ADVFN Regulatory News (AFN)

30 Mar 2007 12:53

ADVFN PLC30 March 2007 Embargoed for release until 30th March 2007 ADVFN PLC ('ADVFN' or 'the Company') Unaudited Interim Results for the Six Months Ended 31 December 2006 ADVFN, Europe's leading stocks and shares website, today announces its unauditedinterim results for the six months ended 31 December 2006. Highlights: • Turnover up 45.6% to £2.644M (2005 : £1.82M) • ADVFN user numbers up over 30% to 810K (2005 : 620K) • Total group user numbers up over 82% to 3.1M at the report date compared to 1.7M at the last interim report date of 28 March 2006 • Successful acquisition and integration of US subsidiaries InvestorsHub and Silicon Investor during the period. Clem Chambers, Managing Director of ADVFN commented: "ADVFN is at an exciting phase in its development. Users, subscribers,subscription income, traffic and advertising revenue are all at record highs andwe are now a truly international company. Accelerated sales growth, due in partto our overseas properties, is enabling ADVFN to fast approach a post start-upstage of positive cash flow and profits. Whilst attaining profitability is themain focus, we also realise that there is still plenty of scope to expand intountapped markets which offer ADVFN many opportunities and potential revenuestreams." ADVFN PLC Chairman's Statement These interim figures show that ADVFN is growing at an accelerated pace. Thecompany has been in a continuous investment phase since its inception in 1999and this long-term effort has fed through into sales growth, which now hasconsiderable momentum. While the UK is still responsible for the bulk of ADVFN's turnover, thisdependency is diminishing as the company's international markets continue togrow. ADVFN's record over the last few years has established a pattern of growth andwith our site now flourishing in a number of markets, we feel confident that wecan sustain this level of progress. The US is clearly a key market for futuregrowth and InvestorsHub and Silicon Investor put us in a strong position tounlock North America. Post-acquisition integration has run smoothly and thisbodes well for our plans to be a major player in the US within three years.Progress in the US and in other international markets is now developing beyondexpectations. This has led us to revise and tighten our focus on these marketsin order to drive home the advantage. Although not materially affecting our costbase, we now expect Europe and the Americas to double the scope and scale of ourbusiness in the next two-to-three years. Because this growth is built on a business platform with strong operationalleverage, our target is to reach cash flow neutrality in calendar year 2007.Moreover we are confident that we can sustain this level of performance in thelong term. Michael J HodgesChairman30th March 2007 Managing Director's Review Operating Review I am pleased to present a positive set of results which show a 45.6% increase inturnover compared to the same period last year. This has been achieved throughadditional subscription income and, in particular, additional advertising incomegenerated from the increase in our user numbers which have risen by 30% to 810Kcompared to the same period last year. Our other businesses are also doing well as can be seen from the exceptionalgrowth in overall group user numbers. These are up by 82% to 3.1M at the reportdate compared to the previous interim report date of 28th March 2006, with thisyear's figures seeing the inclusion of our new US subsidiaries for the firsttime. Whilst turnover rose by 45.6%, total administrative expenses only rose by 27% to£3,079K compared to the same period last year. The company's administrativeexpenses include substantial depreciation charges and this period also includesgoodwill amortisation regarding acquisitions of £82K and £78K in optionvaluation expenses under the new FRS20 rules together with the inclusion of theadministrative expenses of our acquisitions - Equity Holdings for the entireperiod and our US acquisitions for just over half of the period, together withan element of gearing up costs for localised sites. Our net profits have alsobeen negatively impacted by a substantial exceptional item, this being £372K forour share of associates' losses. Unlike the previous periods we have not hadthese charges offset by benefits from any exceptional gains on disposals. Since our acquisition of InvestorsHub and related fundraising, the strength ofour balance sheet has been greatly increased with substantially higher cash, netcurrent assets and net assets compared to both last year and the June year endfigures. Current Trading ADVFN has reached an important milestone - it is now truly international. WhileADVFN has been building a global platform for several years, its income wasmainly derived from the UK. I'm happy to report that during the first half offinancial year 06/07, ADVFN has made significant international progress withgrowing business in a number of territories; especially Brazil, Italy and NorthAmerica. This achieves two things: it establishes ADVFN as a proven internationalplatform, which paves the way for further global expansion, and provides impetusfor the sales growth (both subscription and advertising revenues) necessary toenter into a post-start up position of positive cash flow and profits. Having proven itself commercially and enjoyed a strong growth period in the lastfew years, ADVFN is now entering the final stage in the product developmentcycle; a stage which leads to profitability. In tandem with this, the companycontinues to position itself for further expansion into untapped markets, sowhile we have established a proven model in four territories there remains muchmore opportunity ahead. The ADVFN website is built to enable localised roll outat minimal cost, so once we have consolidated our recent gains we will look torepeat this successful blueprint in additional countries. Our overseas projects have proved that we can build market leading nativelanguage sites while centralising the production and costs in London.Furthermore, ADVFN's US sites InvestorsHub and Silicon Investor have put us incontention in the world's biggest market. Its largely untapped advertisinginventory will prove an important asset going forwards; an asset that is alreadysignificantly contributing to the group's sales growth. Our prospects for growth are underlined by these interim results, which give agood indication of our overall progress. Equity Development has contributed tothese strong results by turning in an excellent performance. The third partyresearch market is coming of age with more and more companies appreciating thebenefit of commissioned research. The UK's plethora of PLCs increasingly need toraise their profile to reach both institutional and retail investors. Prospects CupidBay and Fotothing continue to grow their user bases and representsignificant traffic. Whilst income from these properties is not yet stellar,their traffic remains valuable as is constantly highlighted by M&A activity inthe internet space. Developments on CupidBay's business model are showingpromise and we are hopeful that this will turn the site into a significantprofit centre in due course. ADVFN is generating a record level of registrations a day; approximately twicethe level of a year ago. I'm also pleased to report that subscribers,subscription income, traffic and advertising revenue are all at record highs. Assuch, these figures are concrete signs that our investments in the companystrategy for growth are bearing fruit. We are confident that this progress isset to continue and is on course to deliver our plans for both growth andprofitability. Clem ChambersManaging Director30th March 2007 ADVFN PLCConsolidated Profit and Loss Accountsfor the six months ended 31 December 2006 Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Turnover 2,644 1,816 4,463 Cost of sales (222) (91) (537) __________ __________ __________Gross profit 2,421 1,725 3,926Administrative expensesAmortisation of goodwill (82) - (77)Option valuation expense (78) - -Other administrative expenses (2,919) (2,417) (5,052) __________ __________ _________Total administrative expenses (3,079) (2,417) (5,129) __________ __________ _________Operating loss (658) (692) (1,203) Share of operating losses of associates (372) (132) (567)Exceptional item : gain on part disposal ofassociates - 723 761 __________ __________ __________ (1,030) (101) (1,009)Net interest 8 21 45 __________ __________ __________ Loss on ordinary activities before taxation (1,022) (80) (964) Tax on loss on ordinary activities - - 58 __________ __________ __________ Loss on ordinary activities after taxation (1,022) (80) (906) __________ __________ __________ Loss per ordinary share (0.188p) (0.017p) (0.19p) There were no recognised gains or losses other than the result for the financialperiod. ADVFN PLCConsolidated Balance Sheetsat 31 December 2006 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Fixed AssetsIntangible assets 2,343 152 874Tangible assets 1,756 1,519 1,681Investments 1,909 2,741 2,402 6,008 4,412 4,957 Current AssetsDebtors 1,025 556 938Investments 47 28 48Cash at bank and in hand 1,382 1,061 938 2,454 1,645 1,924 Creditors: amounts falling due within one year (1,283) (1,010) (1,512) Net current assets 1,171 635 412 Total assets less current liabilities 7,179 5,047 5,369 Creditors: amounts falling due after one year (41) - (28) Net assets 7,138 5,047 5,341 Capital and ReservesCalled up share capital 5,870 4,621 4,798Share premium account 7,607 5,410 5,634Merger reserve 221 - 221Shares to be issued 332 - 498Option valuation reserve 252 - -Profit and loss account (7,144) (4,984) (5,810) Shareholders' funds 7,138 5,047 5,341 ADVFN PLCConsolidated Cash Flow Statementsfor the six months ended 31 December 2006 Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited £'000 £'000 £'000Net cash (outflow) /inflow from operatingactivities (402) (136) 65 Returns on investment and servicing offinance Net interest 8 21 45 Capital expenditurePayments to acquire tangible fixed assets (392) (636) (1,067)Payments to acquire investments - - (15) (392) (636) (1,082) Acquisitions (1,637) - (246) Net cash outflow before financing (2,423) (751) (1,218) FinancingIssue of ordinary share capital 3,053 10 344Share issue costs (174) - (3)Capital element of finance leases repaid (12) (7) (24)Net cash inflow from financing 2,867 3 317 Increase / (decrease) in cash 444 (748) (901) ADVFN PLC Notes to the interim statementfor the six months ended 31 December 2006 1. Loss per ordinary share Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Loss for the period £'000 (1,022) (80) (906) Weighted average number of shares '000 544,618 461,229 469,165 Loss per share p (0.188p) (0.017p) (0.19p) 2. Reserves Profit and loss Option valuation Share premium account reserve account £'000 £'000 £'000 At 1 July 2006 (5,810) - 5,634Prior year adjustment re FRS20 option valuations (174) 174 -Foreign exchange difference re associates (138) - -Options valuation adjustment for the period - 78 -Loss retained for the period (1,022) - - At 31 December 2006 (7,144) 252 3,145 3. Reconciliation of operating loss to net cash outflow fromoperating activities Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Operating loss (658) (692) (1,203)Depreciation 456 303 678Amortisation - licences 21 130 260Amortisation -goodwill 82 - 77Decrease / (increase )in debtors (87) 99 (135)Increase / (decrease) in creditors (216) 24 388 Net cash (outflow) / inflow from operating activities (402) (136) 65 4. The directors do not recommend the payment of a dividend. 5. The financial information contained in this document does notconstitute statutory accounts within the meaning of Section 240 of the CompaniesAct 1985. The financial information for the year ended 30 June 2006 is extractedfrom the audited financial statements for that period on which the auditors gavean unqualified report. A copy of those financial statements has been filed withthe Registrar of Companies. 6. The interim financial information has been prepared in accordancewith applicable accounting standards and under the historical cost convention.The principal accounting policies of the Company have remained unchanged fromthose set out in the Company's June 2006 Annual Report and Financial Statementsexcept for the adjustments resulting from the adoption of FRS20 in the period asdescribed below. The Company has adopted FRS20 with effect from 1 July 2006.FRS20 requires the recognition of a charge to the profit and loss account forall applicable share based payments, including share options. The Company hasequity-settled share based payments but no cash-settled share based payments.All share based payments awards granted after 7 November 2002 which had notvested prior to 1 July 2006 are recognised in the financial statements at theirfair value at the date of grant. As vesting periods and non-market based vesting conditionsapply, the expense is allocated over the vesting period, based on the bestavailable estimate of share options expected to vest. Estimates are revisedsubsequently if there is any indication that the number of share optionsexpected to vest differs from previous estimates. Any cumulative adjustmentprior to vesting is recognised in the current period. All equity-settled sharebased payments are ultimately recognised as an expense in the profit and lossaccount with a corresponding credit to the option valuation reserve. The adoption of FRS20 requires a prior period adjustment to bemade for awards granted before 1 July 2006. This has created an opening balancewithin the option valuation reserve at 1 July 2006 of £174,000. 7. Copies of this statement are being posted to shareholders shortlyand will be available from the company's registered office at Suite 27, Essex Technology Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA. This information is provided by RNS The company news service from the London Stock Exchange