Last checked at 1 Mar 2012 18:13
ADVFN PLC
Unaudited Interim Results for the Six Months Ended 31 December 2011
Chief Executive's Statement
ADVFN's half year to the end of December 2011 represents another robust performance especially when set against the background of an unprecedented period of financial dislocation.
ADVFN has come out ahead of its previous sales performance in the first half of last year and overcome a widespread chilling effect created by the uncertainties of the Euro crisis. This strong relative performance augurs well for the future. Meanwhile 2012 has started well. There appears to be no single trigger, but activity levels have made a dramatic rally from the level of the last three months of 2011 when investors were paralysed by the events of the sovereign debt crisis.
2012 has had an extremely strong start and we hope this will create strong support for growth over the coming months.
Without the unfortunate turbulence of 2011 our results would have been significantly stronger.
Our geographic diversity, our strong advertiser base and our subscription model all contributed to neutralising the impact of the Euro crisis.
Meanwhile our initial investment cycle of expanding our global revenue has concluded, with the establishment of sales offices in Japan, India and the Middle East.
While it is hard to predict the market in the best of times, it would appear that 2012 is highly likely to be a strong market for equities. This will be helpful. Meanwhile, we will continue to expand our international reach thus making our revenue model yet more diversified.
It appears likely that the US economy is finally on the road to recovery and, with this, we would expect our US business to expand, perhaps significantly.
2012 appears to be materially different in character from 2009-2011 and in its early stages at least it seems possible that equities may be experiencing a secular shift towards investment in stocks.
This is of course good news for shareholders in general and investors in ADVFN in particular.
Financial performance
Key financial performance for the period has been summarised as follows:
Six Months ended | Six Months ended | Change | |
31 December 2011 | 31 December 2010 | ||
£'000 | £'000 | £'000 | |
Turnover | 4,584 | 4,543 | 41 |
Loss for the period | (919) | (121) | (798) |
Operating Loss | (971) | (147) | (824) |
Loss per share | 0.15p | 0.02p | (0.13) |
Clem Chambers
CEO
1 March 2012
Consolidated income statement | ||||
6 months to 31 Dec | 6 months to 31 Dec | 12 months to 30 June | ||
2011 | 2010 | 2011 | ||
£'000 | £'000 | £'000 | ||
unaudited | unaudited | audited | ||
Notes | restated | |||
Revenue | 4,584 | 4,543 | 9,167 | |
Cost of sales | (213) | (208) | (538) | |
Gross profit | 4,371 | 4,335 | 8,629 | |
Share based payment | (49) | (14) | (84) | |
Amortisation of intangible assets | (529) | (589) | (1,089) | |
Other administrative expenses | (4,764) | (3,861) | (8,241) | |
Total administrative expense | (5,342) | (4,464) | (9,414) | |
Operating loss | (971) | (129) | (785) | |
Finance income | - | 6 | 7 | |
Finance expense | - | (24) | (5) | |
Loss before tax | (971) | (147) | (783) | |
Taxation | 52 | 26 | (79) | |
Loss for the period | (919) | (121) | (862) | |
Loss per share from continuing operations | ||||
Basic and diluted (pence per share) | 4 | (0.15) | (0.02) | (0.14) |
Consolidated statement of comprehensive income | ||||
6 months to 31 Dec | 6 months to 31 Dec | 12 months to 30 June | ||
2011 | 2010 | 2011 | ||
£'000 | £'000 | £'000 | ||
unaudited | unaudited | audited | ||
restated | ||||
Loss for the period | (919) | (121) | (862) | |
Other comprehensive income: | ||||
Exchange differences on translation of foreign operations | 65 | 14 | 253 | |
Deferred tax on translation of foreign held assets | (10) | - | (46) | |
Total comprehensive income for the year | (864) | (107) | (655) | |
Consolidated balance sheet | 31 Dec | 31 Dec | 30 June | |
2011 | 2010 | 2011 | ||
£'000 | £'000 | £'000 | ||
unaudited | unaudited | audited | ||
restated | ||||
Assets | ||||
Non-current assets | ||||
Property, plant and equipment | 116 | 85 | 106 | |
Goodwill | 1,733 | 1,590 | 1,697 | |
Intangible assets | 2,491 | 2,669 | 2,584 | |
Trade and other receivables | 126 | 113 | 119 | |
Total non-current assets | 4,466 | 4,457 | 4,506 | |
Current assets | ||||
Trade and other receivables | 1,067 | 1,133 | 1,121 | |
Current tax recoverable | 75 | 9 | 75 | |
Other financial assets (available for sale) | 717 | 729 | 712 | |
Cash and cash equivalents | 959 | 1,571 | 1,716 | |
Total current assets | 2,818 | 3,442 | 3,624 | |
Total assets | 7,284 | 7,899 | 8,130 | |
Equity and liabilities | ||||
Equity | ||||
Issued capital | 6,250 | 6,238 | 6,249 | |
Share premium | 7,942 | 7,902 | 7,941 | |
Merger reserve | 221 | 221 | 221 | |
Share based payments reserve | 580 | 499 | 533 | |
Foreign exchange reserve | 236 | (12) | 181 | |
Retained earnings | (10,924) | (9,302) | (10,007) | |
Total equity | 4,305 | 5,546 | 5,118 | |
Non-current liabilities | ||||
Deferred tax | 477 | 273 | 533 | |
Borrowings - obligations under finance leases | 2 | 6 | 1 | |
Total non-current liabilities | 479 | 279 | 534 | |
Current liabilities | ||||
Trade and other payables | 2,497 | 2,071 | 2,455 | |
Current tax | - | - | 18 | |
Borrowings - overdraft and obligations under finance leases |
3 |
3 |
5 | |
Total current liabilities | 2,500 | 2,074 | 2,478 | |
Total liabilities | 2,979 | 2,353 | 3,012 | |
Total equity and liabilities | 7,284 | 7,899 | 8,130 | |
Consolidated statement of changes in equity
Share capital | Share premium | Merger reserve | Share based payment reserve | Foreign exchange | Retained earnings | Total equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 July 2010 as previously stated | 6,238 | 7,900 | 221 | 485 | (26) | (8,745) | 6,073 |
Prior year adjustment | - | - | - | - | - | (436) | (436) |
6,238 | 7,900 | 221 | 485 | (26) | (9,181) | 5,637 | |
Issue of shares | - | 2 | - | - | - | - | 2 |
Equity settled share options | - | - | - | 14 | - | - | 14 |
Transactions with owners | - | 2 | - | 14 | - | - | 16 |
Loss for the period after tax | - | - | - | - | - | (121) | (121) |
Other comprehensive income | |||||||
Exchange differences on translation of foreign operations |
- |
- |
- |
- |
14 |
- |
14 |
Total comprehensive income | - | - | - | - | 14 | (121) | (107) |
At 31 December 2010 | 6,238 | 7,902 | 221 | 499 | (12) | (9,302) | 5,546 |
Issue of shares | 11 | 39 | - | - | - | 50 | |
Exercise of share options | - | - | - | (36) | - | 36 | - |
Equity settled share options | - | - | - | 70 | - | - | 70 |
Transactions with owners | 11 | 39 | - | 34 | - | 36 | 120 |
Loss for the period after tax | - | - | - | - | - | (741) | (741) |
Other comprehensive income | |||||||
Exchange differences on translation of foreign operations |
- |
- |
- |
- |
239 |
- |
239 |
Deferred tax on translation of foreign held assets |
- |
- |
- |
- |
(46) |
- |
(46) |
Total comprehensive income | - | - | - | - | 193 | - | 193 |
At 30 June 2011 | 6,249 | 7,941 | 221 | 533 | 181 | (10,007) | 5,118 |
Issue of shares | 1 | 1 | - | - | - | - | 2 |
Exercise of share options | - | - | - | (2) | - | 2 | - |
Equity settled share options | - | - | - | 49 | - | 49 | |
Transactions with owners | 1 | 1 | - | 47 | - | 2 | 51 |
Loss for the period after tax | - | - | - | - | - | (919) | (919) |
Other comprehensive income | |||||||
Exchange differences on translation of foreign operations |
- |
- |
- |
- |
65 |
- |
65 |
Deferred tax on translation of foreign held assets |
- |
- |
- |
- |
(10) |
- |
(10) |
Total comprehensive income | - | - | - | - | 55 | (919) | (864) |
At 31 December 2011 | 6,250 | 7,942 | 221 | 580 | 236 | (10,924) | 4,305 |
Consolidated cash flow statement | ||||
6 months to 31 Dec | 6 months to 31 Dec | 12 months to 30 June | ||
2011 | 2010 | 2011 | ||
£'000 | £'000 | £'000 | ||
unaudited | unaudited | Audited | ||
restated | ||||
Cash flows from operating activities | ||||
Loss for the period before tax | (971) | (147) | (783) | |
Finance costs in the income statement | - | 18 | (2) | |
Depreciation of property, plant and equipment | 134 | 64 | 44 | |
Amortisation | 529 | 589 | 1,089 | |
Impairment of financial assets | (5) | - | (3) | |
Share based payments | 49 | 14 | 84 | |
Decrease/(increase) in trade and other receivables | 47 | (243) | (237) | |
Decrease in trade and other payables | 42 | 19 | 403 | |
Net cash (used)/generated from operations | (175) | 314 | 595 | |
Interest paid | - | (24) | (5) | |
Income tax (paid)/received | (22) | 40 | 101 | |
Net cash (used)/generated by operating activities | (197) | 330 | 691 | |
Cash flows from investing activities | ||||
Interest received | - | 6 | 7 | |
Payments for property, plant and equipment | (144) | (65) | (66) | |
Purchase of intangibles | (436) | (285) | (571) | |
Acquisition of investments | - | (20) | - | |
Net cash used in investing activities | (580) | (364) | (630) | |
Cash flows from financing activities | ||||
Proceeds from issue of equity shares | 2 | 2 | 52 | |
Loans repaid (finance leases) | (1) | (10) | (13) | |
Net cash generated/(used) from financing activities | 1 | (8) | 39 | |
Net (decrease)/ increase in cash and cash equivalents | (776) | (42) | 100 | |
Exchange movements | 19 | 14 | 17 | |
Total (decrease)/ increase in cash and cash equivalents | (757) | (28) | 117 | |
Cash and cash equivalents at the start of the period | 1,716 | 1,599 | 1,599 | |
Cash and cash equivalents at the end of the period | 959 | 1,571 | 1,716 |
1. Legal status and activities
ADVFN Plc ("the Company") is principally involved in the development and provision of financial information primarily via the internet and the development and exploitation of ancillary internet sites.
The company 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.
The Company 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 2011. 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 2011, 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 2011 as described in those financial statements.
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 2011 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.
3. Prior year adjustment
During 2011 the Group upgraded its reporting systems for its subscription website which enabled it to generate more accurate information over the unexpired level of live subscriptions at any period end. The information generated by the new reports enabled the Group to accurately quantify the level of deferred subscriptions at 30 June 2011 and prior year ends. In prior years the Group had calculated deferred revenue using the information available to it, together with certain estimation techniques.
The new reports have identified that the deferred income calculated and reflected in the financial statements for prior periods was materially misstated. In accordance with IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' the comparative financial statements have been restated. The effect of the prior year adjustment on each line item within the prior year financial statements is set out below:
Consolidated income statement | |||
As originally reported 6 months to 31 December 2010 |
Prior year adjustment |
As restated 6 months to 31 December 2010 | |
£'000 | £'000 | £'000 | |
Revenue | 4,597 | (54) | 4,543 |
Profit for the period attributable to shareholders of the parent |
(67) |
(54) |
(121) |
(Loss)/earnings per share - from continuing operations | |||
Basic and diluted (pence per share) | (0.01) | (0.01) | (0.02) |
Consolidated statement of comprehensive income
| |||
As originally reported 6 months to 31 December 2010 |
Prior year adjustment |
As restated 6 months to 31 December 2010 | |
£'000 | £'000 | £'000 | |
Restated | |||
Total comprehensive income for the year attributable to shareholders of the parent |
(53) |
(54) |
(107) |
Consolidated cash flow statement | |||
As originally reported 6 months to 31 December 2010 |
Prior year adjustment |
As restated 6 months to 31 December 2010 | |
Loss for the period before tax | (93) | (54) | (147) |
Decrease in trade and other payables | (35) | 54 | 19 |
Other movements | 442 | - | 442 |
Net cash generated from operations | 314 | - | 314 |
4. Loss per share
6 months to 31 Dec | 6 months to 31 Dec | 12 months to 30 June | |
2011 | 2010 | 2011 | |
£'000 | £'000 | £'000 | |
Loss for the year from continuing operations attributable to equity shareholders |
(919) |
(121) |
(862) |
Loss per share from continuing operations | |||
Basic loss per share (pence) | (0.15) | (0.02) | (0.14) |
Diluted loss per share (pence) | (0.15) | (0.02) | (0.14) |
Shares | Shares | Shares | |
Issued ordinary shares at start of the period | 624,914,504 | 623,764,505 | 623,764,505 |
Ordinary shares issued in the period | 67,000 | 50,000 | 1,149,999 |
Issued ordinary shares at end of the period | 624,981,504 | 623,814,505 | 624,914,504 |
Weighted average number of shares in issue for the period | 624,921,422 | 623,784,614 | 624,207,656 |
Dilutive effect of options | - | - | - |
Weighted average shares for diluted earnings per share | 624,921,422 | 623,784,614 | 624,207,656 |
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.
5. Dividends
The directors do not recommend the payment of a dividend.
6. Financial statements
Copies of this statement are being posted to shareholders shortly and will be available from the company's registered office at Suite 27, Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.