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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Advfn Plc | LSE:AFN | London | Ordinary Share | GB00BPT24C10 | ORD 0.2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 16.50 | 16.00 | 17.00 | 16.50 | 16.50 | 16.50 | 0.00 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Information Retrieval Svcs | 5.46M | -2.17M | -0.0469 | -3.52 | 7.64M |
From Nov 2023 to Nov 2024
TIDMAFN
RNS Number : 5361X
ADVFN PLC
21 December 2023
For immediate release
21 December 2023
ADFVN PLC
("ADVFN" or the "Company")
Audited Results for the year ended 30 June 2023
Notice of General Meeting
The Board of ADVFN announces the audited annual results for the year ended 30 June 2023. 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 Company is also publishing today a Notice of General Meeting which is due to be held on 12 January 2024 at 10.30 a.m at RPC, Tower Bridge House, St Katherine's Way, London E1W 1AA. A copy of the Notice is also available
on the Company's website, http://www.advfnplc.com .
A copy of the Notice together with proxy voting forms and Accounts are being posted to all shareholders who are required to receive or have formally requested to receive these documents.
For further information please contact:
ADVFN plc Amit Tauman (CEO) +44 (0) 203 8794 460 Beaumont Cornish Limited (Nominated Adviser) Michael Cornish Roland Cornish +44 (0) 207 628 3396 Peterhouse Capital Limited (Broker) Eran Zucker +44 (0) 207 469 0930
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 Amit Tauman, Director.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.
Chairman's Statement
As the Non-Executive Chairman of ADVFN, this year has been marked by significant evolution in both our Board and executive roles. The dramatic changes we've experienced have brought challenges, but they have also opened opportunities for future growth and improvement. Our focus has been on ensuring that these transitions align with our vision and future goals and reinforce our commitment to robust governance.
In supervising the executive team, led by CEO Amit Tauman, the Board has been instrumental in navigating these changes. We have emphasised operational efficiency and financial stability, ensuring that our strategic initiatives are both effective and responsible.
Currently, we are in the process of recruiting high-level positions further to strengthen our leadership team and enhance diversity. This pursuit is critical to our ongoing commitment to excellence in governance and strategic oversight.
In conclusion, we remain steadfast in our dedication to steering ADVFN towards sustained growth and success.
Lord Gold
Non-executive Chairman
Chief Executive's Statement
As the CEO of ADVFN, I am honored to guide our company through a transformative period. Upon assuming my role, I was confronted with a reality far more complex than anticipated: the company was struggling with significant financial limitations, possessing barely any cash reserves. Moreover, the need for a strategic overhaul in our organisational structure, culture and staff was evident, especially while navigating through difficult market conditions.
While this period has not been without its share of challenges, our progress over the last year has been substantial and encouraging. The work we have done and are continuing to do can be categorised under the following headings:
Overcoming Challenges and Legacy Constraints:
-- We have addressed the challenges of outdated infrastructure and the risks associated with our old hardware, which often resulted in system downtime and additional risk exposures. In parallel, we have initiated a migration to cloud-based solutions to enhance performance and further mitigate risk.
-- We have resolved complexities with our joint venture in Brazil, unexpected audits and historical vendor agreements which have now been agreed upon.
-- We have wound down non-core operations including ALLIPO, MJAC, Fotothing, CupidBay and Dubai offices, which were loss making and no longer aligned with our strategic direction. In the current year, the group impaired the historic goodwill in InvestorsHUB, leading to an impairment of GBP978,000 on the income statement. This has been treated as exceptional in nature and has resulted in the goodwill balance being fully impaired.
-- We have reshaped the board structure and related activities, incurring significant legal expenses, amounting to approximately GBP200,000. These costs are due to legal fees, relating to potential claims against some of the previous management with whom settlements were reached.
Reshaping Our Company:
We have restructured the Board of Directors and made comprehensive adjustments within our staff, moving from a traditional corporate structure to a startup mindset focused on growth and innovation. These shifts also meant parting ways with those who did not align with the company's new cultural standards.
Achievements and Ongoing Initiatives:
-- Fundraising: We succeeded in raising GBP6.5m, mainly from our existing shareholders, reflecting an impressive belief in the new management.
-- Expanding our product offering: The launch of real-time option data and option flow product, new and unique editorial content, comprehensive global fundamental data for relevant markets, and the revamp of the InvestorsHub message board.
-- Expanding into Korea, forming a new arrangement with our Brazilian partners and establishing two additional partners in 2024.
-- R&D and Infrastructure: We have made substantial investments in high-capacity, low-latency data processing to improve site stability, laying the groundwork for developing large-scale real-time streaming products.
-- Cost Reductions: We have managed to reduce the overall operational costs by 20% and reduce our headcount, including contractors, from 40 to 31, while onboarding new senior team members.
-- Monetisation and Analytics: We have successfully completed the optimisation of our ad tech operations and effectively streamlined our funnels for user engagement and monetisation. Additionally, we have shifted towards a data-driven decision-making approach, integrating advanced analytics into our operations.
-- App: We plan to release our new app by the end of Q2 2024.
Strategic Focus and Future Vision:
Given the challenging market conditions and stock market volatility, our short-term objective has been to transform into a small and dynamic team. We place a significant emphasis on cost-effectiveness, while prioritising the preservation of our cash reserves for strategic investments. As we reach a point of financial stability and become a more efficient organisation, we will be poised to identify and seize opportunities further to grow our business.
In the first 5 months of the present financial year, improvements are already being seen.
We are pleased to announce that our initial phase of changes and redesign of our product offering will be fully optimised by Q1 2024.
In 2024 we plan to introduce a new product which we believe is going to revolutionise the way our users consume financial information, utilise our existing community and tools in different ways.
As the company's CEO, my foremost objective is to forge a clear vision and strategy for the Company to deliver these changes. I am confident that the trust of our shareholders, combined with the skills and motivation of our team under my leadership, will show much different results in 2024.
Amit Tauman
CEO
20 DECEMBER 2023
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 GBP2,169,000 (2022: a loss of GBP1,368,000). The Directors are not proposing payment of a dividend.
Throughout this fiscal year, we encountered a series of exceptional expenses that impacted on our financial landscape. A considerable portion of our expenses, exceeding GBP200,000, arose from legal fees, particularly following the change in our board of directors and related to potential litigation resolved with former management. Another significant factor contributing to the loss was the impairment of goodwill of GBP978,000 related to InvestorsHub.
Further cash expenditure totalling GBP100,000 was incurred during our fundraising activities. In addition, we have wound down various operations, including the subsidiaries ALLIPO, CupidBay, MJAC, and Fotothing, and our presence in Dubai, all of which incurred one-time costs. While these closures were essential in redirecting our resources and focus on our primary objectives, they are also instrumental in our ongoing process of cost reduction. By adopting new technology, we anticipate further reductions in hosting and IT expenses beginning early 2024. Moreover, our exits and renegotiations with different providers are expected to lead to additional cost savings.
While the spend was high this year, we are moving toward one of our goals and seeing diminishing expenses and constantly reducing operational costs:
-- Operational costs are down on average by 20% YoY. 7,076k vs 8,852k -- Headcount, reduced by 23% YoY from 40 to 31.
ADVFN 2022-2023 financial highlights:
-- Revenue was GBP5.5 million compared to GBP7.8 million in the prior year.
-- Net loss was GBP2.1 million (including GBP314k loss arising from discontinued operations, GBP978k impairment of goodwill and GBP200k of non-recurring legal fees) compared to net loss of GBP1.37 million in the prior year period.
-- Cash and cash equivalents: GBP5.6 million compared to GBP0.9m in the prior year.
The Directors are not proposing payment of a dividend (2022: GBP589k).
Business Review
Navigating through current market conditions remains challenging. Market conditions in 2022/23 dampened retail investors' enthusiasm in the entire financial data sector.
However, the ADVFN team remains patient and focused on crafting a long-term strategy that we firmly believe will significantly enhance our financial standing over the coming years.
The focal point of the 2023/24 year's efforts lies in building our new app and our new product offering while simultaneously growing and cultivating our community and forums, together aiming to position ADVFN as a state-of-the-art one-stop shop for investors.
Summary of key performance indicators
As ADVFN continues to evolve, our approach to Key Performance Indicators (KPIs) reflects a significant shift from previous strategies. In line with our strategic plan for the future, we are focusing on a combination of immediate and long-range objectives that align with our current strategic path. Our operating costs have been reduced by 20% on a year-on-year basis. This concerted effort has paved the way for enhanced fiscal efficiency and positions us well on the trajectory towards our cost-effective goal. This ongoing trend underscores our commitment to fiscal prudence and the prudent allocation of resources. We remain confident that those costs will continue to diminish over H1.
1. Operational Cost Reductions: Our objective is adopting a cost-effective approach, aimed at cutting unnecessary expenses that do not align with our new strategy. This shift is exemplified by our reduced headcount, now at 31 from 40, though headcount is no longer a key metric in isolation.
2. Traffic Growth: We believe that traffic growth should be our foremost KPI. As we approach full optimisation, our primary focus is on the top of the funnel - increasing traffic while maintaining cost effectiveness to support this growth. This strategic emphasis is crucial for driving our next phase of development.
3. Turnover Increase: We anticipate that the increase in traffic, bolstered by our fully established monetisation process, will in turn lead to an increase in turnover. Our focus on attracting and retaining users, coupled with efficient monetisation, lays the foundation for enhanced financial performance.
While specific metrics like headcount and registered users are no longer primary KPIs, they play a supportive role in our broader objectives.
Principal risks and uncertainties
1. Currency Fluctuations : Operating in multiple countries exposes us to the risks associated with fluctuating exchange rates of the Euro, GBP, and the US Dollar. These currency fluctuations can impact on our revenues, expenses, and overall financial stability, making it imperative to employ effective currency risk management strategies. To mitigate these risks, we are reviewing our pricing transfer agreements and primarily maintaining most our revenues in GBP. This approach helps stabilise our financial operations against currency volatility.
2. Interest Rates and Inflation : Rising interest rates and inflation pose challenges to our financial model. Not only can these factors increase our borrowing costs, but they can also affect end-user and provider fees, potentially eroding our profit margins. It is crucial to monitor and adapt to changes in these economic indicators. In response, we have secured long-term contracts with many of our providers, aiming to lock in current rates and mitigate the risks associated with inflation.
3. Ad Networks Industry Volatility : The ad networks industry is witnessing a decline in overall revenue, exemplified by the recent bankruptcy of companies like EMX and MediaMath. This is reflected in the Online Ad Revenue Index, which has dropped by over 30%. These industry-wide challenges necessitate a proactive approach in diversifying our revenue streams and ensuring financial stability. To address these industry-wide challenges, we are diversifying our revenue streams by expanding our product offerings and focusing on increasing subscriptions. This strategy is designed to reduce our dependence on ad revenues and enhance financial stability.
4. Market Uncertainty Impacting Traffic : The unpredictability in global markets directly impacts on our website traffic and user engagement. During times of economic uncertainty and a steady downward trend, users may reduce their online activity or shift their preferences, affecting our platform's performance. Developing resilience and adaptability strategies is essential to mitigate the adverse effects of market fluctuations on our traffic and user engagement. To counteract these effects, we are continually working on converting new traffic and intensively improving our SEO. These efforts are aimed at maintaining and growing our user base despite market fluctuations.
5. Regulatory adherence: In the ever-evolving landscape of digital regulation, we are acutely aware of the increasing complexities and tightening of rules surrounding GDPR and User-Generated Content (UGC) compliance. These regulatory frameworks are critical in shaping how we manage data and interact with our user base. To navigate these changes effectively, we are steadfast in our commitment to staying abreast of new regulations and governance practices. Our approach includes the development of robust compliance guidelines and ongoing consultations with legal experts and industry specialists.
6. Inadequate Disaster Recovery Procedures: Addressing the risks associated with our on-premises data storage, especially in the event of a disaster, is a top priority. Such events pose serious threats to our data integrity and infrastructure. To mitigate these risks, we are transitioning to cloud-based data storage for improved security and redundancy and are updating our infrastructure by replacing old hardware with more robust and reliable systems. This strategy is key to ensuring the protection and stability of our operations under any circumstances.
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 have worked hard during a tumultuous time in the markets .
Directors' statement of responsibilities under section 172 Companies Act 2006
The Director s 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, t he D irectors 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
-- the 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
20 DECEMBER 2023
Hot Features
Premium
Consolidated income statement
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
Revenue 3 5,445 7,848
Cost of sales (316) (374)
-------- ---------
Gross profit 5,129 7,474
Share based payment 21 319 -
Amortisation of intangible assets 12 (191) (256)
Administrative expenses (6,026) (7,176)
Administrative expenses - non-recurring
items 6 (1,178) (1,420)
-------- ---------
Total administrative expenses (7,076) (8,852)
Operating loss 4 (1,947) (1,378)
Finance income 7 24 -
Finance expense 7 (11) (14)
Other income 20 -
Loss before tax (1,914) (1,392)
Taxation 8 58 24
-------- ---------
Loss from continuing operations (1,856) (1,368)
Loss from discontinued operations 3 (313) -
Total loss for the period attributable
to shareholders of the parent (2,169) (1,368)
Loss per share from continuing operations RESTATED
Basic 9 (5.16p) (5.19p)
Diluted 9 (5.16p) (5.19p)
Loss per share from total operations RESTATED
Basic (6.03p) (5.19p)
Diluted (6.03p) (5.19p)
Consolidated statement of comprehensive
income
30 June 30 June
2023 2022
GBP'000 GBP'000
Loss for the year (2,169) (1,368)
Other comprehensive income:
Items that will be reclassified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations 33 73
Total other comprehensive income 33 73
Total comprehensive loss for the year
attributable to shareholders of the parent (2,136) (1,295)
========== ==========
The accompanying accounting policies and notes form an integral part of these financial statements.
Consolidated balance sheet
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 10 160 98
Goodwill 11 - 988
Intangible assets 12 1,003 1,124
Trade and other receivables 15 25 26
1,188 2,236
Current assets
Trade and other receivables 15 466 460
Cash and cash equivalents 5,557 915
-------- --------
6,023 1,375
Total assets 7,211 3,611
Equity and liabilities
Equity
Issued capital 20 92 53
Share premium 6,676 305
Share based payment reserve 22 341
Foreign exchange reserve 316 283
Retained earnings (1,828) 340
-------- --------
5,278 1,322
Non-current liabilities
Borrowing - bank loans 17 20 41
20 41
-------- --------
Current liabilities
Trade and other payables 19 1,903 2,148
Borrowing - bank loans 17 10 13
Borrowing - lease liabilities 17 - 87
1,913 2,248
Total liabilities 1,933 2,289
-------- --------
Total equity and liabilities 7,211 3,611
======== ========
The financial statements on pages 23 to 63 were authorised for issue by the Board of Directors on 20 December 2023 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 2023 2022
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 10 154 24
Intangible assets 12 218 234
Trade and other receivables 15 25 24
Investments 13 - 1,001
---------- ----------
397 1,283
---------- ----------
Current assets
Trade and other receivables 15 313 786
Cash and cash equivalents 5,301 529
---------- ----------
5,614 1,315
---------- ----------
Total assets 6,011 2,598
========== ==========
Equity and liabilities
Equity
Called up share capital 20 92 53
Share premium account 6,676 305
Share based payment reserve 22 341
Retained earnings (2,653) (507)
---------- ----------
4,137 192
---------- ----------
Non-current liabilities
Borrowings - bank loans 17 20 41
Deferred tax 104 104
---------- ----------
124 145
Current liabilities
Trade and other payables 19 1,740 2,248
Borrowings - bank loans 17 10 13
1,750 2,261
---------- ----------
Total liabilities 1,874 2,406
---------- ----------
Total equity and liabilities 6,011 2,598
========== ==========
The financial statements were authorised for issue by the Board of Directors on 20 December 2023 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 GBP2,146,000 (202 2 : loss of GBP2,231,000).
The accompanying accounting policies and notes form an integral part of these financial statements.
Consolidated statement of changes in equity
Share Share Share Foreign Retained Total
capital premium based exchange earnings equity
payment reserve
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 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
Transactions with equity
shareholders:
Issue of shares 39 6,448 - - - 6,487
Cost associated with the
issue of shares - (77) - - - (77)
Issue of options - - 1 - - 1
Lapsed options - - (320) - - (320)
--------- --------- --------- ---------- ---------- --------
39 6,371 (319) - - 6,091
Loss for the year after
tax - - - - (2,168) (2,168)
Other comprehensive income
Exchange differences on
translation of foreign
operations - - - 33 - 33
--------- --------- --------- ---------- ---------- --------
Total other comprehensive
income - - - 33 - 33
--------- --------- --------- ---------- ---------- --------
Total comprehensive income - - - 33 (2,168) (2,135)
--------- --------- --------- ---------- ---------- --------
At 30 June 2023 92 6,676 22 316 (1,828) 5,278
========= ========= ========= ========== ========== ========
The accompanying accounting policies form an integral part of these financial statements.
Company statement of changes in equity
Share Share Share Retained Total
capital premium based earnings equity
payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 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 - - - (2,231) (2,231)
--------- --------- --------- ---------- --------
At 30 June 2022 53 305 341 (507) 192
Transactions with equity shareholders:
Issue of shares 39 6,448 - - 6,487
Cost associated with the issue
of shares - (77) - - (77)
Issue of options - - 1 - 1
Lapsed options - - (320) - (320)
--------- --------- --------- ---------- --------
39 6,371 (319) - 6,091
Profit for the year after tax - - - (2,146) (2,146)
--------- --------- --------- ---------- --------
Total comprehensive income for
the year - - - (2,146) (2,146)
--------- --------- --------- ---------- --------
At 30 June 2023 92 6,676 22 (2,653) 4,137
========= ========= ========= ========== ========
The accompanying accounting policies and notes form an integral part of these financial statements.
Consolidated cash flow statement
12 months 12 months
to to
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
Cash flows from continuing operating
activities
Loss for the year from continuing operations (1,855) (1,368)
Net finance income in the income statement 7 (13) 14
Depreciation of property, plant & equipment 10 75 181
Amortisation of intangible assets 12 191 256
Write off goodwill 11 978 -
Write off intangible assets - 296
Share based payments 21 (319) -
(Increase) / Decrease in trade and other
receivables (20) 170
(Decrease)/increase in trade and other
payables (226) 262
Net cash generated by continuing operations (1,189) (189)
Cashflow from discontinued operating
activities
Loss for the year from discontinued operations (313) -
Amortisation of intangible assets 12 23 -
Write off intangible assets 12 83 -
Decrease in trade and other receivables 14 -
Decrease in trade and other payables (23) -
---------- ----------
Net cash generated by discontinued operations (216) -
Income tax receivable - -
---------- ----------
Net cash generated by operating activities (1,405) (189)
Cash flows from financing activities
Issue of share capital 20 6,410 83
Dividend payments - (589)
Bank interest received 24 -
Repayment of loans 17 (24) (13)
Repay lease liability 17 (91) (103)
Lease interest paid 17 (4) (10)
Other interest paid (1) (4)
Net cash generated by financing activities 6,314 (636)
Cash flows from investing activities
Payments for property, plant and equipment 10 (136) (39)
Purchase of intangibles 12 (175) (114)
Net cash used by investing activities (311) (153)
Net increase in cash and cash equivalents 4,598 (978)
Exchange differences 44 (46)
---------- ----------
Net increase in cash and cash equivalents 4,642 (1,024)
Cash and cash equivalents at the start
of the period 915 1,939
---------- ----------
Cash and cash equivalents at the end of
the period 5,557 915
========== ==========
All financing and investing activities were continuing.
The accompanying accounting policies and notes form an integral part of these financial statements.
Company cash flow statement
12 months 12 months
to to
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
Cash flows from operating activities
Profit / (loss) for the period (2,146) (2,231)
Net finance expense in the income statement 1 1
Depreciation of property, plant & equipment 10 3 72
Amortisation of intangibles 12 191 223
Impairment of investments 1,001 1,275
Share based payments - options/warrants 21 (319) -
(Increase)/decrease in trade and other
receivables 473 7
Decrease/(increase) in trade and other
payables (509) 159
Net cash generated by operating activities (1,305) (494)
Cash flows from financing activities
Issue of share capital 20 6,410 83
Dividend payments - (589)
Repayment of loans 17 (24) (13)
Interest paid (1) (1)
---------- ----------
Net cash generated by financing activities 6,385 (520)
Cash flows from investing activities
Payments for property, plant and equipment 10 (133) (32)
Purchase of intangibles 12 (175) (75)
Net cash used by investing activities (308) (107)
Net increase/(decrease) in cash and cash
equivalents 4,772 (1,121)
Cash and cash equivalents at the start
of the period 529 1,650
---------- ----------
Cash and cash equivalents at the end of
the period 5,301 529
========== ==========
The accompanying accounting policies and notes on 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 2023 ADVFN Plc has provided a guarantee in respect of all liabilities due by its subsidiary companies Cupid Bay Limited (Company No. 04001650), All IPO Plc (Company Number 03230460) 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 2023. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards as at 30 June 2023. The consolidated and company financial statements have been prepared under the historical cost convention and are presented in Sterling rounded to the nearest thousand (GBP'000) except where indicated otherwise.
The subsidiary companies Cupid Bay Limited, All IPO Plc 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 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. At 30 June 2023 the Group's cash balances amounted to GBP5,557,000. The group forecasts are based on nil revenue growth in 2024 and then growth in 2025 of 5% to 10% for advertising and subscription revenue with costs not increasing by more than 5% for the UK and USA business over the two years. The forecasts show that the group and the company have sufficient funding to enable them to carry on as a going concern for the next twelve months from the date of signing the audit report. The Directors are also planning on developing new products that will enhance the growth of the business and will consider further areas for additional cost saving if required. The directors have given due consideration to the two subsidiaries for whom ADVFN Plc has given guarantees under the audit exemption rules and do not consider this will affect the Group's risk position. Accordingly, the Directors have prepared these financial statements on the going concern basis.
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 2023 financial statements
IFRS 17 - Insurance Contracts 1 January 2023
Amendments to IFRS 17 - Insurance Contracts; and Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4 Insurance Contracts) 1 January 2023
Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements) 1 January 2023
Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors) 1 January 2023
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes) 1 January 2023
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) 1 January 2024
The Directors continue to monitor developments in the relevant accounting standards but do not believe that these changes will significantly impact the Group.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Basis of Consolidation
The Group's financial statements consolidate those of the parent company and all of its subsidiaries drawn up to 30 June 2023. 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.
Joint arrangements
The Group has a joint arrangement in Brazil, ADVFN Brasil LTDA for the purpose of operating the ADVFN website in Brazil. ADVFN and Infoadvanced Prestacao De Servicos De Informacoes E Cotacoes Via Internet LTDA (Infoadvanced). each own 50% of ADVFN Brasil. Both ADVFN and Infoadvanced have control over the entity. The agreement is structured as a joint operation as both parties would have the rights to separate income streams and be responsible for the related costs.
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.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
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.
Non-recurring items
Certain administrative costs have been shown separately under the heading of "Administrative expenses - non-recurring items". The Directors consider these items to be unusual, one-off costs that are unlikely to reoccur in subsequent financial years. A breakdown of these costs is shown in note 6.
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 arose on the acquisition of InvestorsHub.com (IHUB). Goodwill is capitalised as an intangible asset and allocated to cash generating units (with separately identifiable cash flows). IHUB is considered to be a single CGU. Goodwill is subject to impairment testing on an annual basis or more frequently if circumstances indicate that the asset may have been impaired, by comparing the carrying value to the recoverable amount, being the higher of the fair value less cost of disposal and the value in use. The value in use has been determined based on management forecasts for the next 5 years, discounted at a rate of 10%. In the current year, the value in use was deemed to be lower than the carrying value and therefore the goodwill has been impaired in full.
- 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. Amortisation commences when the asset is made available for use.
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
Where the group enters into leasing arrangements within the scope of IFRS 16, it recognises right-of-use assets and liabilities as required. Where leases meet the low value or short-term lease exemption, the expense is recognised directly in the income statement.
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' separately on 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, no dividends (2022: GBP589k) 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 receivable 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.
Warrant reserve
The warrant reserve represents equity settled warrants granted as part of the open offer in January 2023 until such warrants 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.
d) The directors have used their judgement in the classification of ADVFN Brasil Ltda as a joint operation, rather than a joint venture, based on the historic treatment by both sides of the revenues and expenses incurred, the substance of the arrangement and the share agreement by both parties of the nature of the operating arrangements.
e) On issuing the warrants related to the rights issue in January 2023, as the warrants were offered to all existing shareholders and therefore, in the directors estimation, these warrants are classified as equity instruments in line with IAS 32.
f) The directors have used their judgement to assess the valuation of the call option agreed on 3 May 2023 to purchase 50% of ADVFN Brasil Ltda within the next 4 years. Management have considered the future performance of the business and have judged that this will remain out of the money for the remainder of its existence and therefore it has no intrinsic value.
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 year, the review of the goodwill led to an impairment of GBP978,000. For the Company, the review led to an impairment of the investments in Group Companies of GBP1,000,000.
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 are 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:
Notes to the financial statements (continued)
Segmental analysis (continued)
2023 Continuing operations Discontinued
Provision Other Total Total
of financial
information
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external
customers 5,445 - 5,445 16 5,461
Depreciation and amortisation (266) - (266) (23) (289)
Other operating expenses (5,666) (282) (5,948) (306) (6,254)
Non-recurring iterms (1,178) - (1,178) - (1,178)
Segment operating loss (1,665) (282) (1,947) (313) (2,260)
Other income 20 - 20 - 20
Interest income 24 - 24 - 24
Interest expense (11) - (11) - (11)
============== ======== ======== ============= ========
Segment assets 6,135 981 7,116 95 7,211
Segment liabilities (1,784) (22) (1,806) (27) (1,833)
Purchases of non-current
assets (311) - (311) - (311)
============== ======== ======== ============= ========
2022 Provision Other Total
of financial
information
GBP'000 GBP'000 GBP'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 3,614
Segment liabilities (2,232) (58) (2,290)
Purchases of non-current assets 155 - 155
============== ======== ========
Revenue recognition per IFRS 15
Point in Over time Total
time
GBP'000 GBP'000 GBP'000
Revenue during 2022 4,183 3,668 7,851
Revenue during 2023 2,384 3,077 5,461
========= ========== ========
Notes to the financial statements (continued)
Segmental analysis (continued)
The Group's revenues from all operations, 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 Revenue Non-current
assets assets
2023 2023 2022 2022
GBP'000 GBP'000 GBP'000 GBP'000
UK (domicile) 2,651 1,184 3,198 1,172
USA 2,659 983 4,525 1,064
Other 151 - 125 -
5,461 2,167 7,848 2,236
======== ============ ======== ============
Revenues are allocated to the country in which the customer resides. During both 2023 and 2022 no single customer accounted for more than 10% of the Group's total revenues.
4. Operating loss
2023 2022
Operating loss has been arrived at after charging: GBP'000 GBP'000
Foreign exchange loss/(gain) 7 (2)
Depreciation and amortisation:
Depreciation of property, plant and equipment: 75 181
Amortisation of intangible assets from continuing
and discontinued operations 214 256
Employee costs (Note 5) 2,837 4,650
Lease payments on land and buildings (Note 22) 91 103
Audit and non-audit services:
Fees payable to the company's auditor for the
audit of the Group's annual accounts 87 45
Remuneration of key senior management for Group and Company
2023 2022
GBP'000 GBP'000
Key senior management comprises only directors
Salary and fees 697 1,502
Compensation for loss of office - 831
Benefits in kind - -
Annual bonus - 80
Share based payments 1 -
Post-employment benefits - defined contribution
pension plans 6 60
704 2,473
======== ========
Highest paid director
Salary and fees 200 381
Compensation for loss of office - 831
Benefits in kind - -
Annual bonus - 25
Share based payments 1 -
Post-employment benefits - defined contribution
pension plans - 24
201 1,261
==== ======
Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report
on page 16.
Notes to the financial statements (continued)
5. Employees
GROUP
2023 2022
GBP'000 GBP'000
Employee costs (including directors):
Wages and salaries 2,581 3,325
Compensation for loss of office - 831
Annual bonus - 80
Social security costs 224 309
Pension costs 31 105
Share based payments 1 -
-------- --------
2,837 4,650
======== ========
The average number of employees during the year
was made up as follows:
Development 4 10
Sales and Administration 27 30
31 40
======== ========
COMPANY
2023 2022
GBP'000 GBP'000
Employee costs (including directors):
Wages and salaries 1,359 2,140
Compensation for loss of office - 831
Social security costs 135 225
Pension 28 103
Share based payments 1 -
-------- --------
1,523 3,299
======== ========
The average monthly number of employees during the year was as follows:
Development 3 4
Sales and Administration 13 15
--- ---
16 19
=== ===
Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report
on page 16.
6. Non-recurring items
GROUP AND COMPANY
2023 2022
GBP'000 GBP'000
Write off goodwill related to IHUB 978 -
Exceptional corporate and shareholder activity - 252
Costs relating to the exit of directors 200 1,114
Early termination costs - 54
1,178 1,420
======== ========
In the year ended 30 June 2022, 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 in this financial year and incurred early termination costs on this lease.
In the current year the goodwill on the investment in IHUB was impaired during the review of the valuation of the investments. There were further legal fees incurred relating to the exit of the previous directors.
Notes to the financial statements (continued)
7. Finance income and expense
GROUP
2023 2022
GBP'000 GBP'000
Finance income:
Bank interest 24 -
Finance expense
Lease interest (4) (10)
Bank interest (7) (4)
======== ========
8. Income tax expense
GROUP
2023 2022
GBP'000 GBP'000
Current Tax:
UK corporation tax on profits for the year (58) (24)
Adjustments in respect of prior periods -
-------- --------
Total current taxation (58) (24)
Deferred tax
Origination and reversal of timing differences 88 84
Carried forward losses (DTA) (88) (84)
Effect of rate change
-------- --------
Taxation (58) (24)
======== ========
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:
2023 2022
GBP'000 GBP'000
Loss before tax from total operations (2,227) (1,782)
Loss before tax multiplied by the respective
standard rate of corporation tax applicable
in the UK (19.00%) (2021: 19.00%) (423) (339)
Effects of:
Non-deductible expenses 178 434
Capital allowances (25) (9)
Carried forward losses utilised against profits - (27)
Enhanced Research & Development expenditure (43) (18)
Surrender of tax losses for R & D tax credit 77 27
Current year R&D tax credit (58) (24)
Effect of discontinued operations 60 -
Effect of difference in tax rates (21) 63
Consolidation adjustments - no tax effect 197 (131)
Tax credit for the year (58) (24)
======== ========
Notes to the financial statements (continued)
9. Loss per share
12 months 12 months
to to
30 June 30 June
2023 2022
GBP'000 GBP'000
Loss for the year attributable to equity shareholders
from continuing operations (1,856) (1,368)
Loss for the year attributable to equity shareholders
from total operations (2,169) (1,368)
Weighted average number of shares
Number of shares in issue prior to rights issue
(prior year: weighted average) 26,315,318 26,184,360
Correction for deemed rights issue 169,179 174,021
Deemed number of shares before rights issue 26,484,497 26,358,381
Weighted average shares
26,484,497 x 188/365 (prior to rights issue) 13,641,330 -
46,004,758 x 177/365 (post rights issue) 22,309,157 -
Total weighted average number of shares 35,950,487 26,358,381
Loss per share for the year attributable to
equity shareholders from continuing operations:
Basic (5.16p) (5.19p)
Diluted (5.16p) (5.19p)
----------- -----------
Total loss per share for the year attributable
to equity shareholders:
Basic (6.03p) (5.19p)
Diluted (6.03p) (5.19p)
Basic and diluted loss per share as previously
stated - (5.22p)
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.
During the current year, the company made a rights issue (Note 20). The prior year earnings per share has been restated to allow for the effect of this rights issue.
Notes to the financial statements (continued)
10. Property, plant and equipment
GROUP
Leasehold Right of
property Computer use lease
improvements equipment Office equipment assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 July 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
Additions 132 4 136
Disposal (349) (349)
FX difference (11) (11)
-------------- ----------- ----------------- ----------- --------
At 30 June 2023 48 567 301 - 916
============== =========== ================= =========== ========
Depreciation
At 1 July 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
Charge for the
year - 2 - 73 75
Disposal - - - (349) (349)
FX difference - - (12) - (12)
-------------- ----------- ----------------- ----------- --------
At 30 June 2023 48 413 295 - 756
============== =========== ================= =========== ========
Net book value
At 30 June
2023 154 6 - 160
At 30 June 2022 - 24 1 73 98
============== =========== ================= =========== ========
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 Computer Office equipment Total
improvements equipment
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 July 2021 48 398 106 552
Additions - 32 - 32
Disposals - - - -
------------------- ----------- ----------------- --------
At 30 June 2022 48 430 106 584
Additions - 133 - 133
At 30 June 2023 48 563 106 717
=================== =========== ================= ========
Depreciation
At 1 July 2021 48 334 106 488
Charge for the year - 72 - 72
At 30 June 2022 48 406 106 560
Charge for the year - 3 - 3
At 30 June 2023 48 409 106 563
=================== =========== ================= ========
Net book value
At 30 June 2023 - 154 - 154
At 30 June 2022 - 24 - 24
=================== =========== ================= ========
11. Goodwill
GROUP
GBP'000
At 1 July 2021 870
Exchange differences 118
At 30 June 2022 988
========
Exchange differences (10)
Impairment (978)
At 30 June 2023 -
========
The goodwill carried in the balance sheet is attributable to InvestorsHub.com Inc.
Impairment testing - InvestorsHub.com Inc .
A discount rate of 10% has been used for impairment testing 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 $1.24/GBP has been used (2022: $1.25/GBP). The value in use calculations indicate that InvestorsHub.com Inc. has a recoverable amount of less than the value of the investment, therefore the goodwill has been impaired.
Notes to the financial statements (continued)
12. Other intangible assets
GROUP
Licences Brands & Website Mobile application Software Crypto-currencies Total
subscriber development
lists costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost or valuation
At 1 July 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
Additions - - 175 - - - 175
Disposals - - - - (220) - (220)
-------- ----------- ----------------- ------------------ -------- ----------------- -------
At 30 June
2023 162 2,129 2,724 10 - 1 5,026
======== =========== ================= ================== ======== ================= =======
Amortisation
At 1 July 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
Charge for
the year - - 191 - 23 - 214
Disposals - - - - (138) (138)
-------- ----------- ----------------- ------------------ -------- ----------------- -------
At 30 June
2023 162 2,129 1,722 10 - - 4,023
======== =========== ================= ================== ======== ================= =======
Net book value
At 30 June
2023 - - 1,002 - - 1 1,003
At 30 June
2022 - - 1,018 - 105 1 1,124
======== =========== ================= ================== ======== ================= =======
Website development costs, mobile applications and software are internally generated assets. There are no components of these that are 'under construction'.
The GBP214k amortisation in the year represents GBP191k of amortisation for continuing operations and GBP23k on software for discontinued operations.
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
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 July 2021 100 10 2,062 - 2,172
Additions - - 74 1 75
Disposals - - - - -
--------- ------------------- -------------------- ------------------ --------
At 30 June 2022 100 10 2,136 1 2,247
Additions - - 175 - 175
Disposals - - - - -
--------- ------------------- -------------------- ------------------ --------
At 30 June 2023 100 10 2,311 1 2,422
========= =================== ==================== ================== ========
Amortisation
At 1 July 2021 100 10 1,680 - 1,790
Charge for the
year - - 223 - 223
Disposals - - - - -
--------- ------------------- -------------------- ------------------ --------
At 30 June 2022 100 10 1,903 - 2,013
Charge for the
year - - 191 - 191
Disposals - - - - -
--------- ------------------- -------------------- ------------------ --------
At 30 June 2023 100 10 2,094 - 2,204
========= =================== ==================== ================== ========
Net book value
At 30 June
2023 - - 217 1 218
At 30 June 2022 - - 233 1 234
--------- ------------------- -------------------- ------------------ --------
Website development costs and mobile applications are internally generated assets. There are no components of these that are 'under construction'.
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)
13. Subsidiary companies consolidated in these accounts
COMPANY
Subsidiaries
GBP'000
At 1 July 2021 2,276
Impairment (1,275)
------------
30 June 2022 1,001
============
Impairment (1,000)
Write offs (1)
30 June 2023 -
============
A discount rate of 10% has been used for impairment testing 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 $1.24/GBP has been used (2022: $1.25/GBP). The value in use calculations indicate that InvestorsHub.com Inc. has a negative headroom compared to an investment by ADVFN of GBP1,000,000. The Company's investment in InvestorsHub.com has therefore been impaired in full. In future years this will be reassessed should indications show that the impairment loss recognised may no longer exist
As part of the strategic realignment of the company, the decision was made to cease trading in Cupid Bay Limited, MJAC InvestorsHub International Conferences Limited and All IPO Plc during the year. These companies, as well as a number of dormant companies noted below are in the process of being liquidated and struck off.
Country of % interest Principal activity Registered address
incorporation in
ordinary
shares
30 June 2022
Cupid Bay Limited England & 100.00 Internet dating Suite 28 Ongar
(Strike off applied Wales web site Business Centre,
for on 22 August The Gables, Ongar,
2023) England, CM5 0GA
England & 100.00 Dormant As Cupid Bay Limited
Fotothing Limited Wales
NA Data Inc. USA 100.00 Office services P.O. Box 780
Harrisonville
Mo. 64701
InvestorsHub.com USA 100.00 Financial information As NA Data Inc.
Inc. web site
ADVFN Brazil Limited England & 100.00 Dormant As Cupid Bay Limited
Wales
E O Management Limited England & 100.00 Dormant As Cupid Bay Limited
(Strike off applied Wales
for on 2 May 2023)
Throgmorton Street England & 100.00 Dormant As Cupid Bay Limited
Capital Limited (Strike Wales
off applied for on
26 May 2023)
Advessel Limited 100.00 Dormant As Cupid Bay Limited
(Strike off applied England &
for on 2 May 2023) Wales
All IPO Plc (Strike England & 100.00 Brokerage and As Cupid Bay Limited
off applied for on Wales software development
4 December 2023)
Writer Pub Limited 100.00 Dormant As Cupid Bay Limited
(Strike off applied England &
for on 2 May 2023) Wales
MJAC InvestorsHub England & 100.00 Dormant As Cupid Bay Limited
International Conferences Wales
Limited (Strike off
applied for on 22
August 2023)
The subsidiary companies All IPO Plc, 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 Website US temporary UK tax Total
assets development differences losses
& software
costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 June 2021 - (303) 303 -
Credit/(charge) to profit
or loss - (84) - 84 -
At 30 June 2022 - (387) - 387 -
Credit/(charge) to profit
or loss (88) 88 -
At 30 June 2023 (475) 475 -
============= ============= ======== ========
Deferred tax in ADVFN Plc amounted to GBP88,600 and nil in subsidiary companies. 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 GBP22,000. 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:
2023 2022
GBP'000 GBP'000
Deferred tax liabilities
* Website development & software costs (88) (84)
-
* US temporary differences
Deferred tax assets
-
* Intangible assets
* UK tax losses 88 84
- -
At the balance sheet date the Group had unused tax losses of GBP5,802,000 (2022: GBP5,340,000) available for offset against future profits. The Group has surrendered losses of GBP403,000 for the R&D tax credit for the year. A deferred tax asset has been recognised in respect of GBP350,000 (2022: GBP338,000) 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 GBP5,452,000 (2022: GBP5,002,000) 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 GBP217,000 and deferred tax liability GBP54,000 and for Computer Equipment, temporary difference GBP134,000 and deferred tax liability GBP34,000.
Notes to the financial statements (continued)
15. Trade and other receivables
GROUP
2023 2022
GBP'000 GBP'000
Non-current assets
Other receivables 25 26
======== ========
Current assets
Trade receivables - gross 257 320
Less: provision for impairment - expected loss (14) (18)
Less: provision for impairment - specific (9) (2)
Trade receivables - net 234 300
Prepayments and accrued income 124 130
Other receivables 26 6
Recoverable corporation tax 82 24
Total trade and other receivables 466 460
The ageing of trade receivables is as follows:
2023 2022
GBP'000 GBP'000
Not past due and not impaired 192 222
Past due but not impaired 56 96
Past due and fully impaired 9 2
-------- --------
Trade receivables - gross 257 320
Not past due and not impaired 192 222
Past due but not impaired:
Up to 30 days 28 -
31 to 60 days 1 12
61 to 90 days 15 30
Over 90 days 12 54
----- -----
56 96
Receivables not impaired 248 318
Past due but fully impaired 9 2
Less impairment provision (23) (20)
----- -----
Trade receivables - net 234 300
===== =====
Provision for impairment:
2023 2022
GBP'000 GBP'000
Opening 20 17
Movement in the year 3 3
-------- --------
Closing 23 20
======== ========
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
2023 2022
GBP'000 GBP'000
Non-current assets
Other receivables 25 24
======== ========
Current assets
Trade receivables - gross 123 175
Less: provision for impairment - expected loss (7) (8)
Less: provision for impairment - specific (9) (2)
Trade receivables - net 107 165
Prepayments and accrued income 102 97
Other receivables 21 -
Recoverable corporation tax 82 24
Amounts owed by Group undertakings - 500
Total trade and other receivables 313 786
The ageing of trade receivables is as follows:
2023 2022
GBP'000 GBP'000
Not past due and not impaired 84 133
Past due but not impaired 30 40
Past due and fully impaired 9 2
-------- --------
Trade receivables - gross 123 175
Not past due and not impaired 84 133
Past due but not impaired:
Up to 30 days 21 -
31 to 60 days - 5
61 to 90 days 7 14
Over 90 days 11 21
----- -----
39 40
Receivables not impaired 114 173
Past due and fully impaired 9 2
Less impairment provision (16) (10)
----- -----
Trade receivables - net 107 165
===== =====
Provision for impairment:
2023 2022
GBP'000 GBP'000
Opening 10 11
Movement in the year 6 (1)
-------- --------
Closing 16 10
======== ========
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
An impairment provision has been calculated on the basis of expected credit losses ("ECL") as required under IFRS 9.
GROUP
As of 30 June 2023, trade receivables of GBP56,000 (2022: GBP96,000) 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 2023 2022
GBP'000 % GBP'000 GBP'000
Not past due 192 1% 2 222
Not more than 3 months 28 5% 2 42
More than 3 months but not more
than 6 months 1 15% - 21
More than 6 months but not more
than 1 year 15 25% 4 24
More than 1 year 12 50% 6 9
248 14 318
======== ==== ======== ========
Impaired receivables allowance account
2023 2022
Specific provision GBP'000 GBP'000
At 1 July 2 7
Utilised during the year (3) (12)
Created during the year 10 7
At 30 June 9 2
======== ========
The carrying amount of the Group's trade receivables is denominated in the following currencies:
2023 2022
GBP'000 GBP'000
Sterling 62 135
Euro 3 1
US dollar 169 164
234 300
======== ========
Notes to the financial statements (continued)
Credit quality of financial assets (continued)
COMPANY
As of 30 June 2023, trade receivables of GBP30,000 (2022: GBP40,000) 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 2023 2022
GBP'000 % GBP'000 GBP'000
Not past due 84 1% 1 133
Not more than 3 months 18 5% 1 19
More than 3 months but not more
than 6 months - 15% - 5
More than 6 months but not more
than 1 year 3 25% 1 13
More than 1 year 9 50% 4 3
114 7 173
======== ==== ======== ========
Impaired receivables allowance account
2023 2022
Specific provision GBP'000 GBP'000
At 1 July 2 5
Utilised during the year (3) (10)
Created during the year 10 7
At 30 June 9 2
======== ========
The carrying amount of the Company's trade receivables is denominated in the following currencies:
2023 2022
GBP'000 GBP'000
Sterling 70 122
Euro 3 1
US dollar 34 42
107 165
======== ========
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 provided an additional layer of protection whilst the economy rides out the effects of the pandemic. 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
2023 2022
GBP'000 GBP'000
Non-current
Bank loans 20 41
20 41
Brought forward 41 141
Cash flows (22) (103)
Interest and fees 1 3
------- -------
As at 30 June 20 41
======= =======
Current
Bank loans 10 13
Lease liability - 87
------- -------
10 100
Brought forward 100 116
Cash flows (94) (25)
Interest and fees 4 9
------- -------
As at 30 June 10 100
======= =======
Notes to the financial statements (continued)
Interest bearing borrowings (continued)
COMPANY
2023 2022
GBP'000 GBP'000
Non-current
Bank loans 20 41
Brought forward 41 54
Cash flows (20) (14)
Interest and fees 1 1
------- -------
As at 30 June 20 41
======= =======
Current
Bank loans 10 13
Brought forward 13 -
Cash flows (4) -
Interest and fees 1 -
------- -------
As at 30 June 10 13
======= =======
Changes in liabilities arising from financing activities
GROUP
Non-cash
2022 Cash movements movements 2023
GBP'000 GBP'000 GBP'000 GBP'000
Long term borrowing 54 (25) 1 30
Lease liabilities 87 (91) 4 -
COMPANY
Non-cash
2022 Cash movements movements 2023
GBP'000 GBP'000 GBP'000 GBP'000
Long term borrowing 54 (25) 1 30
======= ============== ========== =======
Notes to the financial statements (continued)
18. Financial instruments
GROUP
Categories of financial instrument 2023 2022
GBP'000 GBP'000
Non-current
Trade and other receivables - at amortised
cost 25 26
======== ========
Current
Trade and other receivables - at amortised
cost 260 306
Trade and other receivables - non-financial
assets 148 130
-------- --------
408 436
======== ========
Cash and cash equivalents 5,557 915
======== ========
Financial assets 5,817 1,221
======== ========
Non-current
Borrowings 20 41
======== ========
Current
Borrowings 10 100
Trade and other payables - at amortised cost 1,136 1,184
Trade and other payables - non-financial liabilities 767 964
-------- --------
1,903 2,148
======== ========
Financial liabilities 1,146 1,284
======== ========
COMPANY
Categories of financial instrument 2023 2022
GBP'000 GBP'000
Non-current
Trade and other receivables - at amortised
cost 25 24
======== ========
Current
Trade and other receivables - at amortised
cost 107 848
Trade and other receivables - non-financial
assets 111 96
-------- --------
209 944
======== ========
Cash and cash equivalents 5,301 529
======== ========
Financial assets 5,408 1,376
======== ========
Non-current
Borrowings 20 41
======== ========
Current
Borrowings 10 13
Trade and other payables - at amortised cost 1,073 1,411
Trade and other payables - non-financial liabilities 667 837
-------- --------
1,740 2,248
======== ========
Financial liabilities 1,083 1,424
======== ========
Notes to the financial statements (continued)
19. Trade and other payables
GROUP
2023 2022
GBP'000 GBP'000
Trade payables 771 849
Social security and other taxes 119 191
Accrued expenses and deferred income 882 1,074
Other payables 131 34
1,903 2,148
======== ========
COMPANY
2023 2022
GBP'000 GBP'000
Trade payables 758 801
Other tax and social security 112 166
Accruals and deferred
income 761 941
Other payables 109 8
Amounts owed to Group
undertakings - 332
------- -------
1,740 2,248
======= =======
20. Share capital
GROUP AND COMPANY
Shares GBP'000
Issued, called up and fully paid Ordinary
shares of GBP0.002 each
At 30 June 2022 26,315,319 53
Share issued 19,689,439 39
At 30 June 2023 46,004,758 92
=========== ========
Shares issued
On 6 December 2022, the company proposed an equity fundraise whereby qualifying existing shareholders were able to subscribe for new shares at an issue price of GBP0.33 on the basis of 11 offer shares for every 14 existing ordinary shares. Under the issue, open offer warrants were issued to the qualifying shareholders in relation to the purchase of shares on the basis of one warrant for every 3 open offer shares. The warrants may be exercised from the date of issue until 6 December 2026 at a price of GBP0.60 per share. On 6 January 2023 13,708,380 shares were admitted to the London Stock Exchange as a result of this open offer. A further 5,981,059 shares were admitted on 14 March 2023 after FCA approval. A total of GBP6.5m was raised and 6,563,123 warrants were created.
Share price
The market value of the shares at 30 June 202 3 was 21.00p (202 2 ; 51.00p). The range during the year was 20.5p to 57.5p (202 2 ; 49.00p to 87.20p ). 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:
2023 WAEP
Number Price (GBP)
Outstanding at the beginning of the year 1,351,473 0.4437
Granted during the year 530,000 0.33
Exercised during the year - -
Expired during the year (1,251,473) 0.3570
------------ ------------
Outstanding at the year end 630,000 0.3333
============ ============
Exercisable at the year end 630,000 0.3333
============ ============
2022 WAEP
Number Price (GBP)
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
========== ============
Notes to the financial statements (continued)
Share based payments (continued)
The options outstanding at the year-end are set out below:
Expiry date Exercise 2023 2022
Price Share Remaining Share Remaining
(GBP) options life (years) options life (years)
10 year expiry
31 December
2022 0.1400 Options - - 80,000 0.5
31 December
2022 0.1400 Options - - 80,000 0.5
31 December
2022 0.1400 Options - - 120,000 0.5
31 December
2022 0.1400 Options - - 31,473 0.5
12 December
2024 0.1400 Options - - 500,000 2
12 December
2024 0.7950 Options - - 300,000 2
24 November
2027 0.4750 Options 50,000 4 50,000 4
24 November
2027 1.0000 Options 50,000 4 50,000 4
7 year expiry
12 December
2024 0.4375 Options - - 60,000 2
12 December
2024 0.3125 Options - - 80,000 2
3 year expiry
8 June 2026 0.33 Options 530,000 3 - -
630,000 1,351,473 2
========= ==========
The total expense recognised during the year by the Group, for all schemes, was GBP1,000 (2022: GBPNil).
During the year the value of the lapsed options of GBP320,000 was released to the income statement from the share-based payment reserve.
Notes to the financial statements (continued)
22. Lease liabilities
Property, plant and equipment comprises owned and leased assets.
GROUP
2023 2022
GBP'000 GBP'000
Property, plant and equipment - owned - 25
Right-of-use assets except for investment
property - 73
-------- --------
98
Right-of-use assets
The group leases office buildings:
Balance at 1 July 73 171
Additions in the year - -
Depreciation charge for the year (73) (98)
-------- --------
Balance at 30 June - 73
Lease Liability
Maturity analysis - contractual discounted
cash flows
Within one year - 87
Two to five years - -
Over five years - -
-------- --------
Total lease liabilities at 30 June - 87
-------- --------
2023 2022
GBP'000 GBP'000
Lease liabilities per the balance sheet
As at 30 June
Current - 87
Non-current - -
-------- --------
- 87
-------- --------
Amounts recognised in profit or loss
Interest on lease liabilities 5 11
Amounts recognized in the statement of
cashflows
Total cash outflow for leases 103 103
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:
2023 2022
Assets Liabilities Assets Liabilities
GBP'000 GBP'000 GBP'000 GBP'000
US Dollars 3,118 297 1,448 468
Euros 17 120 28 59
Yen 9 - 18 -
Other - - - 11
3,144 417 1,494 538
======== ============ ======== ============
COMPANY
The carrying value of the Company's foreign currency denominated assets and liabilities are set out below:
2023 2022
Assets Liabilities Assets Liabilities
GBP'000 GBP'000 GBP'000 GBP'000
US Dollars 1,683 162 726 199
Euros 18 120 28 59
Yen 6 - 18 -
Other - 22 - 11
1,707 304 772 269
======== ============ ======== ============
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: +/-GBP122,000 (2022: +/-GBP50,000).
Company: +/-GBP165,000 (2022: +/-GBP57,000).
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: GBP 433,000 (2022: GBP1,325,000).
Company: GBP 1,849,000 (2022: GBP1,473,000).
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
2023 Within One to Two to Over five
1 year two years five years years
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 771 - - -
Accruals 236 - - -
Other payables 131 - - -
2022 Within One to Two to Over
1 year two years five years five years
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 849 - - -
Accruals 303 - - -
Other payables 32 - - -
COMPANY
2023 Within One to Two to Over five
1 year two years five years years
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 758 - - -
Accruals 207 - - -
Other payables 109 - - -
2022 Within One to Two to Over
1 year two years five years five years
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 801 - - -
Accruals 272 - - -
Other payables 8 - - -
Amounts owed to Group undertakings 332 - - -
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 GBP6,768,000.
During the year, the Group did not pay a dividend to shareholders (2022: GBP589k). 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 2023 neither the Group nor the Company had any capital commitments (2022: GBPNil).
25. Related party transactions
GROUP
The remuneration paid to Directors is disclosed on page 16 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
The remuneration paid to Directors is disclosed on page 16 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
In September 2023 the Group set up a new subsidiary in Israel as part of the new strategic direction.
Since the balance sheet date, in line with the strategic plans for the business, an application for strike off has been submitted for CupidBay Limited, MJAC InvestorsHub International Conferences Limited and All IPO Plc.
In September 2023, 180,000 share options were granted to vest over a three-year period.
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.
www.companieshouse.gov.uk
and from the ADVFN plc website:
www.ADVFN.com
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