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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Vroom Inc | NASDAQ:VRM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.00 | 5.00 | 5.45 | 0 | 00:00:00 |
Continued Progress on Operational Initiatives and Improved Portfolio Performance at UACC
Vroom, Inc. (Nasdaq:VRM) today announced financial results for the second quarter ended June 30, 2024.
HIGHLIGHTS OF SECOND QUARTER 2024
Tom Shortt, the Company’s Chief Executive Officer, said “Overall, I am pleased with our second quarter 2024 results. We grew origination volume and our serviced loan portfolio year over year, while continuing to focus on portfolio performance. We currently expect originations since early 2023 to perform at pre-pandemic levels, and are beginning to see positive impacts of our prior decision to tighten credit, resulting in improvements in credit losses compared to the prior quarter. We are focused on improving processes and technology, digitization and automation, and reducing costs across the business.”
SECOND QUARTER 2024 FINANCIAL DISCUSSION
All financial comparisons are on a year-over-year basis unless otherwise noted. The following financial information is unaudited.
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
$ Change
2024
2023
$ Change
Interest income
$
51,862
$
46,995
$
4,867
$
102,939
$
81,363
$
21,576
Interest expense:
Warehouse credit facility
6,986
3,658
3,328
16,457
6,757
9,700
Securitization debt
7,995
5,981
2,014
12,864
10,326
2,538
Total interest expense
14,981
9,639
5,342
29,321
17,083
12,238
Net interest income
36,881
37,356
(475
)
73,618
64,280
9,338
Realized and unrealized losses, net of recoveries
18,729
23,187
(4,458
)
49,548
38,915
10,633
Net interest income after losses and recoveries
18,152
14,169
3,983
24,070
25,365
(1,295
)
Noninterest income:
Servicing income
1,587
2,551
(964
)
3,606
5,405
(1,799
)
Warranties and GAP income (loss), net
1,378
751
627
(8,264
)
3,586
(11,850
)
CarStory revenue
2,913
3,224
(311
)
5,892
6,394
(502
)
Gain on debt extinguishment
—
10,931
(10,931
)
—
19,640
(19,640
)
Other income
3,141
3,071
70
5,925
6,103
(178
)
Total noninterest income
9,019
20,528
(11,509
)
7,159
41,128
(33,969
)
Expenses:
Compensation and benefits
27,176
21,341
5,835
51,286
44,562
6,724
Professional fees
1,488
2,444
(956
)
4,831
7,417
(2,586
)
Software and IT costs
4,036
4,804
(768
)
8,658
10,050
(1,392
)
Depreciation and amortization
7,232
7,190
42
14,858
14,422
436
Interest expense on corporate debt
1,549
1,527
22
2,940
2,867
73
Impairment charges
—
—
—
2,752
—
2,752
Other expenses
4,961
4,571
390
9,416
9,773
(357
)
Total expenses
46,442
41,877
4,565
94,741
89,091
5,650
Loss from continuing operations before provision for income taxes
(19,271
)
(7,180
)
(12,091
)
(63,512
)
(22,598
)
(40,914
)
(Benefit) provision for income taxes from continuing operations
(167
)
286
(453
)
269
337
(68
)
Net loss from continuing operations
$
(19,104
)
$
(7,466
)
$
(11,638
)
$
(63,781
)
$
(22,935
)
$
(40,846
)
Net loss from discontinued operations
$
(2,084
)
$
(58,573
)
$
56,489
$
(25,025
)
$
(117,844
)
$
92,819
Net loss
$
(21,188
)
$
(66,039
)
$
44,851
$
(88,806
)
$
(140,779
)
$
51,973
Results by Segment
UACC
Three Months Ended June 30,
2024
2023
Change
% Change
(in thousands)
Interest income
$
52,389
$
47,531
$
4,858
10.2
%
Interest expense:
Warehouse credit facility
6,986
3,658
3,328
91.0
%
Securitization debt
7,995
5,981
2,014
33.7
%
Total interest expense
14,981
9,639
5,342
55.4
%
Net interest income
37,408
37,892
(484
)
(1.3
)%
Realized and unrealized losses, net of recoveries
19,582
20,386
(804
)
(3.9
)%
Net interest income after losses and recoveries
17,826
17,506
320
1.8
%
Noninterest income:
Servicing income
1,587
2,551
(964
)
(37.8
)%
Warranties and GAP income, net
1,640
1,478
162
11.0
%
Other income
2,098
977
1,121
114.7
%
Total noninterest income
5,325
5,006
319
6.4
%
Expenses:
Compensation and benefits
20,539
16,392
4,147
25.3
%
Professional fees
575
1,028
(453
)
(44.1
)%
Software and IT costs
2,605
2,974
(369
)
(12.4
)%
Depreciation and amortization
5,630
5,582
48
0.9
%
Interest expense on corporate debt
629
436
193
44.2
%
Other expenses
3,054
1,841
1,213
65.9
%
Total expenses
33,032
28,253
4,779
16.9
%
Adjusted EBITDA
$
(2,824
)
$
291
$
(3,115
)
(1,070.4
)%
Interest income on cash and cash equivalents
$
(560
)
$
(506
)
(54
)
10.7
%
Stock compensation expense
$
865
$
519
346
66.8
%
Six Months Ended June 30,
2024
2023
Change
% Change
(in thousands)
Interest income
$
103,930
$
82,830
$
21,100
25.5
%
Interest expense:
Warehouse credit facility
16,457
6,757
9,700
143.6
%
Securitization debt
12,864
10,326
2,538
24.6
%
Total interest expense
29,321
17,083
12,238
71.6
%
Net interest income
74,609
65,747
8,862
13.5
%
Realized and unrealized losses, net of recoveries
47,343
32,658
14,685
45.0
%
Net interest income after losses and recoveries
27,266
33,089
(5,823
)
(17.6
)%
Noninterest income:
Servicing income
3,606
5,405
(1,799
)
(33.3
)%
Warranties and GAP income, net
3,250
3,681
(431
)
(11.7
)%
Other income
4,568
2,031
2,537
124.9
%
Total noninterest income
11,424
11,117
307
2.8
%
Expenses:
Compensation and benefits
39,327
34,928
4,399
12.6
%
Professional fees
1,451
3,569
(2,118
)
(59.3
)%
Software and IT costs
5,702
5,679
23
0.4
%
Depreciation and amortization
11,651
11,209
442
3.9
%
Interest expense on corporate debt
1,100
633
467
73.7
%
Impairment charges
2,752
—
2,752
100.0
%
Other expenses
5,577
4,261
1,316
30.9
%
Total expenses
67,561
60,279
7,282
12.1
%
Adjusted EBITDA
$
(12,970
)
$
(4,177
)
$
(8,793
)
210.5
%
Interest income on cash and cash equivalents
$
(1,128
)
$
(954
)
(174
)
18.2
%
Stock compensation expense
$
1,033
$
1,008
24
2.4
%
CarStory
Three Months Ended June 30,
2024
2023
Change
% Change
(in thousands)
Noninterest income:
CarStory revenue
$
2,913
$
3,224
$
(311
)
(9.6
)%
Other income
190
93
97
104.3
%
Total noninterest income
3,103
3,317
(214
)
(6.5
)%
Expenses:
Compensation and benefits
2,461
2,420
41
1.7
%
Professional fees
80
113
(33
)
(29.3
)%
Software and IT costs
21
171
(150
)
(87.7
)%
Depreciation and amortization
1,602
1,608
(6
)
(0.4
)%
Other expenses
55
152
(97
)
(63.8
)%
Total expenses
4,219
4,464
(245
)
(5.5
)%
Adjusted EBITDA
$
372
$
634
$
(262
)
(41.3
)%
Interest income on cash and cash equivalents
$
(190
)
$
(88
)
(102
)
116.9
%
Stock compensation expense
$
76
$
261
(185
)
(71.0
)%
Six Months Ended June 30,
2024
2023
Change
% Change
(in thousands)
Noninterest income:
CarStory revenue
$
5,892
$
6,394
$
(502
)
(7.9
)%
Other income
363
141
222
157.4
%
Total noninterest income
6,255
6,535
(280
)
(4.3
)%
Expenses:
Compensation and benefits
4,675
4,821
(146
)
(3.0
)%
Professional fees
202
290
(88
)
(30.4
)%
Software and IT costs
188
345
(157
)
(45.5
)%
Depreciation and amortization
3,207
3,213
(6
)
(0.2
)%
Other expenses
173
301
(128
)
(42.5
)%
Total expenses
8,444
8,969
(525
)
(5.9
)%
Adjusted EBITDA
$
930
$
1,201
$
(271
)
(22.5
)%
Interest income on cash and cash equivalents
$
(363
)
$
(134
)
(229
)
170.7
%
Stock compensation expense
$
276
$
556
(281
)
(50.4
)%
Corporate
Three Months Ended June 30,
2024
2023
Change
% Change
(in thousands)
Interest income
$
(527
)
$
(536
)
$
9
1.7
%
Realized and unrealized losses, net of recoveries
(853
)
2,801
(3,654
)
(130.4
)%
Net interest income after losses and recoveries
325
(3,337
)
3,663
109.8
%
Noninterest income:
Warranties and GAP loss, net
$
(262
)
$
(727
)
$
465
64.0
%
Gain on debt extinguishment
—
10,931
(10,931
)
(100.0
)%
Other income
853
2,001
(1,148
)
(57.4
)%
Total noninterest income
591
12,205
(11,614
)
(95.2
)%
Expenses:
Compensation and benefits
4,176
2,529
1,647
65.1
%
Professional fees
833
1,303
(470
)
(36.0
)%
Software and IT costs
1,410
1,659
(249
)
(15.0
)%
Interest expense on corporate debt
920
1,091
(171
)
(15.7
)%
Other expenses
1,852
2,578
(726
)
(28.2
)%
Total expenses
9,191
9,160
31
0.3
%
Adjusted EBITDA
$
(5,089
)
$
(11,244
)
$
6,155
54.7
%
Interest income on cash and cash equivalents
$
(432
)
$
(2,000
)
1,568
78.4
%
Stock compensation expense
$
1,505
$
889
615
69.2
%
Six Months Ended June 30,
2024
2023
Change
% Change
(in thousands)
Interest income
$
(991
)
$
(1,467
)
$
476
32.5
%
Realized and unrealized losses, net of recoveries
2,205
6,257
(4,052
)
(64.8
)%
Net interest income after losses and recoveries
(3,196
)
(7,724
)
4,528
58.6
%
Noninterest (loss) income:
Warranties and GAP loss, net
(11,514
)
(95
)
$
(11,419
)
12,020.0
%
Gain on debt extinguishment
—
19,640
(19,640
)
(100.0
)%
Other income
994
3,931
(2,937
)
(74.7
)%
Total noninterest (loss) income
(10,520
)
23,476
(33,996
)
(144.8
)%
Expenses:
Compensation and benefits
7,284
4,813
2,470
51.3
%
Professional fees
3,178
3,559
(381
)
(10.7
)%
Software and IT costs
2,768
4,025
(1,258
)
(31.2
)%
Interest expense on corporate debt
1,840
2,234
(394
)
(17.6
)%
Other expenses
3,666
5,211
(1,546
)
(29.7
)%
Total expenses
18,735
19,842
(1,108
)
(5.6
)%
Adjusted EBITDA
$
(27,654
)
$
(23,644
)
$
(4,010
)
17.0
%
Interest income on cash and cash equivalents
$
(695
)
$
(3,930
)
3,235
82.3
%
Stock compensation expense
$
2,461
$
1,783
678
38.0
%
Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance: EBITDA and Adjusted EBITDA. These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with other operating and financial performance measures presented in accordance with U.S. GAAP. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with U.S. GAAP. We have reconciled all non-GAAP financial measures with the most directly comparable U.S. GAAP financial measures.
EBITDA and Adjusted EBITDA are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because EBITDA and Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.
EBITDA and Adjusted EBITDA
We calculate EBITDA as net loss before interest expense on corporate debt, interest income on cash and cash equivalents, income tax expense and depreciation and amortization expense.
We calculate Adjusted EBITDA as EBITDA adjusted to exclude stock compensation expense, severance expense related to the continuing operations, gain on debt extinguishment and long-lived asset impairment charges.
The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net loss from continuing operations, which is the most directly comparable U.S. GAAP measure:
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Net loss from continuing operations
$
(19,104
)
$
(7,466
)
$
(63,781
)
$
(22,935
)
Adjusted to exclude the following:
Interest expense on corporate debt
1,549
1,527
2,940
2,867
Interest income on cash and cash equivalents
(1,182
)
(2,594
)
(2,187
)
(5,019
)
Provision for income taxes
(167
)
286
269
337
Depreciation and amortization
7,232
7,190
14,858
14,422
EBITDA
$
(11,672
)
$
(1,057
)
$
(47,901
)
$
(10,328
)
Stock compensation expense
2,446
1,669
$
3,770
$
3,348
Severance
1,685
—
$
1,685
—
Gain on debt extinguishment
—
(10,931
)
—
(19,640
)
Impairment charges
—
—
2,752
—
Adjusted EBITDA
$
(7,541
)
$
(10,319
)
$
(39,694
)
$
(26,620
)
About Vroom (Nasdaq: VRM)
Vroom owns and operates United Auto Credit Corporation (UACC), a leading indirect automotive lender serving the independent and franchise dealer market nationwide, and CarStory, a leader in AI-powered analytics and digital services for automotive retail. During fiscal 2023, Vroom also operated an end-to-end ecommerce platform to buy and sell used vehicles. Pursuant to its previously announced Value Maximization Plan, Vroom discontinued its ecommerce operations and used vehicle dealership business.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding cost-savings and their expected benefits, our expectations regarding UACC's business, including with respect to originations and the impact of credit tightening, future results of operations and financial position, including profitability and our available liquidity under the warehouse credit facilities, and the timing of any of the foregoing. These statements are based on management’s current assumptions and are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated by our Quarterly report on Form 10-Q for the quarter ended June 30, 2024, which is available on our Investor Relations website at ir.vroom.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.
VROOM, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
As of June 30,
As of December 31,
2024
2023
ASSETS
Cash and cash equivalents
$
63,393
$
135,585
Restricted cash (including restricted cash of consolidated VIEs of $47.3 million and $49.1 million, respectively)
48,205
73,234
Finance receivables at fair value (including finance receivables of consolidated VIEs of $429.3 million and $341.4 million, respectively)
466,905
348,670
Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $399.3 million and $457.2 million, respectively)
413,670
503,546
Interest receivable (including interest receivables of consolidated VIEs of $13.9 million and $13.7 million, respectively)
14,973
14,484
Property and equipment, net
2,219
4,982
Intangible assets, net
118,381
131,892
Operating lease right-of-use assets
8,918
7,063
Other assets (including other assets of consolidated VIEs of $9.6 million and $13.3 million, respectively)
33,908
59,429
Assets from discontinued operations
10,137
196,537
Total assets
$
1,180,709
$
1,475,422
LIABILITIES AND STOCKHOLDERS’ EQUITY
Warehouse credit facilities of consolidated VIEs
$
270,784
$
421,268
Long-term debt (including securitization debt of consolidated VIEs of $272.4 million at amortized cost and $199.8 million at fair value as of June 30, 2024 and $314.1 million at fair value as of December 31, 2023)
794,734
626,583
Operating lease liabilities
11,587
10,459
Other liabilities (including other liabilities of consolidated VIEs of $16.0 million and $14.3 million, respectively)
51,581
61,321
Liabilities from discontinued operations
8,881
228,120
Total liabilities
1,137,567
1,347,751
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.001 par value; 500,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 1,806,777 and 1,791,286 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
2
2
Additional paid-in-capital
2,092,657
2,088,381
Accumulated deficit
(2,049,517
)
(1,960,712
)
Total stockholders’ equity
43,142
127,671
Total liabilities and stockholders’ equity
$
1,180,709
$
1,475,422
VROOM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Interest income
$
51,862
$
46,995
$
102,939
$
81,363
Interest expense:
Warehouse credit facility
6,986
3,658
16,457
6,757
Securitization debt
7,995
5,981
12,864
10,326
Total interest expense
14,981
9,639
29,321
17,083
Net interest income
36,881
37,356
73,618
64,280
Realized and unrealized losses, net of recoveries
18,729
23,187
49,548
38,915
Net interest income after losses and recoveries
18,152
14,169
24,070
25,365
Noninterest income:
Servicing income
1,587
2,551
3,606
5,405
Warranties and GAP income (loss), net
1,378
751
(8,264
)
3,586
CarStory revenue
2,913
3,224
5,892
6,394
Gain on debt extinguishment
—
10,931
—
19,640
Other income
3,141
3,071
5,925
6,103
Total noninterest income
9,019
20,528
7,159
41,128
Expenses:
Compensation and benefits
27,176
21,341
51,286
44,562
Professional fees
1,488
2,444
4,831
7,417
Software and IT costs
4,036
4,804
8,658
10,050
Depreciation and amortization
7,232
7,190
14,858
14,422
Interest expense on corporate debt
1,549
1,527
2,940
2,867
Impairment charges
—
—
2,752
—
Other expenses
4,961
4,571
9,416
9,773
Total expenses
46,442
41,877
94,741
89,091
Loss from continuing operations before provision for income taxes
(19,271
)
(7,180
)
(63,512
)
(22,598
)
(Benefit) provision for income taxes from continuing operations
(167
)
286
269
337
Net loss from continuing operations
$
(19,104
)
$
(7,466
)
$
(63,781
)
$
(22,935
)
Net loss from discontinued operations
$
(2,084
)
$
(58,573
)
$
(25,025
)
$
(117,844
)
Net loss
$
(21,188
)
$
(66,039
)
$
(88,806
)
$
(140,779
)
Net loss per share attributable to common stockholders, continuing operations, basic and diluted
$
(10.61
)
$
(4.29
)
$
(35.49
)
$
(13.22
)
Net loss per share attributable to common stockholders, discontinued operations, basic and diluted
$
(1.16
)
$
(33.68
)
$
(13.92
)
$
(67.90
)
Total net loss per share attributable to common stockholders, basic and diluted
$
(11.77
)
$
(37.97
)
$
(49.41
)
$
(81.12
)
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted
1,800,486
1,739,336
1,797,394
1,735,486
VROOM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
2024
2023
Operating activities
Net loss from continuing operations
$
(63,781
)
$
(22,935
)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment charges
2,752
—
Profit share receivable
11,405
—
Gain on debt extinguishment
—
(19,640
)
Depreciation and amortization
14,858
14,422
Amortization of debt issuance costs
2,021
1,623
Losses on finance receivables and securitization debt, net
69,430
42,532
Stock-based compensation expense
3,937
3,348
Provision to record finance receivables held for sale at lower of cost or fair value
(4,434
)
1,651
Amortization of unearned discounts on finance receivables at fair value
(9,772
)
(13,414
)
Other, net
(2,845
)
(6,755
)
Changes in operating assets and liabilities:
Finance receivables, held for sale
Originations of finance receivables, held for sale
(231,639
)
(274,707
)
Principal payments received on finance receivables, held for sale
85,905
42,862
Other
790
505
Interest receivable
(489
)
(5,028
)
Other assets
5,605
7,161
Other liabilities
(9,740
)
(11,488
)
Net cash used in operating activities from continuing operations
(125,997
)
(239,863
)
Net cash provided by operating activities from discontinued operations
82,820
7,738
Net cash used in operating activities
(43,177
)
(232,125
)
Investing activities
Finance receivables, held for investment at fair value
Purchases of finance receivables, held for investment at fair value
—
(3,392
)
Principal payments received on finance receivables, held for investment at fair value
65,523
91,892
Consolidation of VIEs
—
11,409
Principal payments received on beneficial interests
1,421
3,306
Purchase of property and equipment
(926
)
(1,249
)
Net cash provided by investing activities from continuing operations
66,018
101,966
Net cash provided by (used in) investing activities from discontinued operations
10,834
(7,272
)
Net cash provided by investing activities
76,852
94,694
Financing activities
Proceeds from borrowings under secured financing agreements, net of issuance costs
296,569
261,991
Principal repayment under secured financing agreements
(135,017
)
(103,980
)
Proceeds from financing of beneficial interests in securitizations
15,821
24,506
Principal repayments of financing of beneficial interests in securitizations
(6,281
)
(2,304
)
Proceeds from warehouse credit facilities
193,400
211,400
Repayments of warehouse credit facilities
(343,884
)
(263,216
)
Repurchases of convertible senior notes
—
(13,194
)
Other financing activities
(326
)
(1,043
)
Net cash provided by financing activities from continuing operations
20,282
114,160
Net cash used in financing activities from discontinued operations
(151,178
)
(144,508
)
Net cash used in financing activities
(130,896
)
(30,348
)
Net decrease in cash, cash equivalents and restricted cash
(97,221
)
(167,779
)
Cash, cash equivalents and restricted cash at the beginning of period
208,819
472,010
Cash, cash equivalents and restricted cash at the end of period
$
111,598
$
304,231
VROOM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
(unaudited)
Supplemental disclosure of cash flow information:
Cash paid for interest
$
29,321
$
16,301
Cash paid for income taxes
$
373
$
3,682
Supplemental disclosure of non-cash investing and financing activities:
Finance receivables from consolidation of 2022-2 securitization transaction
$
—
$
180,706
Elimination of beneficial interest from the consolidation of 2022-2 securitization transaction
$
—
$
9,811
Securitization debt from consolidation of 2022-2 securitization transaction
$
—
$
186,386
Reclassification of finance receivables held for sale to finance receivables at fair value, net
$
—
$
248,081
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808615708/en/
Investor Relations:
Vroom Jon Sandison investors@vroom.com
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