6 December 2022
For immediate release
ADVFN PLC
("ADVFN" or the "Company")
Audited Results for the year ended 30 June 2022
Annual General Meeting
The Board of ADVFN announces the audited annual results for the year ended 30 June 2022. The Annual Report and Accounts will shortly be sent to shareholders and will be available on the Company's website, http://www.advfnplc.com. A copy of this announcement is also available on the Company's website, http://www.advfnplc.com.
The Annual General Meeting is due to be held at 10.00am on 29 December 2022 at RPC, Tower Bridge House, St Katherine's Way, London E1W 1AA. Notice of the Annual General Meeting is included in the Company's Annual Report.
For further information please contact:
| ADVFN PLC Jonathan Mullins | +44 (0) 203 8794 460
|
| Beaumont Cornish Limited (Nominated Adviser) | |
| Roland Cornish/Michael Cornish | +44 (0) 207 628 3396 |
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. The person who arranged for the release of this announcement on behalf of the Company was Jon Mullins, Director.
Chairman's Statement
I'm delighted to have joined the Board as Non-Executive Chairman of ADVFN, where the opportunities for the future appear to be manifest. The appointment of Amit Tauman as CEO on 25th November 2022 provides the company with a talented leader who the Board is confident is ideally placed to achieve the necessary objectives as he describes in his report below. While the company has maintained an average revenue of circa £8 million per year over the last ten years, there are several areas of the company that need to be strengthened and this is uppermost in the Board's thinking. By working closely with our new CEO we believe that this will be achieved.
Lord Gold
Non-executive Chairman
5 December 2022
Chief Executive's Statement
I am proud to serve on the Board of ADVFN and to have been appointed as CEO. As the Chairman reports there are considerable opportunities for ADVFN and to achieve them I set out three long-term priorities on which everyone in the company is now focused: Innovation, User Experience and management decisions driven by enterprise data.
I believe these priorities enable us not only to leverage our key strengths, but they also allow us to capitalise on market trends and to innovate and grow. I'm excited about the opportunities and confident about the future. I want to take this opportunity to thank all ADVFN employees for the warm welcome and motivation towards this new journey together.
Amit Tauman
CEO
5 December 2022
Strategic Report
Financial Overview
The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards.
The loss for the financial year after tax amounted to £1,368,000 (2021: a profit of £1,618,000). The Directors are not proposing payment of a dividend.
As mentioned in the trading and corporate update published on 6th June 2022, there were several extraordinary, non-recurring items incurred this year which were responsible for the majority of the loss. Prior to the appointment of the new directors, Mr. Chambers was awarded a settlement of £ 830,639 when he resigned as chief executive shortly before the requisition to appoint the new directors. Subsequently, significant legal costs of £106,200 (before VAT) were incurred in reaching settlements with two additional outgoing directors and amending the terms of employment of then existing directors.
ADVFN 2021-2022 financial highlights:
• Revenue was £7.8 million compared to £9.1 million in the prior year period
• Net loss was £1.8 million compared to net income of £1.6 million in the prior year period
• Cash and cash equivalents: £0.9million compared to £1.9m in the prior year.
Business Review
Despite a challenging economic environment, in the first half of the financial year the company maintained operational profit which is heartening.
In the second half we encountered a number of challenges, including worsening market conditions, changes to Google search algorithms and changes in senior management and Board composition. This led to a decline in revenue from sales and one-off settlement costs. These challenges have continued into the first quarter of the financial year ending June 2023 with operational losses similar to those of the last quarter of the prior financial year.
I'm pleased to report that changes in senior management and Board composition have created an opportunity to revisit and challenge many of the operations, the organisational structure, and offerings. We have focused our efforts in defining our long-term strategy and detailing our growth engines and roadmap. In addition, we have put great emphasis on empowering and engaging our employees around the world with our mission and vision. We have focused on our users' experience and are creating a data driven infrastructure and culture to enhance and support it. We are excited, committed, and confident that this new and dynamic mindset will drive prospects and growth.
Looking ahead to the next calendar year, we are putting a firm emphasis on our user interface and user experience including the introduction of exciting new real time tools and content. We aim to build a strong and sustainable market-leading financial community. In addition to continued optimisation of our business, with focus on execution and enhancement of our core offering, we are taking actions to maintain margin and strong cash flow generation. We are constantly reviewing our cost structure and have already adjusted staffing levels for less profitable parts of the business. We also aim to optimise our exchange and license fee costs. We adjusted subscription pricing and will be optimising the subscription funnel further in the new year. We have a number of exciting new products in development that will be released in 2023 that will revitalise our subscription offering. We will continue to look for efficiency opportunities across our organisation and will capitalise on investments that position us for long-term sustainable growth.
Operating Costs
We continue to monitor the operating costs of the Group and there is currently no plan for further significant change to our virtual organisation.
Research and Development ("R&D")
As a media company with highly technical products Research and Development is very important to us. Innovation is necessary to drive growth.
Our R & D investment this year has been £74,000 (2021: £294,000) and all this investment has been capitalised.
This represents a reduced figure primarily due to key personnel being involved in the series of corporate actions during the year. Along with new KPIs, the board is in the process of developing a new research and development plan.
Environmental policy
As always, we continue to look for ways to develop in an environmental way. It remains our objective to improve our performance in this area.
Summary of key performance indicators
Our key indicators have not yet changed, as they are an important part of the business. The current Board is in the process of reviewing KPIs and targets, with changes expected for the financial year 2022/2023.
The Directors monitor the Key Performance Indicators on an ongoing basis. The chart below shows the level of performance achieved in the financial year. The individual items are as follows:
| | 2022 | 2022 | 2021 | 2021 |
| | Actual | Target | Actual | Target |
| Turnover | £7.8M | £8.70M | £9.06M | £8.70M |
| Average head count | 37 | 40 | 38 | 42 |
| ADVFN registered users | 5.16M | 5.20M | 5.10M | 5.00M |
Market conditions have led to a lower than budgeted turnover for both subscriptions and advertising and registered user count. We have adjusted staff levels in line with business performance.
Turnover - An important indicator that gives an overall view of our place in the market.
Head count - represents a very significant part of the costs of the Group and is fixed as an overhead. Talented people are a vital part of the business.
Registered users - give us an indication of our audience pool and the potential available for marketing our service.
COVID-19
COVID-19 continues to have little measurable impact on the company, in part due to the international and distributed nature of the Group. In the UK the Company continues to employ remote working.
Principal risks and uncertainties
The principal risks and uncertainties are summarised in the Corporate Governance Report.
Consideration of the principal risks associated with financial instruments is contained in note 23.
People
I would like to thank the whole team at ADVFN who worked hard during a tumultuous time in the markets.
Directors' statement of responsibilities under section 172 Companies Act 2006
The Directors have considered the requirements of Section 172(1) of the Companies Act 2006 to prepare a statement explaining how the Directors have considered the wider stakeholder needs when performing their duties under Section 172 of the Companies Act 2006.
The Directors consider the stakeholders to be the people who work for us, work with us, invest with us, own us, regulate us and live in the societies we serve. The Directors recognise that building strong relationships with our stakeholders will help deliver the Group's strategy in line with the long-term values. The Directors are committed to effective engagement with all of our stakeholders and seek to understand the interests and views of the Group's stakeholders by engaging with them directly as appropriate.
Depending on the nature of the issue in question, the relevance of each stakeholder group may differ and, as such, as part of the Group's engagement with stakeholders, the Directors seek to understand the relative interests and priorities of each group and to have regard to these, as appropriate, in their decision making. The Directors acknowledge, however, that not every decision the Board makes will necessarily result in a positive outcome for all stakeholders. However, the Directors do challenge management to ensure all stakeholder interests are considered in the day-to-day management and operations of the Group.
.
As part of their deliberations and decision making process, the Directors take into account the following:
• the likely consequences of any decisions in the long term;
• interests of the Group's employees;
• need to foster the Group's business relationships with suppliers, customers and others;
• impact of the Group's operations on the community and environment;
• desirability of the Group maintaining a reputation for high standards of business conduct; and
• need to act fairly as between members of the Group.
As a result of these activities, the Directors believe that they have demonstrated compliance with their obligations under s.172 of the Companies Act 2006
Business
The Directors' aim for the Group is to be and remain a contributing and good "Corporate Citizen".
Our business does not have a high carbon footprint and we consider it to be a sustainable business. We try to ensure that our planet's precious resources are used appropriately for the benefit of current and future generations. The Board considers that the business and strategic decisions which it takes now, in furtherance of the Group's business objectives, do not damage the global environment.
Employees
The Group has a small number of employees but those it has are situated and are deployed on the Group's business around the World. We ensure that we comply with all local labour laws and apply what the Directors believe are appropriate standards and systems to monitor and ensure the welfare of those employees.
Stakeholder engagement
The Group is entirely owned by the shareholders of ADVFN Plc and the shares of the Group are traded on AIM. The stakeholders of the Group consist predominantly of the shareholders, employees, advisers and suppliers. The Directors recognise the importance of these relationships and take active steps to develop and strengthen them through dialogue and engagement. These relationships are regularly monitored at Board level.
Governance
Each Board meeting addresses compliance by the Group with its corporate governance codes and reinforces the Board's requirement that its business be conducted with integrity and with due regard for ethical standards.
ON BEHALF OF THE BOARD
Amit Tauman
CEO
5 December 2022
| Consolidated income statement |
| | |
|
|
| 30 June | 30 June |
| | | 2022 | 2021 |
| | Notes | £'000 | £'000 |
| | |
|
|
| | |
| |
| Revenue | 3 | 7,848 | 9,059 |
| Cost of sales | | (374) | (452) |
| | | | |
| Gross profit | | 7,474 | 8,607 |
| | | | |
| Share based payment | 21 | - | (43) |
| Amortisation of intangible assets | 12 | (256) | (251) |
| Administrative expenses | | (7,176) | (6,849) |
| Administrative expenses - non-recurring items | 6 | (1,420) | - |
| | | | |
| Total administrative expenses | | (8,852) | (7,143) |
| Government grant | | - | 162 |
| | | | |
| Operating (loss)/profit | 4 | (1,378) | 1,626 |
| | | | |
| Finance expense | 7 | (14) | (22) |
| Other income | | - | 4 |
| | | | |
| (Loss)/profit before tax | | (1,392) | 1,608 |
| Taxation | 8 | 24 | 10 |
| | | | |
| Total (loss)/profit for the period attributable to shareholders of the parent | |
(1,368) |
1,618 |
| | | | |
| (Loss)/profit per share | | | |
| Basic | 9 | (5.22p) | 6.28p |
| Diluted | 9 | (5.22p) | 5.97p |
| | | | |
| |
|
| |
| Consolidated statement of comprehensive income |
| | |
|
|
| 30 June | 30 June |
| | | 2022 | 2021 |
| | | £'000 | £'000 |
| | |
|
|
| | |
| |
| (Loss)/profit for the year |
| (1,368) | 1,618 |
| |
| | |
| Other comprehensive income: |
| | |
| Items that will be reclassified subsequently to profit or loss: |
| | |
| |
| | |
| Exchange differences on translation of foreign operations |
| 73 | (95) |
| |
| | |
| Total other comprehensive income |
| 73 | (95) |
| |
| | |
| Total comprehensive income for the year attributable to shareholders of the parent |
|
(1,295) |
1,523 |
| |
| | |
The accompanying accounting policies and notes form an integral part of these financial statements.
| Consolidated balance sheet |
| | |
|
|
| 30 June | 30 June |
|
|
| 2022 | 2021 |
|
| Notes | £'000 | £'000 |
|
| |
| |
| Assets |
|
|
|
| Non-current assets |
|
| |
| Property, plant and equipment | 10 | 98 | 239 |
| Goodwill | 11 | 988 | 870 |
| Intangible assets | 12 | 1,124 | 1,562 |
| Trade and other receivables | 15 | 26 | 110 |
|
| | | |
|
| | 2,236 | 2,781 |
|
| | | |
| Current assets | | | |
| Trade and other receivables | 15 | 460 | 546 |
| Cash and cash equivalents | | 915 | 1,939 |
|
| | | |
|
| | 1,375 | 2,485 |
|
| | | |
| Total assets | | 3,611 | 5,266 |
|
| | | |
| Equity and liabilities | | | |
| Equity | | | |
| Issued capital | 20 | 53 | 52 |
| Share premium | | 305 | 223 |
| Share based payment reserve | | 341 | 343 |
| Foreign exchange reserve | | 283 | 210 |
| Retained earnings | | 340 | 2,295 |
|
| | | |
|
| | 1,322 | 3,123 |
|
| | | |
| Non-current liabilities | | | |
| Borrowing - bank loans | 17 | 41 | 54 |
| Borrowing - lease liabilities | 17 | - | 87 |
| | | | |
|
| | 41 | 141 |
|
| | | |
| Current liabilities | | | |
| Trade and other payables | 19 | 2,148 | 1,886 |
| Borrowing - bank loans | 17 | 13 | 13 |
| Borrowing - lease liabilities | 17 | 87 | 103 |
|
| | | |
|
| | 2,248 | 2,002 |
|
| | | |
| Total liabilities | | 2,289 | 2,143 |
|
| | | |
| Total equity and liabilities | | 3,611 | 5,266 |
|
|
| | |
The financial statements on pages 22 to 63 were authorised for issue by the Board of Directors on 3 December 2022 and were signed on its behalf by:
Amit Tauman
CEO
Company number: 02374988
The accompanying accounting policies and notes form an integral part of these financial statements.
| Company balance sheet | | At 30 June | At 30 June |
|
| Note | 2022 | 2021 |
| | | £'000 | £'000 |
| | | | |
| Assets | |
| |
| Non-current assets | |
| |
| Property, plant and equipment | 10 | 24 | 64 |
| Intangible assets | 12 | 234 | 382 |
| Trade and other receivables | 15 | 24 | 108 |
| Investments | 13 | 1,001 | 2,276 |
| | | | |
| | | 1,283 | 2,830 |
|
| | | |
| Current assets | | | |
| Trade and other receivables | 15 | 786 | 709 |
| Cash and cash equivalents | | 529 | 1,650 |
| | | | |
| | | 1,315 | 2,359 |
| | | | |
| Total assets | | 2,598 | 5,189 |
| | | | |
| Equity and liabilities | | | |
| Equity | | | |
| Called up share capital | 20 | 53 | 52 |
| Share premium account | | 305 | 223 |
| Share based payment reserve | | 341 | 343 |
| Retained earnings | | (507) | 2,311 |
| | | | |
| | | 192 | 2,929 |
| | | | |
| Non-current liabilities | | | |
| Borrowings - bank loans | 17 | 41 | 54 |
| Deferred tax | | 104 | 104 |
| | | | |
| | | 145 | 158 |
| | | | |
| Current liabilities | | | |
| Trade and other payables | 19 | 2,248 | 2,089 |
| Borrowings - bank loans | 17 | 13 | 13 |
| | | | |
| | | 2,261 | 2,102 |
| | | | |
| Total liabilities | | 2,406 | 2,260 |
| | | | |
| Total equity and liabilities | | 2,598 | 5,189 |
| | | | |
| | | | |
The financial statements on pages 22 to 63 were authorised for issue by the Board of Directors on 3 December 2022 and were signed on its behalf:
Amit Tauman
CEO
Company number: 02374988
Company statement of comprehensive income
As permitted by Section 408 of the Companies Act 2006, the income statement and statement of comprehensive income of the parent company is not presented as part of these financial statements. The parent company's result after taxation for the financial year was a loss of £2,231,000 (2021: profit of £1,126,000).
The accompanying accounting policies and notes on pages 29 to 63 form an integral part of these financial statements.
Consolidated statement of changes in equity
|
| Share capital | Share premium | Share based payment reserve | Foreign exchange reserve | Retained earnings
| Total equity
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
|
| | | | | | |
| At 1 July 2020 | 51 | 167 | 367 | 305 | 610 | 1,500 |
|
| | | | | | |
| Transactions with equity shareholders: | | | | | | |
| Share issues | 1 | 56 | - | - | - | 57 |
| Transfer on exercise | - | - | (67) | - | 67 | - |
|
| | | | | | |
|
| 1 | 56 | (67) | - | 67 | 57 |
|
| | | | | | |
| Reprice share options | - | - | 43 | - | - | 43 |
|
| | | | | | |
| Profit for the year after tax | - | - | - | - | 1,618 | 1,618 |
| | | | | | | |
| Other comprehensive income | | | | | | |
| Exchange differences on translation of foreign operations |
- |
- |
- |
(95) |
- |
(95) |
|
| | | | | | |
| Total other comprehensive income | - | - | - | (95) | - | (95) |
|
| | | | | | |
| Total comprehensive income | - | - | - | (95) | 1,618 | 1,523 |
|
| | | | | | |
| At 30 June 2021 | 52 | 223 | 343 | 210 | 2,295 | 3,123 |
|
| | | | | | |
| Transactions with equity shareholders: | | | | | | |
| Share issues | 1 | 82 | | | | 83 |
| Transfer on exercise | | | (2) | | 2 | - |
| | | | | | | |
| | 1 | 82 | (2) | - | 2 | 83 |
| Distributions to owners | | | | | | |
| Dividends | - | - | - | - | (589) | (589) |
| | | | | | | |
|
| - | - | - | - | (589) | (589) |
| | | | | | | |
| Loss for the year after tax | - | - | - | - | (1,368) | (1,368) |
|
| | | | | | |
| Other comprehensive income | | | | | | |
| Exchange differences on translation of foreign operations |
- |
- |
- |
73 |
- |
73 |
|
| | | | | | |
| Total other comprehensive income | - | - | - | 73 | - | 73 |
|
| | | | | | |
| Total comprehensive income | - | - | - | 73 | (1,957) | (1,884) |
|
| | | | | | |
| At 30 June 2022 | 53 | 305 | 341 | 283 | 340 | 1,322 |
|
| | | | | | |
The accompanying accounting policies and notes form an integral part of these financial statements.
Company statement of changes in equity
|
| Share capital | Share premium | Share based payment reserve | Retained earnings
| Total equity
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | |
| At 1 July 2020 | 51 | 167 | 367 | 1,118 | 1,703 |
|
| | | | | |
| Transactions with equity shareholders: | | | | | |
| Share issues | 1 | 56 | - | - | 57 |
| Transfer on exercise | - | - | (67) | 67 | - |
|
| | | | | |
|
| 1 | 56 | (67) | 67 | 57 |
|
| | | | | |
| Reprice share options | - | - | 43 | - | 43 |
|
| | | | | |
| Profit for the year after tax | - | - | - | 1,126 | 1,126 |
|
| | | | | |
| Total comprehensive income for the year | - | - | - | 1,126 | 1,126 |
|
| | | | | |
| At 30 June 2021 | 52 | 223 | 343 | 2,311 | 2,929 |
|
| | | | | |
|
| | | | | |
| Transactions with equity shareholders: | | | | | |
| Share issues | 1 | 82 | | | 83 |
| Transfer on exercise | | | (2) | 2 | - |
|
| | | | | |
|
| 1 | 82 | (2) | 2 | 83 |
|
| | | | | |
| Distributions to owners | | | | | |
| Dividends | - | - | - | (589) | (589) |
|
| | | | | |
|
| - | - | - | (589) | (589) |
|
| | | | | |
| Loss for the year after tax | - | - | - | (2,231) | (2,231) |
| | | | | | |
| Total comprehensive income for the year | - | - | - | (2,637) | (2,637) |
|
| | | | | |
| At 30 June 2022 | 53 | 305 | 341 | (507) | 192 |
|
| | | | | |
|
| | | | | |
The accompanying accounting policies and notes form an integral part of these financial statements.
| Consolidated cash flow statement |
| | |
|
|
| 12 months to 30 June | 12 months to 30 June |
| | | 2022 | 2021 |
| | Notes | £'000 | £'000 |
|
|
|
| |
| Cash flows from operating activities |
|
| |
| (Loss)/Profit for the year |
| (1,368) | 1,618 |
| |
| | |
| Taxation |
| - | (10) |
| Net finance income in the income statement | 7 | 14 | 22 |
| Depreciation of property, plant & equipment | 10 | 181 | 167 |
| Amortisation of intangible assets | 12 | 256 | 251 |
| Forgiveness of US loan | | - | (174) |
| Write off of intangible assets | | 296 | - |
| Share based payments - options/warrants | 21 | - | 43 |
| Decrease/(increase) in trade and other receivables | | 170 | (72) |
| Increase/(decrease) in trade and other payables | | 262
| (392) |
| | | | |
| Net cash generated by continuing operations | | (189) | 1,453 |
| | | | |
| Income tax receivable | | - | - |
| | | | |
| Net cash generated by operating activities | | (189) | 1,453 |
| | | | |
| Cash flows from financing activities | | | |
| Issue of share capital | | 83 | 57 |
| Dividend payments | | (589) | - |
| Drawdown loans | | - | 17 |
| Repayment of loans | | (13) | - |
| Repay lease liability | | (103) | (92) |
| Lease interest paid | | (10) | (19) |
| Other interest paid | | (4) | (3) |
| | | | |
| Net cash generated by financing activities | | (636) | (40) |
| | | | |
| Cash flows from investing activities | | | |
| Payments for property, plant and equipment | 10 | (39) | (39) |
| Purchase of intangibles | 12 | (114) | (385) |
| | | | |
| Net cash used by investing activities | | (153) | (424) |
| | | | |
| Net increase in cash and cash equivalents | | (978) | 989 |
| Exchange differences | | (46) | 35 |
| | |
| |
| Net increase in cash and cash equivalents | | (1,024) | 1,024 |
| Cash and cash equivalents at the start of the period | | 1,939 | 915 |
| | | | |
| Cash and cash equivalents at the end of the period | | 915 | 1,939 |
The accompanying accounting policies and notes form an integral part of these financial statements.
| Company cash flow statement |
| | |
|
|
| 12 months to 30 June | 12 months to 30 June |
| | | 2022 | 2021 |
| | Notes | £'000 | £'000 |
|
|
|
| |
| Cash flows from operating activities |
|
| |
| (Loss)/profit for the period |
| (2,231) | 1,126 |
| |
| | |
| Taxation |
| - | 104 |
| Net finance expense in the income statement | | 1 | 3 |
| Depreciation of property, plant & equipment | 10 | 72 | 63 |
| Amortisation of intangibles | 12 | 223 | 234 |
| Impairment of investments | | 1,275 | - |
| Share based payments - options/warrants | 21 | - | 43 |
| (Increase)/decrease in trade and other receivables | | 7 | 247 |
| Decrease/(increase) in trade and other payables | | 159 | (417) |
| | | | |
| Net cash generated by operating activities | | (494) | 1,403 |
| | | | |
| Income tax payable | | - | - |
| | | | |
| Net cash generated by operating activities | | (494) | 1,403 |
| | | | |
| Cash flows from financing activities | | | |
| Issue of share capital | | 83 | 57 |
| Dividend payments | | (589) | - |
| Repayment of loans | | (13) | - |
| Drawdown loans | | - | 17 |
| Interest paid | | (1) | (3) |
| | | | |
| Net cash generated by financing activities | | (520) | 71 |
| | | | |
| Cash flows from investing activities | | | |
| Payments for property, plant and equipment | 10 | (32) | (39) |
| Purchase of intangibles | 12 | (75) | (294) |
| | | | |
| Net cash used by investing activities | | (107) | (333) |
| | | | |
| Net increase/(decrease) in cash and cash equivalents | | (1,121) | 1,141 |
| Cash and cash equivalents at the start of the period | | 1,650 | 509 |
| | | | |
| Cash and cash equivalents at the end of the period | | 529 | 1,650 |
The accompanying accounting policies and notes form an integral part of these financial statements.
Notes to the financial statements
1. General information
The principal activity of ADVFN PLC ("the Company") and its subsidiaries (together "the Group") is the development and provision of financial information, primarily via the internet, research services and the development and exploitation of ancillary internet sites.
The principal trading subsidiaries are All IPO Plc, InvestorsHub.com Inc, N A Data Inc, MJAC InvestorsHub International Conferences Ltd and Cupid Bay Limited.
The Company is a public limited company which is quoted on the AIM of the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is Suite 28, Ongar Business Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.
The registered number of the company is 02374988.
Exemption from audit
For the year ended 30 June 2022 ADVFN Plc has provided a guarantee in respect of all liabilities due by its subsidiary companies Cupid Bay Limited (Company No. 04001650) and MJAC InvestorsHub International Conferences Ltd (Company No. 11000464) thus entitling them to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.
2. Summary of significant accounting policies
Basis of preparation
The consolidated and company financial statements are for the year ended 30 June 2022. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards as at 30 June 2022. The consolidated and company financial statements have been prepared under the historical cost convention and are presented in Sterling rounded to the nearest thousand (£'000) except where indicated otherwise.
The subsidiary companies Cupid Bay Limited and MJAC InvestorsHub International Conferences Ltd are exempt from an audit under s479A of the Companies Act 2006.
Going concern
The financial statements have been prepared on the going concern basis which assumes the Group will continue in existence for the foreseeable future. The Directors are pleased to report that the Group's profit is in line with the expectations announced earlier in the year. The Directors have prepared a detailed forecast of future trading and cash flows for the next three years after the accounts are approved. The forecasts take into potential future growth of the business both in the UK and USA, the development of products that will enhance the growth of the business and the potential areas for additional cost saving if required. The group is also looking at additional fund raising to help with the continued research and development work that is required to enhance the products available to new and existing customers.
Standards and amendments to existing standards adopted in these accounts
IAS 1 Presentation of Financial Statements and IAS 8 Accounting policies, Changes in Accounting Estimates and Errors (Amendment - Definition of Material)
Interest Rate Benchmark Reform - IBOR 'phase 2' (Amendments to IFRS 7)
IFRS 3 Business Combinations (Amendment - Definition of Business)
COVID-19 Related Rent Concessions (Amendments to IFRS 16)
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Company in the 30 June 2022 financial statements
Revised Conceptual Framework for Financial Reporting
Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
Property Plant and Equipment: Proceeds before intended use (Amendments to IAS 16)
Annual improvements to IFRS Standards 2018-2020
References to Conceptual Framework (Amendments to IFRS 3)
Classification of liabilities as Current or Non-current (Amendments to IAS 1)
IFRS 17 - Insurance Contracts
Amendments to IFRS 17 - Insurance Contracts; and Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4 Insurance Contracts)
Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements)
Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes)
The Directors continue to monitor developments in the accounting standards they see as relevant but do not believe that these changes will significantly impact the Group.
Consolidation
The Group's financial statements consolidate those of the parent company and all of its subsidiaries drawn up to 30 June 2022. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated on the date control ceases.
Inter-company transactions, balances and unrealised gains and losses (where they do not provide evidence of impairment of the asset transferred) on transactions between Group companies are eliminated.
Business combinations
The Group uses the acquisition method of accounting for the acquisition of a subsidiary. The consideration transferred is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed in the period.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date irrespective of the extent of any non-controlling interest.
Goodwill is recognised at the acquisition date measured as the excess of the aggregate of:
· The fair value of the consideration transferred
· The fair value or, alternatively, the share of net assets of the non-controlling interest in the acquiree
· In a combination achieved in stages, the fair value of the acquirer's previously held equity interest in the acquiree over the net of the acquisition date fair value of the identifiable assets acquired and the liabilities assumed.
Where the goodwill calculation results in a negative amount (bargain purchase) this amount is taken to the income statement in the period in which it is derived.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Foreign currency translation
a) Functional and presentational currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The Company's functional currency and the Group's presentational currency is Sterling.
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
c) Group companies
The results and financial position of all Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
· Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet.
· Income and expenses for each income statement are translated at the rate of exchange at the transaction date. Where this is not possible, the average rate for the period is used but only if there is no significant fluctuation in the rate and;
· On consolidation, exchange differences arising from the translation of the net investment in foreign entities are recognised in other comprehensive income and accumulated in a separate component of equity. Post transition exchange differences are recycled to profit or loss as a reclassification adjustment upon disposal of the foreign operation.
Income and expense recognition
Revenue is the fair value of the total amount receivable by the Group for supplies of services. VAT or similar local taxes and trade discounts are excluded.
The revenues of the group are now accounted for under IFRS 15 'Revenue from contracts with customers' and reported as follows:
· Subscriptions - both monthly and annual subscriptions are offered and the price for the subscription is quoted on the website. Revenue for annual subscriptions is deferred on a time basis with equal monthly transfers to the income statement to allocate the recognition across the period of service provision. Payment is received in advance of subscription fulfilment.
· Advertising - fees for advertising are recognised when the service obligations are fulfilled and are subject to agreement by a written contract which includes pricing. Where there are multiple obligations amounts specific to that obligation are transferred to the income statement. Payment terms are 30 days following invoicing.
Interest income and expenditure are reported on an accruals basis. Operating expenses are recognised in the income statement upon utilisation of the service or at the date of their origin.
Employee benefits
The cost of pensions in respect of the Group's defined contribution scheme is charged to profit or loss in the period in which the related employee services were provided.
Government grants
The Directors have taken advantage of the short-term finance offered under the Business Bounce Back loan scheme and its US equivalent. As part of the UK loans the first 12 months of the interest charges have been reimbursed by the UK Government. This has been treated as a government grant where the receipt has been offset against the expense in the same period and the remainder deferred if already received. The US loan was drawn down on the basis that the loan would be over a period of 2 years, however, this loan has now been 'forgiven' by the US Government and has been treated as a grant and utilised immediately.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Intangible assets
- Licences
Licences are recognised at cost less any subsequent impairment and amortisation charges, they are amortised over a five-year period on a straight-line basis.
- Goodwill
Goodwill is capitalised as an intangible asset and allocated to cash generating units (with separately identifiable cash flows) and is subject to impairment testing on an annual basis or more frequently if circumstances indicate that the asset may have been impaired.
- Internally generated intangible assets
An internally generated intangible asset (website and mobile application) arising from development (or the development phase) of an internal project is recognised if, and only if, all of the following have been demonstrated:
· the technical feasibility of completing the intangible asset so that it will be available for use or sale
· the intention to complete the intangible asset and use or sell it
· the ability to use or sell the intangible asset
· how the intangible asset will generate probable future economic benefits
· the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset
· the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised, development expenditure is charged to profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses. Internally generated intangibles not yet in use are subject to annual impairment testing.
Internally generated intangible assets are amortised over three to five years.
Research expenditure is recognised as an expense in the period in which it is incurred.
- Intangible assets acquired as part of a business combination
Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset. The cost of such intangible assets is their fair value at the acquisition date and comprises brand names, subscriber lists, certain website development costs and licenses. All intangible assets acquired through business combination are amortised over their useful lives estimated at between 5 and 10 years.
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses.
- Intangible assets purchased
Intangible assets are purchased when the opportunity arises and capitalised at cost (fair value). Purchased intangible assets are amortised over their useful lives estimated at between 5 and 10 years. Subsequent to initial recognition, purchased intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses.
Property, plant and equipment
Property, plant and equipment are recorded at cost net of accumulated depreciation and any provision for impairment. Depreciation is provided using the straight-line method to write off the cost of the asset less any residual value over its useful economic life. The residual values of assets are reviewed annually and revised where necessary. Assets' useful economic lives are as follows:
Leasehold improvements The shorter of the useful life of the asset or the term of the lease (1 to 3 years)
Computer equipment 33% per annum over 3 years
Office equipment 20% per annum over 5 years
Right of use lease assets The earlier of the end of the useful life of the asset or the end of the lease term
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Intangible assets (continued)
Impairment
For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. As a result some assets are tested individually for impairment and some are tested at cash-generating unit level.
Goodwill, other individual assets or cash-generating units that include goodwill and those intangible assets not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the carrying amount exceeds the recoverable amount of the asset or cash-generating unit. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. The cashflow evaluations are a result of the Director's estimation of future sales and expenses based on their past experience and the current market activity within the business. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
Financial assets
On initial recognition, the Group classifies its financial assets as either financial assets at fair value through profit or loss, at amortised cost or fair value through comprehensive income, as appropriate. The classification depends on the purpose for which the financial assets were acquired. At the reporting year-end the financial assets of the Group were all classified as loans or receivables.
Trade receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers but also incorporate other types of contractual monetary assets.
They are initially recognised at fair value and measured subsequent to initial recognition at amortised cost using the effective interest method, less any impairment loss.
The Group's financial assets comprise trade receivables, other receivables (excluding prepayments) and cash and cash equivalents.
Trade and other receivables - impairment
The group applies an expected credit loss model to calculate the impairment losses on its trade receivables. The group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. Trade receivables at the balance sheet date have been put into groups based on days past the due date for payment and an expected loss percentage has been applied to each group to generate the expected credit loss provision for each group and a total expected credit loss provision has thus been calculated.
Financial liabilities
The Group's financial liabilities include trade and other payables and borrowings which include lease liabilities.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest related charges are recognised as an expense in the income statement.
Trade payables are recognised initially at their fair value, net of transaction costs and subsequently measured at amortised costs less settlement payments.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Leases
The Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to the ownership of the underlying asset to the Group.
The Group is a lessee of office premises and, under IFRS 16, where the Group had recognised a lease as an operating lease and payments made under the lease were recognised in profit or loss on a straight-line basis over the term of the lease, the Group now recognises a right-of-use asset and a lease liability for most leases i.e. these leases are on-balance sheet.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentive received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments
- variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date
- amounts expected to be payable under a residual value guarantee, and
- the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments in an optional renewal period if the group is reasonably certain to exercise such an option to extend and penalties for early termination of a lease unless the group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the group's estimate of the amount expected to be payable under a residual value guarantee or if the group changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The group presents right-of-use assets in 'property, plant and equipment' and lease liabilities in 'loans and borrowings' in the balance sheet.
Income taxes
Current income tax assets and liabilities comprise those obligations to fiscal authorities in the countries in which the Group carries out its operations. They are calculated according to the tax rates and tax laws applicable to the fiscal period and the country to which they relate. All changes to current tax liabilities are recognised as a component of tax expense in the income statement unless the tax relates to an item taken directly to equity in which case the tax is also taken directly to equity. Tax relating to items recognised in other comprehensive income is recognised in other comprehensive income.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are always provided for in full. Deferred tax assets such as those resulting from assessing deferred tax on the expense of share-based payments, are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Provisions, contingent liabilities and contingent assets
Provisions are recognised when the present obligations arising from legal or constructive commitment resulting from past events, will probably lead to an outflow of economic resources from the Group which can be estimated reliably.
Provisions are measured at the present value of the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the balance sheet date.
All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Share based employee compensation
The Group operates equity settled share-based compensation plans for remuneration of its employees.
All employee services received in exchange for the grant of any share-based compensation are measured at their fair values. These are indirectly determined by reference to the share options awarded. Their value is appraised at the grant date and excludes the impact of any non-market vesting conditions (e.g. profitability or sales growth targets).
All share-based compensation is ultimately recognised as an expense in the income statement with a corresponding credit to the share-based payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. No adjustment to expense recognised in prior periods is made if fewer share options ultimately are exercised than originally estimated.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value of the shares issued are reallocated to share capital with any excess being recorded as additional share premium.
Where modifications are made to the vesting or lapse dates of options the excess of the fair value of the revised options over the fair value of the original options at the modification date is expensed over the remaining vesting period.
Dividends
During the year, dividends totalling £589,000 were paid. The board is not recommending the payment of any further dividends in the current financial year.
Final equity dividends to the shareholders of ADVFN plc are recognised in the period that they are approved by shareholders. Interim equity dividends are recognised in the period that they are paid.
Dividends receivables are recognised when the Company's right to receive payment is established
Equity
Issued capital
Ordinary shares are classified as equity. The nominal value of shares is included in issued capital.
Share premium
The share premium account represents the excess over nominal value of the fair value of consideration received for equity shares, net of the expenses of the share issue.
Share based payment reserve
The share-based payment reserve represents equity settled share-based employee remuneration until such share options are exercised.
Foreign exchange reserve
The foreign exchange reserve represents foreign exchange gains and losses arising on translation of investments in overseas subsidiaries into the consolidated financial statements.
Retained earnings
The retained earnings include all current and prior period results for the Group and the post-acquisition results of the Group's subsidiaries as determined by the income statement.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Use of key accounting estimates and judgements
Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ from the amounts included in the financial statements. Information about such judgements and estimates is contained in the accounting policies and/or the notes to the financial statements and the key areas are summarised below:
Judgements in applying accounting policies
a) Capitalisation of development costs in accordance with IAS 38 requires analysis of the technical feasibility and commercial viability of the project in the future. This in turn requires a long-term judgement to be made about the development of the industry in which the development will be marketed. Where the directors consider that sufficient evidence exists surrounding the technical feasibility and commercial viability of the project, which indicate that the costs incurred will be recovered they are capitalised within intangible fixed assets. The amount of the capitalisation is based on estimates to judge the percentage of the time relevant staff spend on projects as specific timesheets are not maintained. Where insufficient evidence exists, the costs are expensed to the income statement.
b) The directors have used their judgement to decide whether the Group should be treated as a going concern and continue in existence for the foreseeable future. Having considered the latest Group forecasts, which cover a period of three years from the balance sheet date, together with the cash resources available to them, the directors have judged that it is appropriate for the financial statements to be prepared on the going concern basis.
c) The application of IFRS 15 - Revenue from contracts with customers requires an assessment of the elements of the contract to separate potentially bundled services requiring different treatment, the recognition of revenue at the point of performance obligations and the assessment of the correct amount of revenue for each of those obligations.
Sources of estimation uncertainty
a) Determining whether goodwill and other intangible assets are impaired requires an estimation of the value in use of the cash generating unit to which the goodwill and intangibles have been allocated. The carrying value of the investments are also assessed. The value in use calculations require an estimation of the future cash flows expected to arise from the cash generating units and a suitable discount rate in order to calculate a suitable present value. During the current year, the review led to an impairment of the investments in Group Companies of £1,275,000.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
3. Segmental analysis
The directors identify operating segments based upon the information which is regularly reviewed by the chief operating decision maker. The Group considers that the chief operating decision makers are the executive members of the Board of Directors. The Group has identified two reportable operating segments, being that of the provision of financial information and that of other services. The provision of financial information is made via the Group's various website platforms.
The parent entities operations are entirely of the provision of financial information.
Three minor operating segments, for which IFRS 8's quantitative thresholds have not been met, are currently combined below under 'other'. The main sources of revenue for these operating segments is the provision of financial broking services, financial conference events and other internet services not related to financial information. Segment information can be analysed as follows for the reporting period under review:
| 2022
| Provision of financial information | Other | Total |
| | £'000 | £'000 | £'000 |
| | | | |
| Revenue from external customers | 7,796 | 52 | 7,848 |
| Depreciation and amortisation | (405) | (32) | (437) |
| Other operating expenses | (9,338) | 551 | (8,787) |
| Other operating income | - | - | - |
| | | | |
| Segment operating (loss)/profit | (1,947) | 571 | (1,376) |
| | | | |
| Interest income | - | - | - |
| Interest expense | (14) | - | (14) |
| | | | |
| Segment assets | 1,718 | 1,896 | 3,597 |
| Segment liabilities | (2,232) | (58) | (2,290) |
| Purchases of non-current assets | 155 | - | 155 |
| | | | |
| 2021
| Provision of financial information | Other | Total |
| | £'000 | £'000 | £'000 |
| | | | |
| Revenue from external customers | 9,020 | 39 | 9,059 |
| Depreciation and amortisation | (408) | (21) | (429) |
| Other operating expenses | (6,763) | (403) | (7,166) |
| Other operating income | 162 | - | 162 |
| | | | |
| Segment operating profit/(loss) | 2,011 | (385) | 1,626 |
| | | | |
| Interest income | - | - | - |
| Interest expense | (21) | (1) | (22) |
| | | | |
| Segment assets | 4,451 | 815 | 5,266 |
| Segment liabilities | (2,113) | (30) | (2,143) |
| Purchases of non-current assets | 424 | - | 424 |
Revenue recognition per IFRS 15
|
| Point in time | Over time | Total |
| | £'000 | £'000 | £'000 |
| | | | |
| Revenue during 2021 | 5,266 | 3,793 | 9,059 |
| Revenue during 2022 | 4,183 | 3,668 | 7,851 |
| | | | |
Notes to the financial statements (continued)
Segmental analysis (continued)
The Group's revenues, which wholly relate to the sale of services, from external customers and its non-current assets, are divided into the following geographical areas:
|
| Revenue | Non-current assets | Revenue | Non-current assets |
| | 2022 | 2022 | 2021 | 2021 |
| | £'000 | £'000 | £'000 | £'000 |
| |
|
| | |
| UK (domicile) | 3,198 | 1,172 | 3,655 | 1,734 |
| USA | 4,525 | 1,064 | 5,240 | 1,047 |
| Other | 125 | - | 164 | - |
| | | | | |
| | 7,848 | 2,236 | 9,059 | 2,781 |
| | | | | |
Revenues are allocated to the country in which the customer resides. During both 2022 and 2021 no single customer accounted for more than 10% of the Group's total revenues.
4. Operating loss
|
| 2022 | 2021 |
| Operating (loss)/profit has been arrived at after charging: | £'000 | £'000 |
| |
| |
| Foreign exchange (gain)/loss | (2) | 50 |
| Depreciation and amortisation: | | |
| Depreciation of property, plant and equipment: | | |
| Depreciation on owned property, plant and equipment | 181 | 167 |
| Amortisation of intangible assets | 256 | 251 |
| |
| |
| Employee costs (Note 5) | 4,650 | 3,612 |
| | | |
| Lease payments on land and buildings (Note 22) | 103 | 100 |
| Audit and non-audit services: | | |
| Fees payable to the company's auditor for the audit of the Group's annual accounts | 45 | 38 |
Remuneration of key senior management for Group and Company
| | 2022 | 2021 |
| | £'000 | £'000 |
| Key senior management comprises only directors |
| |
| Salary and fees | 1,502 | 1,328 |
| Compensation for loss of office | 831 | - |
| Benefits in kind | - | - |
| Annual bonus | 80 | 40 |
| Share based payments | - | 43 |
| Post-employment benefits - defined contribution pension plans | 60 | 72 |
| | | |
| | 2,473 | 1,483 |
| Highest paid director | | |
| Salary and fees | 381 | 440 |
| Compensation for loss of office | 831 | - |
| Benefits in kind | - | - |
| Annual bonus | 25 | 15 |
| Share based payments | - | 15 |
| Post-employment benefits - defined contribution pension plans | 24 | 36 |
| | | |
| | 1,261 | 506 |
Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report
on page 13.
Notes to the financial statements (continued)
5. Employees
GROUP
|
| 2022 | 2021 |
| | £'000 | £'000 |
| Employee costs (including directors): |
| |
| Wages and salaries | 3,325 | 3,129 |
| Compensation for loss of office | 831 | - |
| Annual bonus | 80 | 40 |
| Social security costs | 309 | 280 |
| Pension costs | 105 | 120 |
| Share based payments | - | 43 |
| | | |
| | 4,650 | 3,612 |
| | |
|
| The average number of employees during the year was made up as follows: | |
|
| | |
|
| Development | 10 | 9 |
| Sales and Administration | 30 | 29 |
| | | |
| | 40 | 38 |
COMPANY
| | | 2022 | 2021 |
| | | £'000 | £'000 |
| | |
| |
| Employee costs (including directors): | |
| |
| Wages and salaries | | 2,140 | 2,036 |
| Compensation for loss of office | | 831 | - |
| Social security costs | | 225 | 198 |
| Pension | | 103 | 118 |
| Share based payments | | - | 43 |
| | | | |
| | | 3,299 | 2,395 |
| | | | |
The average monthly number of employees during the year was as follows:
| | | | |
| Development | | 4 | 4 |
| Sales and Administration | | 15 | 16 |
| | | | |
| | | 19 | 20 |
| | | | |
Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report
on page 13.
Notes to the financial statements (continued)
6. Non-recurring items
GROUP AND COMPANY
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Exceptional corporate and shareholder activity | 252 | - |
| Costs relating to the exit of directors | 1,114 | - |
| Early termination costs | 54 | - |
| | 1,420 | - |
During the year, the company went through a period of shareholder and management changes, during which time the company incurred legal and advisory fees. The culmination of the activity was the resignation of Mr Clement Chambers, for which the company incurred further fees in relation to his exit.
The company also chose to vacate the Throgmorton Street offices and incurred early termination costs on this lease.
Finally, the goodwill on the investment in IHUB has impaired during the review of the valuation of the investments.
7. Finance expense
GROUP
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Finance expense |
| |
| Lease interest | 10 | 19 |
| Bank interest | 4 | 3 |
8. Income tax expense
GROUP
|
| 2022 | 2021 |
| | £'000 | £'000 |
|
|
| |
| Current Tax: |
| |
| UK corporation tax on profits for the year | (24) | (10) |
| Adjustments in respect of prior periods | - | - |
| | | |
| Total current taxation | (24) | (10) |
| | | |
| Deferred tax | | |
| Origination and reversal of timing differences | 84 | 303 |
| Carried forward losses (DTA) | (84) | (303) |
| Effect of rate change | | - |
| Taxation | (24) | (10) |
Notes to the financial statements (continued)
Income tax expense (continued)
The tax assessed for the year is different from the standard rate of corporation tax as applied in the respective trading domains where the Group operates. The differences are explained below:
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| (Loss)/Profit before tax | (1,782) | 1,608 |
| (Loss)/Profit before tax multiplied by the respective standard rate of corporation tax applicable in the UK (19.00%) (2021: 19.00%) |
(339) |
306 |
| | | |
| Effects of: | | |
| Non-deductible expenses | 434 | (13) |
| Capital allowances | (9) | (9) |
| Carried forward losses utilised against profits | (27) | (165) |
| Enhanced Research & Development expenditure | (18) | (96) |
| Overseas tax rates | - | - |
| Surrender of tax losses for R & D tax credit | 27 | 14 |
| Adjustments in respect of prior periods | - | - |
| Current year R&D tax credit | (24) | (11) |
| Effect of difference in tax rates | 63 | 6 |
| Consolidation adjustments - no tax effect | (131) | (42) |
| Deferred tax - prior period adjustment | - | - |
| Deferred tax - difference between opening and current year tax rates | - | - |
| Movements in unrecognised deferred tax | - | - |
| | | |
| Tax credit for the year | (24) | (10) |
9. (Loss) / Profit per share
| | 12 months to 30 June | 12 months to 30 June |
| | 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| (Loss)/profit for the year attributable to equity shareholders | (1,368) | 1,618 |
| | | |
| Total (loss) / profit per share - basic and diluted | | |
| Basic | (5.22p) | 6.28p |
| Diluted | (5.22p) | 5.97p |
| | | |
| | | Shares |
| | | |
| Weighted average number of shares in issue for the year | 26,184,360 | 25,773,739 |
| Dilutive effect of options | - | 1,336,807 |
| | | |
| Weighted average shares for diluted earnings per share | 26,184,360 | 27,110,546 |
| | | |
Where a loss has been recorded for the year the diluted loss per share does not differ from the basic loss per share. Where a profit has been recorded but the average share price for the year remains under the exercise price the existence of options is not normally dilutive. However, whilst the average exercise price of all outstanding options is above the average share price there are a number of options which are not. Under these circumstances those options where the exercise price is below the average share price are treated as dilutive.
Notes to the financial statements (continued)
10. Property, plant and equipment
GROUP
|
| Leasehold property improvements | Computer equipment | Office equipment | Right of use lease assets | Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | | |
| At 1 July 2020 | 48 | 364 | 298 | 349 | 1,059 |
| Additions | - | 39 | - | - | 39 |
| FX difference | - | - | (28) | - | (28) |
| | | | | | |
| At 30 June 2021 | 48 | 403 | 270 | 349 | 1,070 |
| | | | | | |
| Additions | - | 32 | 7 | - | 39 |
| FX difference | - | - | 31 | - | 31 |
| | | | | | |
| At 30 June 2022 | 48 | 435 | 308 | 349 | 1,140 |
| | | | | | |
| Depreciation | | | | | |
| At 1 July 2020 | 48 | 276 | 293 | 77 | 694 |
| Charge for the year | - | 63 | 3 | 101 | 167 |
| FX difference | - | - | (30) | - | (30) |
| | | | | | |
| At 30 June 2021 | 48 | 339 | 266 | 178 | 831 |
| | | | | | |
| Charge for the year | - | 72 | 11 | 98 | 181 |
| FX difference | - | - | 30 | - | 30 |
| | | | | | |
| At 30 June 2022 | 48 | 411 | 307 | 276 | 1,042 |
| | | | | | |
| Net book value | | | | | |
| At 30 June 2022 | - | 24 | 1 | 73 | 98 |
| At 30 June 2021 | - | 64 | 4 | 171 | 239 |
| | | | | | |
Charge over assets
A fixed and floating charge is held by Barclays Bank which covers all the property and undertakings of the company against the provision of any loan, debenture or other bank liability.
Notes to the financial statements (continued)
Property, plant and equipment (continued)
COMPANY
|
| Leasehold property improvements | Computer equipment | Office equipment | Total |
| | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | |
| At 1 July 2020 | 48 | 359 | 106 | 513 |
| Additions | - | 39 | - | 39 |
| Disposals | - | - | - | - |
| | | | | |
| At 30 June 2021 | 48 | 398 | 106 | 552 |
| | | | | |
| Additions | - | 32 | - | 32 |
| Disposals | - | - | - | - |
| | | | | |
| At 30 June 2022 | 48 | 430 | 106 | 584 |
| | | | | |
| Depreciation | | | | |
| At 1 July 2020 | 48 | 271 | 106 | 425 |
| Charge for the year | - | 63 | - | 63 |
| Disposals | - | - | - | - |
| | | | | |
| At 30 June 2021 | 48 | 334 | 106 | 488 |
| | | | | |
| Charge for the year | - | 72 | - | 72 |
| Disposals | - | - | - | - |
| | | | | |
| At 30 June 2022 | 48 | 406 | 106 | 560 |
| | | | | |
| Net book value | | | | |
| At 30 June 2022 | - | 24 | - | 24 |
| At 30 June 2021 | - | 64 | - | 64 |
| | | | | |
11. Goodwill
GROUP
| | | | £'000 |
| | | | |
| At 1 July 2020 | | | 1,002 |
| Exchange differences | | | (132) |
| | | | |
| At 30 June 2021 | | | 870 |
| | | | |
| Exchange differences | | | 118 |
| | | | |
| | | | |
| At 30 June 2022 | | | 988 |
| | | | |
The goodwill carried in the balance sheet is attributable to InvestorsHub.com Inc.
Impairment testing - InvestorsHub.com Inc.
The Group tests goodwill annually for impairment. During the year, impairment tests were undertaken over the goodwill of InvestorsHub.com Inc. which is considered to be a single CGU. The recoverable amount was determined using a value in use calculation based upon management forecasts for the trading results for the three and a half years ending 31 December 2025.
A discount rate of 10% has been used for this exercise based on the estimated likely rate of debt financing for the company. The key assumptions utilised within the forecast model relate to the level of future sales. Increases have been estimated at between 0% and 5%. The closing exchange rate of $1.25/£ has been used (2021: $1.42/£). The value in use calculations indicate that InvestorsHub.com Inc. has a recoverable amount of £1,000,000 compared to an investment by ADVFN of £1,651,000 and a goodwill carrying value of £988,000. The Company's investment in InvestorsHub.com has been impaired, however goodwill has not been impaired based on the recoverable amount being greater than the carrying value.
Notes to the financial statements (continued)
12. Other intangible assets
GROUP
| | Licences | Brands & subscriber lists | Website development costs | Mobile application | Software | Crypto-currencies | Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Cost or valuation | | | | | |
|
|
| | | | | | |
|
|
| At 1 July 2020 | 162 | 2,129 | 2,181 | 10 | 386 | - | 4,868 |
| Additions | - | - | 294 | - | 91 | - | 385 |
| Disposals | - | - | - | - | - | - | |
| | | | | | | | |
| At 30 June 2021 | 162 | 2,129 | 2,475 | 10 | 477 | - | 5,253 |
| Additions | - | - | 74 | - | 39 | 1 | 114 |
| Disposals | - | - | - | - | (296) | - | (296) |
| | | | | | | | |
| At 30 June 2022 | 162 | 2,129 | 2,549 | 10 | 220 | 1 | 5,071 |
| | | | | | | | |
| Amortisation | | | | | | | |
| | | | | | | | |
| At 1 July 2020 | 162 | 2,129 | 1,076 | 10 | 63 | - | 3,440 |
| Charge for the year | - | - | 232 | - | 19 | - | 251 |
| Disposals | - | - | - | - | - | - | - |
| | | | | | | | |
| At 30 June 2021 | 162 | 2,129 | 1,308 | 10 | 82 | - | 3,691 |
| Charge for the year | - | - | 223 | - | 33 | - | 256 |
| Disposals | - | - | - | - | - | - | - |
| | | | | | | | |
| At 30 June 2022 | 162 | 2,129 | 1,531 | 10 | 115 | - | 3,947 |
| | | | | | | | |
| Net book value | | | | | | | |
| At 30 June 2022 | - | - | 1,018 | - | 105 | 1 | 1,124 |
| At 30 June 2021 | - | - | 1,167 | - | 395 | - | 1,562 |
| | | | | | | | |
All additions are internally generated by capitalisation of development work on websites and software projects.
The directors are satisfied that no indication of impairment exists in respect of these assets.
Notes to the financial statements (continued)
Other intangible assets (continued)
COMPANY
|
| | Licenses | Mobile application | Website development | Crypto-currencies | Total |
| | | £'000 | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | | | |
| | | | | | | |
| At 1 July 2020 | | 100 | 10 | 1,768 | - | 1,878 |
| Additions | | - | - | 294 | - | 294 |
| Disposals | | - | - | - | - | - |
| | | | | | | |
| At 30 June 2021 | | 100 | 10 | 2,062 | - | 2,172 |
| Additions | | - | - | 74 | 1 | 75 |
| Disposals | | - | - | - | - | - |
| | | | | | | |
| At 30 June 2022 | | 100 | 10 | 2,136 | 1 | 2,247 |
| | | | | | | |
| Amortisation | | | | | | |
| | | | | | | |
| At 1 July 2020 | | 90 | 10 | 1,456 | - | 1,556 |
| Charge for the year | | 10 | - | 224 | - | 234 |
| Disposals | | - | - | - | - | - |
| | | | | | | |
| At 30 June 2021 | | 100 | 10 | 1,680 | - | 1,790 |
| Charge for the year | | - | - | 223 | - | 223 |
| Disposals | | - | - | - | - | - |
| | | | | | | |
| At 30 June 2022 | | 100 | 10 | 1,903 | - | 2,013 |
| | | | | | | |
| Net book value | | | | | | |
| At 30 June 2022 | | - | - | 233 | 1 | 234 |
| At 30 June 2021 | | - | - | 382 | - | 382 |
| | | | | | | |
All additions are internally generated by capitalisation of development work on websites.
The directors are satisfied that no indication of impairment exists in respect of these assets.
Notes to the financial statements (continued)
13. Subsidiary companies consolidated in these accounts
COMPANY
| | | | Subsidiaries |
| | | | £'000 |
|
| |
| |
| At 1 July 2020 | |
| 2,276 |
| Impairment | |
| - |
| | | | |
| 30 June 2021 | | | 2,276 |
| | | | |
| Impairment | | | (1,275) |
| | | | |
| 30 June 2022 | | | 1,001 |
|
| | | |
The Group tests investments annually for impairment. During the year, impairment tests were undertaken over the investments of InvestorsHub.com Inc. and All IPO Plc which are each considered to be a single CGU. The recoverable amount was determined using a value in use calculation based upon management forecasts for the trading results for the three years ending 30 June 2023 and extended by another 2 years without growth. This 5-year forecast is then extended to perpetuity.
A discount rate of 10% has been used for this exercise based on the estimated likely rate of debt financing for the company. The key assumptions utilised within the forecast model relate to the level of future sales. Increases have been estimated at between 0% and 5%. The closing exchange rate of $1.25/£ has been used (2021: $1.42/£). The value in use calculations indicate that InvestorsHub.com Inc. has a recoverable amount of £1,000,000 compared to an investment by ADVFN of £1,651,000. The Company's investment in InvestorsHub.com has been impaired to the expected recoverable amount. The value in use calculations indicate that the value of use in All IPO is minimal and therefore the full investment, to the value of £624,000, has been impaired.
|
| Country of incorporation | % interest in ordinary shares | Principal activity | Registered address |
| | | 30 June 2022 | | |
| | |
| | |
| Cupid Bay Limited | England & Wales | 100.00 | Internet dating web site | Suite 28 Ongar Business Centre, The Gables, Ongar, England, CM5 0GA |
| Fotothing Limited | England & Wales | 100.00 | Dormant | As Cupid Bay Limited |
| NA Data Inc. | USA | 100.00 | Office services | P.O. Box 780 Harrisonville Mo. 64701 |
| InvestorsHub.com Inc. | USA | 100.00 | Financial information web site | As NA Data Inc. |
| ADVFN Brazil Limited | England & Wales | 100.00 | Dormant | As Cupid Bay Limited |
| E O Management Limited | England & Wales | 100.00 | Dormant | As Cupid Bay Limited |
| Throgmorton Street Capital Limited | England & Wales | 100.00 | Dormant | As Cupid Bay Limited |
| Advessel Limited | England & Wales | 100.00 | Dormant | As Cupid Bay Limited |
| All IPO Plc | England & Wales | 100.00 | Brokerage and software development | As Cupid Bay Limited |
| Writer Pub Limited | England & Wales | 100.00 | Dormant | As Cupid Bay Limited |
| MJAC InvestorsHub International Conferences Ltd | England & Wales | 100.00 | Dormant | As Cupid Bay Limited |
| | | | | |
The subsidiary companies Cupid Bay Limited and MJAC InvestorsHub International Conferences Ltd are exempt from audit under s479A of the Companies Act 2006.
Notes to the financial statements (continued)
14. Deferred tax
GROUP
The following are the major deferred tax liabilities and assets recognised by the Group and the movements thereon during the current and prior periods:
| | Intangible assets | Website development & software costs | US temporary differences | UK tax losses | Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | |
|
| At 30 June 2020 | 80 | (271) | (80) | 271 | - |
| Credit/(charge) to profit or loss | (80) | (32) | 80 | 32 | - |
| | | | | |
|
| At 30 June 2021 | - | (303) | | 303 | - |
| Credit/(charge) to profit or loss | - | (84) | - | 84 | - |
| | | | | |
|
| At 30 June 2022 | - | (387) | - | 387 | - |
Deferred tax in ADVFN Plc amounted to £57,800 and in subsidiary companies amounted to £26,000 in All IPO Plc. The deferred tax liability for the temporary difference has been recognised at 25% as per the future tax rate which has increased the deferred tax liability by £21,000. The deferred tax asset for the losses has also been recognised at 25% as per the future tax rate.
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances, after offset, for the purposes of financial reporting:
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Deferred tax liabilities |
| |
| - Website development & software costs | (84) | (303) |
| - US temporary differences | - | 80 |
| Deferred tax assets | | |
| - Intangible assets | - | (80) |
| - UK tax losses | 84 | 303 |
| | | |
| | - | - |
| | | |
At the balance sheet date the Group had unused tax losses of £5,340,000 (2021: £5,175,000) available for offset against future profits. The Group has surrendered losses of £169,000 for the R&D tax credit for the year. A deferred tax asset has been recognised in respect of £338,000 (2021: £1,212,000) of such losses, as these losses would offset any taxable profits arising as a result of the unwinding of the deferred tax liability in respect of website development costs. No deferred tax asset has been recognised in respect of the remaining £5,002,000 (2021: £3,963,000) due to the unpredictability of future profit streams. Substantially all of the losses may be carried forward indefinitely.
COMPANY
The Deferred Tax Liability in the ADVFN company is due to the temporary difference between the accounting base and tax base for the Intangible - Website development, temporary difference £232,000 and deferred tax liability £58,000
Notes to the financial statements (continued)
15. Trade and other receivables
GROUP
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
|
|
| Non-current assets |
| |
| Other receivables | 26 | 110 |
| | | |
| | | |
| Current assets | | |
| Trade receivables - gross | 320 | 416 |
| Less: provision for impairment - expected loss | (18) | (10) |
| Less: provision for impairment - specific | (2) | (7) |
| Trade receivables - net | 300 | 399 |
| Prepayments and accrued income | 130 | 132 |
| Other receivables | 6 | 5 |
| Recoverable corporation tax | 24 | 10 |
| | | |
| Total trade and other receivables | 460 | 546 |
| | | |
The ageing of trade receivables is as follows:
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Not past due and not impaired | 222 | 325 |
| Past due but not impaired | 96 | 84 |
| Past due and fully impaired | 2 | 7 |
| Trade receivables - gross | 320 | 416 |
| | | |
| Not past due and not impaired | 222 | 325 |
| Past due but not impaired: | | |
| Up to 30 days | - | 5 |
| 31 to 60 days | 12 | 57 |
| 61 to 90 days | 30 | 2 |
| Over 90 days | 54 | 20 |
| | 96 | 84 |
| Receivables not impaired | 318 | 409 |
| Past due but fully impaired | 2 | 7 |
| Less impairment provision | (20) | (17) |
| Trade receivables - net | 300 | 399 |
| | | |
Provision for impairment:
| | 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Opening | 17 | 29 |
| Movement in the year | 3 | (12) |
| Closing | 20 | 17 |
| | | |
The Directors consider that the carrying amount of trade and other receivables in both the Group and Company is approximately equal to their fair value.
Notes to the financial statements (continued)
COMPANY
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
|
|
| Non-current assets |
| |
| Other receivables | 24 | 108 |
| | | |
| | | |
| Current assets | | |
| Trade receivables - gross | 175 | 180 |
| Less: provision for impairment - expected loss | (8) | (6) |
| Less: provision for impairment - specific | (2) | (5) |
| Trade receivables - net | 165 | 169 |
| Prepayments and accrued income | 97 | 102 |
| Other receivables | - | - |
| Recoverable corporation tax | 24 | - |
| Amounts owed by Group undertakings | 500 | 438 |
| | | |
| Total trade and other receivables | 786 | 709 |
| | | |
The ageing of trade receivables is as follows:
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Not past due and not impaired | 133 | 120 |
| Past due but not impaired | 40 | 55 |
| Past due and fully impaired | 2 | 5 |
| Trade receivables - gross | 175 | 180 |
| | | |
| Not past due and not impaired | 133 | 120 |
| Past due but not impaired: | | |
| Up to 30 days | - | 2 |
| 31 to 60 days | 5 | 37 |
| 61 to 90 days | 14 | 2 |
| Over 90 days | 21 | 14 |
| | 40 | 55 |
| Receivables not impaired | 173 | 175 |
| Past due and fully impaired | 2 | 5 |
| Less impairment provision | (10) | (11) |
| Trade receivables - net | 165 | 169 |
| | | |
Provision for impairment:
| | 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Opening | 11 | 11 |
| Movement in the year | (1) | - |
| Closing | 10 | 11 |
| | | |
The Directors consider that the carrying amount of trade and other receivables in both the Group and Company is approximately equal to their fair value.
Notes to the financial statements (continued)
16. Credit quality of financial assets
Under IFRS 9 Financial Instruments the allowance account for doubtful debts is calculated using an Expected Credit Loss (ECL) model which takes a view on the lifetime expected credit loss to be suffered by the current receivables. On that basis the allocation to the allowance account for receivables at 30 June 2022 is calculated using the percentage credit loss expectations shown.
GROUP
As of 30 June 2022, trade receivables of £96,000 (2021: £84,000) were past due but not impaired (see note 15). These relate to a number of independent customers for whom there is no recent history of default.
| Expected credit loss provision | 2022 | 2021 | ||
| | £'000 | % | £'000 | £'000 |
| | | |
| |
| Not past due | 222 | 1.00 | 2 | 325 |
| Not more than 3 months | 42 | 5.00 | 2 | 64 |
| More than 3 months but not more than 6 months | 21 | 15.00 | 3 | 11 |
| More than 6 months but not more than 1 year | 24 | 25.00 | 6 | 9 |
| More than 1 year | 9 | 50.00 | 5 | - |
| | | | | |
| | 318 | | 18 | 409 |
| | | | | |
Impaired receivables allowance account
|
| 2022 | 2021 |
| Specific provision | £'000 | £'000 |
|
|
| |
| At 1 July | 7 | 17 |
| Utilised during the year | (12) | (26) |
| Created during the year | 7 | 16 |
| | | |
| At 30 June | 2 | 7 |
|
| | |
|
| | |
The carrying amount of the Group's trade receivables is denominated in the following currencies:
|
| 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Sterling | 135 | 104 |
| Euro | 1 | 1 |
| US dollar | 164 | 294 |
| | | |
| | 300 | 399 |
| | | |
Notes to the financial statements (continued)
Credit quality of financial assets (continued)
COMPANY
As of 30 June 2022, trade receivables of £40,000 (2021: £55,000) were past due but not impaired (see note 15). These relate to a number of independent customers for whom there is no recent history of default.
| Expected credit loss provision | 2022 | 2021 | ||
| | £'000 | % | £'000 | £'000 |
| | | |
| |
| Not past due | 133 | 1.00 | 1 | 120 |
| Not more than 3 months | 19 | 5.00 | 1 | 41 |
| More than 3 months but not more than 6 months | 5 | 15.00 | 1 | 10 |
| More than 6 months but not more than 1 year | 13 | 25.00 | 3 | 4 |
| More than 1 year | 3 | 50.00 | 2 | - |
| | | | | |
| | 173 | | 8 | 175 |
| | | | | |
Impaired receivables allowance account
|
| 2022 | 2021 |
| Specific provision | £'000 | £'000 |
|
|
| |
| At 1 July | 5 | 6 |
| Utilised during the year | (10) | (16) |
| Created during the year | 7 | 15 |
| | | |
| At 30 June | 2 | 5 |
The carrying amount of the Company's trade receivables is denominated in the following currencies:
|
| | 2022 | 2021 |
| | | £'000 | £'000 |
| | |
| |
| Sterling | | 122 | 104 |
| Euro | | 1 | 1 |
| US dollar | | 42 | 64 |
| | | | |
| | | 165 | 169 |
| | | | |
Notes to the financial statements (continued)
17. Interest bearing borrowings
Bank loans
As a result of the COVID-19 pandemic the Directors considered it prudent to take further steps to ensure that short term cashflow did not present a problem for the Group. Short term finance offered under the Business Bounce Back loan scheme and the US equivalent has provided an additional layer of protection whilst the economy rides out the effects of the pandemic. The US loan was drawn down on the basis that the loan would be over 2 years at 1% interest with a payment free period. However, this loan has now been 'forgiven' by the US Government and has become a grant, The UK loan is charged at 2.5% over 6 years with an interest and payment free period for the first 12 months.
Lease liabilities
The carrying value of the lease liabilities is included in the borrowing classification. There are no leases carried in the Company. For further details please see Note 22.
GROUP
| | 2022 | 2021 |
| | £'000 | £'000 |
| Non-current |
| |
| Bank loans | 41 | 54 |
| Lease liability | - | 87 |
| | | |
| | 41 | 141 |
| | | |
| Brought forward | 141 | 238 |
| Cash flows | (103) | (106) |
| Interest and fees | 3 | 9 |
| | | |
| As at 30 June | 41 | 141 |
| | | |
| Current | | |
| Bank loans | 13 | 13 |
| Lease liability | 87 | 103 |
| | | |
|
| 100 | 116 |
|
| | |
| Brought forward | 116 | 268 |
| Cash flows | (25) | (160) |
| Interest and fees | 9 | 8 |
| | | |
| As at 30 June | 100 | 116 |
Notes to the financial statements (continued)
Interest bearing borrowings (continued)
COMPANY
| | 2022 | 2021 |
| | £'000 | £'000 |
| Non-current |
| |
| Bank loans | 41 | 54 |
| | | |
| | | |
| | | |
| Brought forward | 54 | 39 |
| Cash flows | (14) | 15 |
| Interest and fees | 1 | - |
| | | |
| As at 30 June | 41 | 54 |
| | | |
| Current | | |
| Bank loans | 13 | 13 |
| | | |
|
| | |
|
| | |
| Brought forward | - | 11 |
| Cash flows | - | 2 |
| Interest and fees | - | - |
| | | |
| As at 30 June | 13 | 13 |
Changes in liabilities arising from financing activities
GROUP
| | 2021 | Cash | Loan | 2022 |
| | £'000 | flows | forgiven | £'000 |
| |
|
|
|
|
| Long term borrowing | 67 | (13) | - | 54 |
| | | | | |
| Lease liabilities | 190 | (103) | - | 87 |
| | | | | |
COMPANY
| | 2021 | Cash | New | 2022 |
| | £'000 | flows | leases | £'000 |
| |
|
|
|
|
| Long term borrowing | 67 | (13) | - | 54 |
| | | | | |
Notes to the financial statements (continued)
18. Financial instruments
GROUP
| Categories of financial instrument | 2022 | 2021 |
| | £'000 | £'000 |
| Non-current |
| |
| Trade and other receivables - at amortised cost | 26 | 110 |
| | | |
| Current | | |
| Trade and other receivables - at amortised cost | 306 | 404 |
| Trade and other receivables - non-financial assets | 130 | 142 |
| | | |
| | 436 | 546 |
| | | |
| Cash and cash equivalents | 915 | 1,939 |
| | | |
| Financial assets | 1,221 | 2,343 |
| | | |
| Non-current | | |
| Borrowings | 41 | 141 |
| | | |
| Current | | |
| Borrowings | 100 | 116 |
| | | |
| Trade and other payables - at amortised cost | 1,184 | 1,002 |
| Trade and other payables - non-financial liabilities | 963 | 884 |
| | | |
| | 2,147 | 1,886 |
| |
| |
| Financial liabilities | 1,284 | 1,118 |
| |
| |
COMPANY
| Categories of financial instrument | 2022 | 2021 |
| | £'000 | £'000 |
| Non-current |
| |
| Trade and other receivables - at amortised cost | 24 | 108 |
| | | |
| Current | | |
| Trade and other receivables - at amortised cost | 848 | 607 |
| Trade and other receivables - non-financial assets | 96 | 102 |
| | | |
| | 944 | 709 |
| | | |
| Cash and cash equivalents | 529 | 1,650 |
| | | |
| Financial assets | 1,376 | 2,257 |
| | | |
| Non-current | | |
| Borrowings | 41 | 54 |
| | | |
| Current | | |
| Borrowings | 13 | 13 |
| | | |
| Trade and other payables - at amortised cost | 1,411 | 1,310 |
| Trade and other payables - non financial liabilities | 837 | 779 |
| | | |
| | 2,248 | 2,089 |
| | | |
| Financial liabilities | 1,424 | 1,323 |
| | | |
Notes to the financial statements (continued)
19. Trade and other payables
GROUP
|
| 2022 | 2021 |
| | £'000 | £'000 |
|
|
| |
| Trade payables | 849 | 811 |
| Social security and other taxes | 191 | 179 |
| Accrued expenses and deferred income | 1,074 | 874 |
| Other payables | 34 | 22 |
| Amounts owed to related parties | - | - |
| | | |
| | 2,148 | 1,886 |
| | | |
COMPANY
| | | | 2022 | 2021 |
|
|
| | £'000 | £'000 |
| |
| | | |
| Trade payables |
| | 801 | 790 |
| Other tax and social security |
| | 166 | 160 |
| Accruals and deferred income |
| | 941 | 765 |
| Other payables |
| | 8 | 16 |
| Amounts owed to related parties |
| | - | - |
| Amounts owed to Group undertakings |
| | 332 | 358 |
| |
| | | |
| |
| | 2,248 | 2,089 |
| |
| | | |
20. Share capital
| GROUP AND COMPANY | | |
|
| Shares | £'000 |
| Issued, called up and fully paid Ordinary shares of £0.002 each | | |
|
| | |
| At 30 June 2021 | 26,115,319 | 52 |
| Share issued | 200,000 | 1 |
| | | |
| At 30 June 2022 | 26,315,319 | 53 |
| | | |
| | | |
Shares issued
On 29 April 2021 Mr Clement Chambers exercised 40,000 ordinary shares of at exercise price of 31.25p per share and 160,000 ordinary shares at an exercise price of 43.75p per share. The total paid was £ 82,500.
Share price
The market value of the shares at 30 June 2022 was 51.00p (2021; 65.50p). The range during the year was 49.00p to 87.20p (2021; 11.50p to 75.50p). Shareholders are entitled to one vote per Ordinary share held and dividends will be apportioned and paid proportionately to the amounts paid up on the Ordinary shares held.
Notes to the financial statements (continued)
21. Share based payments
GROUP AND COMPANY
The Group uses share options as remuneration for services of employees. The fair value is expensed over the remaining vesting period.
The fair value of options granted after 7 November 2002 has been arrived at using the Black-Scholes model. The assumptions inherent in the use of this model are as follows:
§ The option life is assumed to be at the end of the allowed period
§ There are no vesting conditions which apply to the share options/warrants other than continued service up to 3 years.
§ No variables change during the life of the option (e.g. dividend yield must be zero).
§ Volatility has been calculated over the 3 years prior to the grant date by reference to the daily share price.
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
| | 2022 WAEP | |
| |
| |
| | Number | Price (£) |
| |
|
|
| Outstanding at the beginning of the year | 1,751,473 | 0.4100 |
| Granted during the year | - | - |
| Exercised during the year | (200,000) | 0.4125 |
| Expired during the year | (200,000) | 0.7950 |
| | | |
| Outstanding at the year end | 1,351,473 | 0.4437 |
| | | |
| Exercisable at the year end | 1,351,473 | 0.4437 |
| | 2021 WAEP | |
| | | |
| | Number | Price (£) |
| | | |
| Outstanding at the beginning of the year | 2,162,946 | 0.7740 |
| Repriced during the year | (1,222,946) | 0.7740 |
| | 1,222,946 | 0.1400 |
| Granted during the year | - | - |
| Exercised during the year | (411,473) | 0.1400 |
| Expired during the year | - | - |
| | | |
| Outstanding at the year end | 1,751,473 | 0.4100 |
| | | |
| Exercisable at the year end | 1,751,473 | 0.4100 |
| | | |
Notes to the financial statements (continued)
Share based payments (continued)
The options outstanding at the year-end are set out below:
| Expiry date | Exercise | | 2022 | 2021 | |||
| | Price (£) | | | Share options | Remaining life (years) | Share options | Remaining life (years) |
| 10 year expiry | | | |
|
| | |
| 31 December 2022 | 0.1400 | Options | | 80,000 | 0.5 | 80,000 | 2 |
| 31 December 2022 | 0.1400 | Options | | 80,000 | 0.5 | 80,000 | 2 |
| 31 December 2022 | 0.1400 | Options | | 120,000 | 0.5 | 120,000 | 2 |
| 31 December 2022 | 0.1400 | Options | | 31,473 | 0.5 | 31,473 | 2 |
| 12 December 2024 | 0.1400 | Options | | 500,000 | 2 | 500,000 | 4 |
| 12 December 2024 | 0.7950 | Options | | 300,000 | 2 | 500,000 | 4 |
| 24 November 2027 | 0.4750 | Options | | 50,000 | 4 | 50,000 | 6 |
| 24 November 2027 | 1.0000 | Options | | 50,000 | 4 | 50,000 | 6 |
| 7 year expiry | | | |
|
| | |
| 12 December 2024 | 0.4375 | Options | | 60,000 | 2 | 220,000 | 4 |
| 12 December 2024 | 0.3125 | Options | | 80,000 | 2 | 120,000 | 4 |
| | | | |
|
| | |
| | | | | 1,351,473 | 2 | 1,751,473 | 6 |
| | | | | |
| | |
The total expense recognised during the year by the Group, for all schemes, was £nil (2021: £43,000).
Notes to the financial statements (continued)
22. Lease commitments
Property, plant and equipment comprises owned and leased assets.
GROUP
|
| | 2022 | 2021 |
|
| | £'000 | £'000 |
|
| | | |
| Property, plant and equipment - owned | | 25 | 58 |
| Right-of-use assets except for investment property | | 73 | 172 |
| | | 98 | 230 |
| Right-of-use assets | | | |
| The group leases office buildings: | | | |
| Balance at 1 July | | 171 | 272 |
| Additions in the year | | - | - |
| Depreciation charge for the year | | (98) | (101) |
| Balance at 30 June | | 73 | 171 |
| | | | |
| Lease Liability | | | |
| Maturity analysis - contractual discounted cash flows | | | |
| Within one year | | 87 | 103 |
| Two to five years | | - | 87 |
| Over five years | | - | - |
| Total lease liabilities at 30 June | | 87 | 190 |
| | | | |
| | | 2022 | 2021 |
| | | £'000 | £'000 |
| Lease liabilities per the balance sheet | | | |
| As at 30 June | | | |
| Current | | 87 | 103 |
| Non-current | | - | 87 |
| | | 87 | 190 |
| | | | |
| Amounts recognised in profit or loss | | | |
| Interest on lease liabilities | | 11 | 18 |
| | | | |
| Amounts recognized in the statement of cashflows | | | |
| Total cash outflow for leases | | 103 | 100 |
| | | | |
Notes to the financial statements (continued)
Lease commitments (continued)
The following payments are due to be made on operating lease commitments which are all leases on office accommodation:
| Land & buildings | 2022 | 2021 |
| | £'000 | £'000 |
| |
| |
| Within one year | 90 | 113 |
| Two to five years | - | 90 |
| Over five years | - | - |
| | | |
| | 90 | 203 |
| | | |
When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate at 1 July 2022. The weighted average rate applied is 7.5%.
COMPANY
At the reporting date ADVFN Plc company does not carry any reportable leases. This results from:
· The closure of the Throgmorton Street offices during early 2020
· Taking the exemption under IFRS 16 for the Ongar premises which allows all leases of less than 12 months to be excluded.
During the year to 30 June 2022 the Company did not renew leases on office premises.
Notes to the financial statements (continued)
23. Financial risk management
The Group and Company's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. This year the Group and Company are also exposed to global inflation risks. All companies within the group apply the same risk management programme, overall this focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. Risk management is carried out by the Board and their policies are outlined below.
a) Market risk
Foreign exchange risk
The Group is exposed to translation and transaction foreign exchange risk as it operates within the USA and other countries around the world and therefore transactions are denominated in Sterling, Euro, US Dollars and other currencies. The Group policy is to try and match the timing of the settlement of sales and purchase invoices so as to eliminate, as far as possible, currency exposure. During the year, the weakening of Sterling has decreased the impact of movements in US Dollars.
The Group does not currently hedge any transactions and therefore there are no open forward contracts. Foreign exchange differences on retranslation of foreign currency monetary assets and liabilities are taken to the income statement.
GROUP
The carrying value of the Group's foreign currency denominated assets and liabilities are set out below:
|
| | 2022 | 2021 | |||
|
| | | Assets | Liabilities | Assets | Liabilities |
| | | | £'000 | £'000 | £'000 | £'000 |
| | | |
|
| | |
| US Dollars | | | 1,448 | 468 | 1,802 | 450 |
| Euros | | | 28 | 59 | 51 | 19 |
| Yen | | | 18 | - | 14 | - |
| Other | | | - | 11 | - | 2 |
| | | | | | | |
| | | | 1,494 | 538 | 1,867 | 471 |
| | | | | | | |
COMPANY
The carrying value of the Company's foreign currency denominated assets and liabilities are set out below:
|
| | 2022 | 2021 | |||
|
| | | Assets | Liabilities | Assets | Liabilities |
| | | | £'000 | £'000 | £'000 | £'000 |
| | | |
|
| | |
| US Dollars | | | 726 | 199 | 337 | 133 |
| Euros | | | 28 | 59 | 51 | 19 |
| Yen | | | 18 | - | 14 | - |
| Other | | | - | 11 | - | 2 |
| | | | | | | |
| | | | 772 | 269 | 402 | 154 |
| | | | | | | |
Notes to the financial statements (continued)
Financial risk management (continued)
Foreign exchange risk (continued)
The majority of the group's financial assets are held in Sterling but movements in the exchange rate of the US Dollar and the Euro against Sterling have an impact on both the result for the year and equity. The Group considers its most significant exposure is to movements in the US Dollar.
Sensitivity to reasonably possible movements in the US Dollar exchange rate can be measured on the basis that all other variables remain constant. The effect on profit and equity of strengthening or weakening of the US Dollar in relation to sterling by 10% would result in a movement of:
Group: ±£50,000 (2021: ±£148,000).
Company: ±£57,000 (2021: ±£41,000).
Interest rate risk
The Group carries borrowings which are at fixed interest rates and as a result the directors consider that there is no significant interest rate risk.
b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. In order to minimise this risk the Group endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amount:
Group: £1,325,000 (2021: £2,453,000).
Company: £1,473,000 (2021: £2,365,000).
Provision of services by members of the Group results in trade receivables which the management consider to be of low risk, other receivables are likewise considered to be low risk. The management do not consider that there is any concentration of risk within either trade or other receivables. The receivables are due from companies whose credit performance is constantly monitored and, if an amount becomes overdue, immediate action is taken to obtain payment. The population of clients is diverse and this ensures no concentration of risk with any specific customer. A default is assumed and actioned when the Directors believe it will not be possible to obtain payment for the service supplied. This is not generally measured exclusively on the overdue period but judged on the basis of prior experience and the dialogue with the customer that follows the recognition of an overdue payment. For additional information on receivables see note 15.
Credit risk on cash and cash equivalents is considered to be small as the counterparties are all substantial banks with high credit ratings. The maximum exposure is the amount of the deposit.
c) Liquidity risk
The Group currently holds cash balances in Sterling, US Dollars and Euros to provide funding for normal trading activity. The Group also has access to additional equity funding and, for short term flexibility, overdraft facilities would be arranged with the Group's bankers. Trade and other payables are monitored as part of normal management routine. Liabilities are disclosed as follows:
Notes to the financial statements (continued)
Financial risk management (continued)
Liquidity risk (continued)
GROUP
| 2022 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| | | | | |
| Trade payables | 849 | - | - | - |
| Accruals | 303 | - | - | - |
| Other payables | 32 | - | - | - |
| Amounts owed to related parties | - | - | - | - |
| | | | | |
| 2021 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| |
| | | |
| Trade payables | 811 | - | - | - |
| Accruals | 168 | - | - | - |
| Other payables | 22 | - | - | - |
| Amounts owed to related parties | - | - | - | - |
| | | | | |
COMPANY
| 2022 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| | | | | |
| Trade payables | 801 | - | - | - |
| Accruals | 272 | - | - | - |
| Other payables | 8 | - | - | - |
| Amounts owed to related parties | - | - | - | - |
| Amounts owed to Group undertakings | 332 | - | - | - |
| | | | | |
| 2021 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| |
| | | |
| Trade payables | 790 | - | - | - |
| Accruals | 146 | - | - | - |
| Other payables | 16 | - | - | - |
| Amounts owed to related parties | - | - | - | - |
| Amounts owed to Group undertakings | 358 | - | - | - |
| | | | | |
d) Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in a volatile and tight credit economy.
The Group will also seek to minimise the cost of capital and attempt to optimise the capital structure, which currently means maintaining equity funding and keeping debt levels to insignificant amounts of lease funding. Share capital and premium together amount to £358,000.
During the year, the Group paid a dividend to shareholders of £589,000 as part of its capital strategy to provide returns to shareholders and benefits for other members. The Group continues to plan for growth, and it will continue to be important to maintain the Group's credit rating and ability to borrow should acquisition targets become available.
Capital for further development of the Group's activities will, where possible, be achieved by share issues and not by carrying significant debt.
Notes to the financial statements (continued)
Financial risk management (continued)
e) Inflation risk
Inflation risk refers to the risks posed to the Group due to rising inflation. This increase in inflation could lead to increasing costs and potentially decreasing revenue as companies seek to decrease their own costs. Management have considered these factors in preparing their going concern forecasts and will continue to monitor the level of expenses and revenue going forward.
24. Capital commitments
GROUP AND COMPANY
At 30 June 2022 neither the Group nor the Company had any capital commitments (2021: £nil).
25. Related party transactions
GROUP
Online Blockchain Plc is related by virtue of having common directors, M J Hodges and J B Mullins and as Online Blockchain Plc holds approximately 17.64% of the shares in the Company. Advertising recharges were paid to Online Blockchain Plc Group amounting to £nil (2021: £53,000). Online Blockchain Plc was owed £nil (2021: £Nil) by ADVFN Plc at the balance sheet date.
The remuneration paid to Directors is disclosed on page 14 of the Directors' Report; there were no other related party transactions. Transactions with related parties were carried out on an arm's length basis.
COMPANY
Online Blockchain Plc is related by virtue of having common directors, M J Hodges, C H Chambers and J B Mullins and as Online Blockchain Plc holds approximately 17.64% of the shares in the company. Advertising recharges were paid to Online Blockchain Plc Group amounting to £nil (2021: £53,000). Online Blockchain Plc was owed £nil (2021: £Nil) by ADVFN Plc at the balance sheet date.
The remuneration paid to Directors is disclosed on page 13 of the Directors' Report; there were no other related party transactions. Transactions with related parties were carried out on an arm's length basis.
26. Events after the balance sheet date
There were no significant events to report after the balance sheet date.
27. Accounts
Copies of these accounts are available from the Company's registered office at Suite 28, Ongar Business Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA or from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.
and from the ADVFN plc website:
ENDS
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