5th Nov 2007 13:00
On-Line PLC05 November 2007 On-line PLC ('On-line' or 'the Company') Preliminary Results for the Year Ended 30 June 2007 On-line today announces preliminary results for the year ended 30 June 2007. For further information, please contact: Michael Hodges, Chairman and Managing Director [email protected] Francesca De Franco, PR [email protected] 020 7070 0932 Fiona Kindness, Grant Thornton UK LLP (Nominated Adviser) 020 7728 3414 On-line PLC Chairman's Statement During the past year we have continued our primary focus of working with ourinvestments to maximise their future potential. As regards the figures for theyear ended 30 June 2007, this is the first year our accounts have been preparedin accordance with FRS 20 which specifies the accounting treatment to be adopted(including the disclosures to be provided) by companies making share-basedpayments, which includes all types of option schemes. The accounts aretherefore set out in a slightly different way to those you may have seen before.In our interims we announced a turnover of £27,000 and a loss for the half-yearof £211,000. For the full year our turnover has increased to £54,000, up by 50%from 2006 and our overall loss for the year has increased to £279,000 (2006:£103,000). As was explained in my Chairman's statement with the interims thesize of these losses is predominantly due to the amount being written off ourinvestment in ALL IPO, (£211,000 at the interim stage and £273,000 for the fullyear) where its share price fell over the period and under accountingconventions is required to be stated at the lower of cost and net realisablevalue. As at the half year, I would like to note that accounting conventions donot allow us to include a similar uplift in the value of ADVFN which at theyear-end has a market value of over £2.5M more than the cost at which it isincluded within the balance sheet. It is also worth mentioning that ouroperating loss reduced by over 60% to £7,000 from £18,000, due to very closecontrol of overheads and that if it were not for having to bear the £11,000 costfor the first time in connection with the adoption of FRS 20 relating toexpensing the value of share options, that £7,000 operating loss would actuallyhave been a £4,000 operating profit. ADVFN PLC ADVFN has once again continued to increase its presence outside of the UK andduring the year ended 30 June 2007 it has made great progress in the USA,Brazil, Italy and France with significantly increased bulletin board activitiesin those jurisdictions which has led to increased advertising revenues. Sincethe acquisitions of InvestorsHub and Silicon Investor in the USA, ADVFN'sinternet traffic has risen greatly. Its non-internet business, EquityDevelopment, which primarily provides sponsored equity research in the UK, isalso making a very positive contribution to the group's performance and itsmanagement have recently achieved their second year earn-out growth targetsagreed at the time of the acquisition. ALL IPO PLC Whilst not yet generating significant revenues, All IPO has continued to buildvaluable relationships within the City and has made good progress in this area.This has allowed it to make 66 IPOs available to its members during the year to30 June 2007 (2006: 14). It still needs to continue its drive to ensure that itcan access the more mainstream IPOs as they become available whilst expandingits membership numbers to which it can offer financial products to. Financial overview We have endeavoured to ensure our investments develop in a strong way so that wecan benefit from their growth and expansion. As reported above, our turnover hasincreased and our operating loss for the year has more than halved to £7,000from £18,000 for year ending 2006. However, our loss on ordinary activities hasincreased from the figure of £211,000, reported at the interim stage, to£279,000 for the year, which includes an amount written off investments of£273,000. Financial performance Key financial performance for the year has been analysed as follows: Year to Year to Change 30 June 2006 30 June 2007 Change £'000 £'000 £'000 % Turnover 54 36 18 50Operating loss (7) (18) 11 61 Strategy Our strategy is to continue to work with our investments to try and ensure theirsuccess while at the same time looking for new opportunities that the companymight benefit from. Operating costs Our costs are reasonably fixed and predictable. We have taken steps to reduceour overheads to the absolute minimum and we expect this to continue as we moveforward. Research and development The company continues to invest in the quality and design of our products. Webelieve continued investment in our research and development is fundamental tothe continuing growth of the business. Environmental policy Management continued to look for ways to develop the company's environmentalpolicy during the year. It is our objective to consistently improve ourperformance in this area. Summary of key performance indicators The directors have monitored the progress of the overall company strategy andthe individual strategic elements by reference to certain financial andnon-financial key performance indicators. These are based on indicators from ourinvestments in ADVFN PLC and ALL IPO PLC and are as follows:- 2007 2007 2006 2006ALL IPO PLC Actual Target Actual Target Increase in registered users 58% 50% n/a (nil at n/a (nil at start) start)Website Traffic hits per month 0.77m 0.5m 0.27m 0.25 maveraged over yearIPO's made available 66 50 14 12 2007 2007 2006 2006ADVFN PLC Actual Target Actual Target Growth in sales (%) 35% 30% 35% 30%Staff turnover (%) 18% 20% 25% 20%Average head count 54 55 47 45Advfn registered users 970K 850K 700K 650KGroup registered users 3.3M 2.5M 2M 1.75M Future developments for the business We aim to continue our focus on developing our investments and assisting theirgrowth. ADVFN is already one of the world's leading suppliers of financial dataand it is moving forward at a good pace. ALL IPO has made progress but stillneeds to gain a greater access to the mainstream IPO pool that is availablewithin the City and is exploring other opportunities to allow the business togrow. Principal risks and uncertainties The management of the company and the nature of the company's strategy aresubject to a number of risks. The directors have set out below the principalrisks facing the business. The directors are of the opinion that a thorough riskmanagement process is adopted which involves the formal review of all the risksidentified below. Where possible, processes are in place to monitor and mitigatesuch risks. Economic downturn The success of the world's stock markets could affect the business given thesector both our main investments operate in. Many things around the world canaffect a stock market from war to human error. This can also have a knock oneffect to consumer spending power, although in the past when we have seen amarket downturn this has not impacted on usage of ADVFN, with customersgenerally wanting to know what is happening in the markets; be it good or bad.In response to this potential risk, senior management aim to keep abreast ofeconomic conditions around the world; not only should senior management be awareof it, likewise so should our customers and members. In cases of severe economicdownturn, marketing and pricing strategies are modified to reflect the newmarket conditions. High proportion of fixed overheads and variable revenues A large proportion of the company's overheads are reasonably fixed. There is therisk that any significant changes in revenue may lead to the inability to coversuch costs. Management closely monitor fixed overheads against budget on amonthly basis and cost saving exercises would be implemented should there be ananticipated decline in revenues. Finally, I would just like to thank our shareholders for their continued supportand trust that their belief in the company will be proved right in the not toodistant future. Michael HodgesChairman2nd November 2007 On-line PLCProfit and Loss Accountfor the year ended 30 June 2007 Notes 2007 2006 £'000 £'000 Turnover 54 36 Administrative expensesEquity settled share based payment charge (11) -Other administrative expenses (50) (54)Total administrative expenses (61) (54) Operating loss (7) (18) Profit on sale of investments 1 -Amount written off on investments (273) (85) Loss on ordinary activities before (279) (103)taxation Tax on loss on ordinary activities - - Loss on ordinary activities after (279) (103)taxation Basic and diluted loss per ordinary share from total and continuing operations 2 (3.6p) (1.3p) All operations are continuing. On-line PLCBalance Sheetat 30 June 2007 2007 2006 Notes £'000 £'000 Fixed assetsInvestments 1,015 1,288 Current assetsDebtors 7 56Investments 900 794Cash at bank and in hand 46 27 953 877Creditors: amounts falling due within (88) (82)one year Net current assets 865 795 Total assets less current liabilities 1,880 2,083 Capital and reservesCalled up share capital 3,242 3,242Share premium account 2,205 2,205Option valuation reserve 11 -Profit and loss account (3,578) (3,364)Shareholders' funds 3 1,880 2,083 The financial statements were approved by the Board of Directors on 2nd November 2007. On-line PLCCash Flow Statementfor the year ended 30 June 2007 2007 2006 Notes £'000 £'000 Net cash inflow / (outflow) from operating 4 13 (4)activities Returns on investment and servicing offinanceInterest paid - - Capital expenditure and financial investmentPurchase of investments - (49)Proceeds of disposal of investments 10 -Loans to other entities (4) -Loans repaid to other entities - 32 6 (17) Net cash inflow before financing 19 (21) FinancingIssue of ordinary share capital - -Net cash inflow from financing - - Increase / (decrease) in cash 5,6 19 (21) Statement of Total Recognised Gains and Lossesfor the year ended 30 June 2007 2007 2006 £'000 £'000 Loss for the financial year (279) (103)Unrealised gain / (loss) on current asset 65 (209)investmentsTotal recognised gains and losses for the year (214) (312) On-line PLC Notes for the year ended 30 June 2007 1. General The financial information herein does not constitute statutory accounts asdefined in section 240 of the Companies Act 1985. The financial information hasbeen extracted from the Company's 2007 statutory financial statements upon whichthe auditors reported on 2 November 2007. Their opinion does not include anystatement under section 237 of the Companies Act 1985. The financial statements have been prepared in accordance with applicable UnitedKingdom Accounting Standards and under the historical cost convention. Theprincipal accounting policies have remained unchanged since the previous yearexcept for the adoption of FRS 20 "Share based payments". The Company has adopted FRS20 with effect from 1 July 2006. FRS20 requires therecognition of a charge to the profit and loss account for all applicable sharebased payments, including share options. The Company has equity-settled sharebased payments but no cash-settled share based payments. All share basedpayments awards granted after 7 November 2002 which had not vested prior to 1July 2006 are recognised in the financial statements at their fair value at thedate of grant. As vesting periods and non-market based vesting conditions apply, the expense isallocated over the vesting period, based on the best available estimate of shareoptions expected to vest. Estimates are revised subsequently if there is anyindication that the number of share options expected to vest differs fromprevious estimates. Any cumulative adjustment prior to vesting is recognised inthe current period. All equity-settled share based payments are ultimatelyrecognised as an expense in the profit and loss account with a correspondingcredit to the option valuation reserve. As the options in issue at 1 July 2006 had all vested, no prior year restatementof the financial statements for the year ended 30 June 2006 is required. TheFRS20 charge for the year amounted to £11,000. Copies of the annual report are being posted to shareholders and copies will beavailable from the company's registered office at Suite 27, Essex TechnologyCentre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA. 2. Loss per ordinary share 2007 2006 Number of Loss Number of Loss Loss shares per share Loss shares per share £'000 '000 p £'000 '000 p Loss for the year (279) (103)Weighted average number of shares 7,662 7,662 Loss per share (3.6p) (1.3p) The share options are anti-dilutive for both years due to the losses incurred. 3. Reconciliation of movements in shareholders' funds 2007 2006 £'000 £'000 Loss for the financial year (279) (103)Recognition of equity settled share based payments in theyear (FRS20) 11 -Unrealised gain / (loss) on investments 65 (209)Net decrease in shareholders' funds in the year (203) (312)Shareholders' funds at 1 July 2006 2,083 2,395Shareholders' funds at 30 June 2007 1,880 2,083 4. Reconciliation of operating loss to net cash inflow/(outflow) from operating activities 2007 2006 £'000 £'000 Operating loss (7) (18)Recognition of equity settled share based paymentsin the year (FRS20) 11 -Decrease in debtors 3 7Increase in creditors 6 7Net cash inflow / (outflow) from operating 13 (4)activities 5. Reconciliation of net cash flow to movement in net funds 2007 2006 £'000 £'000 Increase / (decrease) in cash for the year 19 (21)Net funds at 1 July 2006 27 48Net funds at 30 June 2007 46 27 6. Analysis of movements in net funds At Cash flow At 1 July 30 June 2007 2006 £'000 £'000 £'000 Cash in hand and at bank 27 19 46 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
OBC.L