31 December 2018.
Consolidated cash flow statement |
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| 6 months to 31 Dec | 6 months to 31 Dec | 12 months to 30 June |
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| 2019 | 2018 | 2019 |
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| £'000 | £'000 | £'000 |
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| unaudited | unaudited | audited |
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Cash flows from operating activities |
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(Loss)/profit for the year |
| (399) | (214) | (411) |
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Taxation expense |
| - | - | (24) |
Net finance income in the income statement |
| 5 | 4 | 7 |
Share based payment |
| - | - | 2 |
Depreciation of property, plant and equipment |
| 52 | 36 | 81 |
Amortisation |
| 156 | 69 | 220 |
Disposal of equity investment to a related party |
| - | - | (47) |
Decrease in trade and other receivables |
| 202 | 46 | 134 |
(Decrease)/increase in trade and other payables |
| (101) | 129 | 243 |
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Net cash generated by continuing operations |
| (85) | 70 | 205 |
Income tax paid |
| - | (22) | 2 |
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Net cash generated by operating activities |
| (85) | 48 | 207 |
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Cash flows from financing activities |
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Issue of share capital |
| - |
| 22 |
Interest paid |
| (5) | (4) | (7) |
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| (5) | (4) | 15 |
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Cash flows from investing activities |
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Payments for property, plant and equipment |
| (79) | (61) | (90) |
Purchase of intangibles |
| (176) | (179) | (360) |
Receipt from related party |
| - | - | 50 |
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Net cash used by investing activities |
| (255) | (240) | (400) |
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Net decrease in cash and cash equivalents |
| (345) | (196) | (178) |
Exchange differences |
| 15 | 6 | 4 |
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Net decrease in cash and cash equivalents |
| (330) | (190) | (174) |
Cash and cash equivalents at the start of the period |
| 887 | 1,061 | 1,061 |
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Cash and cash equivalents at the end of the period |
| 557 | 871 | 887 |
1. Legal status and activities
ADVFN Plc is principally involved in the development and provision of financial information primarily via the internet and the development and exploitation of ancillary internet sites.
ADVFN Plc is a public limited liability company incorporated and domiciled in England and Wales. The address of its registered office is Suite 27, Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.
ADVFN Plc is quoted on the Alternative Investment Market ("AIM") of the London Stock Exchange.
2. Basis of preparation
The unaudited consolidated interim financial information is for the six-month period ended 31 December 2019. The financial information does not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2019, which were prepared under IFRS as adopted by the European Union (EU).
The accounting policies adopted in this report are consistent with those of the annual financial statements for the year to 30 June 2019 as described in those financial statements.
The financial statements are presented in Sterling (£) rounded to the nearest thousand except where specified.
The unaudited interim financial information does not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 30 June 2019.
The interim financial information has been prepared on the going concern basis which assumes the Group will continue in existence for the foreseeable future.
Our reaction to the onset of Covid-19 has been to examine the potential impact of the virus on our operations and our market. We need to ensure that the welfare of our staff and the continued provision of our service is our priority. We are already a company of home-based staff and we have looked at reasonable worst-case scenarios and discussed potential mitigating strategies to ensure the continuity of our service.
The Board believes it has reduced its cost base sufficiently to ride out the current business environment and we are beginning to see the return of advertising revenues. We are also experiencing a growth in subscriptions levels which, if sustained, will over time make up for suppressed advertising levels.
At the moment, our business seems to be performing well and with February a profitable month we are feeling confident that we are able to weather the storm.
One of the results of the disruption to advertising revenues is that the Group's cash levels decreased to £557,000 at the period end, whereas we would have hoped to see them improve. The Directors believe this has now stabilised and we look to benefit from the reductions made to the cost base, reflected in an improvement in performance in the second half, to restore our usual cash levels in the near future.
No material uncertainties that cast significant doubt about the ability of the Group to continue as a going concern have been identified by the directors. Accordingly, the directors believe it is appropriate for the interim financial statement to be prepared on the going concern basis.
The interim financial information has not been audited nor has it been reviewed under ISRE 2410 of the Auditing Practices Board. The financial information presented does not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The Group's statutory accounts for the year to 30 June 2019 have been filed with the Registrar of Companies. The auditors, Grant Thornton UK LLP reported on these accounts and their report was unqualified and did not contain a statement under section 498(2) or Section 498(3) of the Companies Act 2006.
New standards adopted in the period:
IFRS 16 Leases
The standard has replaced IAS 17 and introduces a single lessee accounting model. Under the provisions of the new standard most leases, including the majority of those previously classified as operating leases, are brought onto the financial position statement as a right-of-use asset and as an offsetting lease liability. Both asset and liability are based on present values of the lease payments due over the term of the lease with the asset being depreciated in accordance with IAS 16 'Property, plant and equipment' and the liability increased by the addition of interest and reduced as lease payments are made.
3. Earnings per share
| 6 months to | 6 months to | 12 months to |
| 31 Dec 2019 | 31 Dec 2018 | 30 June 2019 |
| £'000 | £'000 | £'000 |
|
|
|
|
Loss for the year attributable to equity shareholders | (399) | (214) | (411) |
|
|
|
|
Earnings per share (pence) |
|
|
|
Basic | (1.56 p) | (0.84 p) | (1.60p) |
Diluted | (1.56 p) | (0.84 p) | (1.60p) |
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| Shares | Shares | Shares |
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Weighted average number of shares in issue for the period | 25,657,927 | 25,623,845 | 25,657,927 |
Dilutive effect of options | - | - | - |
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Weighted average shares for diluted earnings per share | 25,657,927 | 25,623,845 | 25,657,927 |
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Where a loss is reported for the period 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.
In addition, where a profit has been recorded but the average share price for the period remains under the exercise price the existence of options is not dilutive.
4. Events after the balance sheet date
Our assessment of the impact of the COVID-19 virus is set out in Note 2. There are no other events of significance occurring after the balance sheet date to report.
5. Dividends
The directors do not recommend the payment of a dividend.
6. Financial statements
Copies of these accounts are available from ADVFN Plc's registered office at Suite 27, Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA or from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.
www.companieshouse.gov.uk
and from the ADVFN plc website:
www.ADVFN.com