TIDMOBC
RNS Number : 7563U
Online Blockchain PLC
26 November 2019
For immediate release
26 November 2019
Online Blockchain Plc
('Online' or 'the Company')
Audited Results for the Year Ended 30 June 2019
Online today announces preliminary results for the year ended 30
June 2019.
CEO'S STATEMENT
The Blockchain space has been through a turbulent period this
year, but we have continued with our developments while we have
seen Crypto-currencies fall to fractions of their all-time high
prices and then recover to multiples of their post-crash
values.
We see this market volatility as normal for an emerging
technology and once again mirroring previous technology cycles. We
have slightly changed our view on the historic parallels in as much
as we believe the current Crypto-currency market is a lot earlier
in the development cycle than we felt it was in 2017. Rather than
being in a moment analogous to 1998 to 2002, it is starting to seem
likely we are in an earlier stage more like 1990-1994, in a period
that saw the rise of AOL and online services from an obscure niche
to the early adopter phase where the move online was still the
preserve of a very small group within the technology community.
This we believe is potentially an even more exciting prospect
because the subsequent growth in the online-based sector had many
cycles ahead of it at this point and many positive developments
still to emerge.
Crytpo-currency has recovered again because of the power of
Bitcoin as a kind of digital gold, much in demand in Asia where
political events and potential currency depreciations have driven
uptake. Meanwhile Facebook, a company with billions of users, has
announced its own plans for a Crytpo-currency that should add
further momentum and which, while it will be resisted, cannot in
our view be held back.
We are of course minnows, but we believe that we are developing
exciting products that will shortly be tested in the market. So far
Freefaucet.io has proved its potential and has grown in a short
period to have 20,000 registered users rising fast up the website
usage rankings over the last 90 days, its sales are growing and we
expect will soon become material. Meanwhile, Freeloadr is in later
development stages and will soon be ready for the next testing
stages. Other projects under development by Online are also coming
along well and we expect there to be a progression of developments
in the coming periods as products begin their product lives in test
with customers.
Our products continue to trade on various exchanges with Plus1
recently appearing in the Top 100 mineable Cryptocurrencies. This
is a significant rise in the rankings, and we believe Plus1 can
continue to gather further market adoption.
Blockchains and Crypto currencies are the building blocks of a
new breed of software services and this is the key to understanding
the scope of the opportunity. To focus on Crypto currencies is
understandable but it is the opportunity that money brings to
economic activity where the greatest value lies with Crypto
currency and Blockchain.
We continue to invest and now have we believe a developing
portfolio of infrastructure, projects and assets, that we feel will
add significant shareholder value in due course. Shareholders
should note that the Company's own development of Blockchain
products are still at an early stage but we look forward to
reporting further progress over the coming year.
The Company's financial performance for the year and Key
Performance Indicators are analysed in the Strategic Report.
EVENTS AFTER THE BALANCE SHEET DATE
There were no events of significance occurring after the balance
sheet date to report.
INVESTMENT IN ADVFN plc
Online Blockchain Plc also has an interest of approximately 18%
in ADVFN Plc. The activity of ADVFN Plc is therefore of importance
to the Company and some information concerning ADVFN performance is
set out below and has been extracted from ADVFN's audited results
for the year ended 30 June 2019 which were announced last
month:
EXTRACT FROM THE ADVFN plc CHIEF EXECUTIVE'S STATEMENT
"The financial year 2018/19 was a year of development that has
seen us adapt to a changing marketplace and begin to strengthen our
business by pushing forward with our US facing business. Work in
2017 was responsible for addressing negative developments in
equities, replacing revenue from equity-focused clients with
revenues from the growing Blockchain industry. We now have a strong
and comprehensive on-line Crypto information and data offering and
we expect that to lead to a range of opportunities going forward
providing us with additional revenue and a chance to grow the
website with new opportunities.
Thanks to these developments we hope to avoid both the effects
of Brexit but also the European Contracts and Markets Authority
(ESMA) which has had a significant impact on some of our customers
who focus on Contract for Difference (CFD) and spread betting. We
have therefore accelerated our investment in the future to try to
capitalise on the potential of a rebound for these clients
alongside the next phase of the blockchain development which is
recently showing a strong comeback.
Our US offering is now our largest audience and this year we
have spent significant time and money to build on our presence
there. We believe that this investment should start to bear fruit
in 2019 and significantly in 2020. We are very happy with progress
there and the product developments that will also begin to
impact.
Whilst it is hard to predict the future in such an uncertain
political business landscape, 2018/19 has been a significant year
for us in positioning ADVFN to grow. Although, in this year, the
overall market has shrunk, to compensate there is less competition.
We would prefer to be operating in a burgeoning market, but it
certainly helps to be one of the few places where a private
investor or Cryptocurrency trader can get real-time high-quality
information. We are one of a small number of destinations where
financial services companies can get access to a high value
audience for their offerings.
ADVFN and Investorshub has a large audience whose high aggregate
net worth, is at the core of our business and we have been working
hard to broaden our offering to take advantage of it.
At the end of this year we feel we are well positioned to
prosper in an environment many look at with trepidation and we are
looking forward to developments next year which we feel will
deliver a strong performance."
EXTRACT FROM THE ADVFN plc STRATEGIC REPORT
"The website is the centre of ADVFN's business and it can be
seen at www.advfn.com. Our customer's demands on our website means
we must provide sophisticated, technically challenging material
which is subject to constant 24-hour maintenance and engineering.
This is both a significant cost but also a wide defensive moat and
barrier to entry for our business. The cost of provision of our
kind of service has proved prohibitive to many competitors over the
years.
Blockchain and Cryptocurrencies have allowed us to add new
information and create a whole new area to the website dedicated to
the needs of the growing global cryptocurrency audience for timely
and accurate data. This has enhanced the whole ADVFN/Investorshub
proposition.
In the UK our audience remains interested in Brexit and the
impact it may or may not have, which creates much interest in the
financial markets in the UK, which is to our advantage. ADVFN's
data / information sites are a very important window into the
world's financial markets that private investors in any part of the
globe can use to help manage their investing and trading
activities. We see opportunities for growth in many countries
around the world and we support markets in many of them, however,
at this time we are focused on developing audiences in the US, UK
and Brazil."
SUMMARY OF ADVFN'S KEY PERFORMANCE INDICATORS
2019 2019 2018 2018
Actual Target Actual Target
-------- -------- -------- --------
Turnover GBP8.7M GBP8.8M GBP9.2M GBP8.5M
-------- --------
Average head count 46 44 46 40
-------- -------- --------
ADVFN registered users 4.7M 4.6M 4.5M 4.2M
-------- -------- -------- --------
Clement Chambers
CEO
26 November 2019
The annual report and accounts will shortly be sent to
shareholders and will be available on the Company's website,
www.onlineblockchain.io
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. The person who arranged for the
release of this announcement on behalf of the Company was Clement
Chambers, Director.
Enquiries:
For further information please contact:
Online Blockchain PLC
Clement Chambers +44 (0) 207 070 0909
Beaumont Cornish Limited (Nominated Adviser)
www.beaumontcornish.com +44 (0) 207 628 3396
Roland Cornish/Michael Cornish
Smaller Company Capital Limited (Broker)
Jeremy Woodgate +44 (0) 203 651 2910
Cassiopeia Ltd (Investor Relations) stefania@cassiopeia-ltd.com
Stefania Barbaglio
STRATEGIC REPORT FOR ONLINE BLOCKCHAIN PLC
The Directors present their Strategic Report for the year ended
30 June 2019.
The strategy for the Group is that of an incubator and developer
of businesses in internet and information-based technologies
including developers, administrators and custodians of blockchains
and cryptocurrencies.
We created ADVFN www.advfn.com and today we still have a holding
of 17.92% in ADVFN plc.
Online Blockchain plc continues to consider new related
opportunities and particularly crypto currencies and blockchain
opportunities.
Principal risks and uncertainties
The management of the Company and the nature of the Company's
strategy are subject to a number of risks. The directors have set
out below, the principal risks facing the business. The directors
have adopted a thorough risk management process which involves the
formal review of all the risks identified below. Where possible,
processes are in place to monitor and mitigate such risks.
Blockchain and crypto-currency
This remains an unregulated market which means that it will be
unpredictable and is currently extremely volatile. In addition, the
market is not liquid except in the case of the major products such
as Bitcoin and whilst the situation has improved in the last 12
months, for the smaller crypto-currencies, the transfer between
crypto-currency and fiat currencies remains difficult.
There is uncertainty how the current interest in
crypto-currencies may develop in the market. It may be that
crypto-currency will become a major industry central to the
economies of the world or, the potential interest we currently see
may not develop as we had hoped. Likewise, the impact of Blockchain
is difficult to predict, however, in this case there are some
real-world applications which are increasingly attractive; the
global supply chain, in its current state, is conducted via a
fragmented set of business relationships among parties with issues
relating to counter-party trust. This can results in inefficiencies
and errors, and increases the risk for fraud. These problems may
potentially be solvable using blockchain technology.
Economic volatility
The success or failure of the world's stock markets will
probably affect our business given the sector ADVFN operates in.
Many things around the world can affect a stock market from war to
the current trade war between China and the USA. As far as the UK
is concerned Brexit remains at the forefront of most people's
thoughts with the outcome far from clear at the time these accounts
were signed. This could well have the effect of creating market
upsets and turmoil. These are circumstances which, in the past,
have been good for ADVFN as its customers want to know what is
happening in the market.
However, the US Dollar and Euro exchange rates could be further
affected as the Brexit debate continues and until it is settled
there remains an underlying lack of confidence and the potential
for volatility.
High proportion of fixed overheads
A large proportion of the Company's overheads are fixed. There
is the risk that any significant changes in revenue may lead to the
inability to cover such costs. We closely monitor fixed overheads
against budget on a monthly basis and cost saving exercises are
implemented on a constant review basis.
Investment in Encryptid Gaming
We continue to invest in this talented development group
building games on the Ethereum Blockchain as announced in last
year's financial statements.
More information on this project is available in note 11 and on
the company website.
www.onlineblockchain.io
STRATEGIC REPORT FOR ONLINE BLOCKCHAIN PLC (continued)
Performance
The performance of the Company is closely linked to ADVFN plc.
The Company supplies management services and makes advertising
recharges to ADVFN which forms the turnover of the Company. As a
result of this reliance the extract of the ADVFN accounts on page 4
will give necessary information and background on the factors
affecting the performance of the Company. For the future we will
look forward to our investments in Blockchain bearing fruit.
The following financial KPIs may prove helpful:
2019 2019 2018 2018
Actual Target Actual Target
--------- ------- --------- -------
Turnover (GBP'000) 50 90 56 90
------- ---------
Operating (loss)/profit
(GBP'000) (593) 12 (258) 12
--------- ------- ---------
Basic (loss)/earnings
per share (pence) (7.69 p) 0.16 p (2.32 p) 0.16 p
--------- ------- --------- -------
The increase in our loss in the current financial year is the
result of an increased management focus and continuing investment
in the Crypto-currency and Blockchain space.
The financial indicators are designed to offer a dashboard check
of the significant measures of the company's operations. The change
in focus during the current year has meant a short-term downturn in
these Key Performance measures. The company does not currently
monitor non-financial KPI's and will do so when they can offer
additional clarity to the financial performance measures.
Operating costs
Our costs remain reasonably fixed and predictable and we do not
see that changing in the immediate future. They are firmly under
control.
Research and development
We believe in trying to get the best from all areas that we work
in. It is very important that Online Blockchain and ADVFN continue
to invest in the quality and design of our products. We believe
continued investment in our research and development is fundamental
to the continuing growth of the business.
Environmental policy
This has always been important to the Company and as a whole we
continue to look for ways to develop our environmental policy. We
have a very small footprint and try to reduce any waste we create;
we are a small team which makes this task easier. Most of our
communications are electronic which again cuts our use of
non-environmentally friendly products.
Future developments for the business
Last year's investment has given rise to expenditure in assets
(computer equipment) and in management time and our results this
year reflect this. However this is a short term effect and we are
now well placed to make the most of what the new Blockchain and
crypto-currency industries offer.
We continue to work with our investment in ADVFN and assist it
with its growth as well. The prospect of ADVFN continuing to grow
in the medium term provides the incentive to go on concentrating on
this business in the immediate future.
Should other investment opportunities present themselves the
Directors will investigate them appropriately.
Approved and signed on behalf of the Board of Directors
Clement Chambers
CEO
26 November 2019
Consolidated income statement incorporating the statement of
comprehensive income
30 June 30 June
2019 2018
Notes GBP'000 GBP'000
Revenue 50 56
Cost of sales (150) (2)
--------- ---------
Gross (loss)/profit (100) 54
Share based payment (13) (15)
Other administrative expenses (480) (297)
--------- ---------
Total administrative expenses (493) (312)
Operating loss (593) (258)
Finance income and expense - (1)
Share of post-tax (loss)/profit of equity
accounted associate (73) 71
Loss before tax (666) (188)
Taxation - -
--------- ---------
Total loss for the period attributable
to shareholders of the parent (666) (188)
Loss per share
Basic 3 (7.69 p) (2.32 p)
Diluted 3 (7.69 p) (2.32 p)
There is no other comprehensive income for either the current or
prior year.
Consolidated balance sheet
30 June 30 June
2019 2018
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 36 65
Other receivables 6 6
Investment in associate 1,173 1,243
Financial asset held at fair value through 36 -
profit and loss
1,251 1,314
Current assets
Trade and other receivables 95 183
Cash and cash equivalents 154 652
-------- --------
249 835
Total assets 1,500 2,149
Equity and liabilities
Equity
Issued capital 3,292 3,292
Share premium 3,155 3,155
Share based payment reserve 64 51
Retained earnings (5,072) (4,409)
-------- --------
1,439 2,089
Current liabilities
Trade and other payables 61 60
Total liabilities 61 60
Total equity and liabilities 1,500 2,149
======== ========
Consolidated 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 2017 3,242 2,205 36 (4,219) 1,264
Share based payment - - 15 - 15
Issue of shares 50 950 - - 1,000
--------- --------- --------- ---------- ----------
Transactions with shareholders 50 950 15 - 1,015
Net asset movements of associate - - - (2) (2)
Total comprehensive income for
the year - - - (188) (188)
--------- --------- --------- ---------- ----------
At 30 June 2018 3,292 3,155 51 (4,409) 2,089
Share based payment - - 13 - 13
Transactions with shareholders - - 13 - 13
Net asset movements of associate - - - 3 3
Total comprehensive income for
the year - - - (666) (666)
--------- --------- --------- ---------- ----------
At 30 June 2019 3,292 3,155 64 (5,072) 1,439
========= ========= ========= ========== ==========
Consolidated cash flow statement
12 months 12 months
to to
30 June 30 June
2019 2018
GBP'000 GBP'000
Cash flows from operating activities
Loss for the year (666) (188)
Loss/(profit) from equity accounted associate 73 (71)
Net finance income in the income statement - 1
Depreciation of property, plant & equipment 24 5
Share based payments - options 13 15
Decrease/(increase) in trade and other
receivables 88 (64)
Increase in trade and other payables 1 23
Net cash used by continuing operations (467) (279)
Income tax receivable - -
---------- ----------
Net cash used by operating activities (467) (279)
Cash flows from financing activities
Issue of share capital - 1,000
Interest paid - (1)
Net cash generated by financing activities - 999
Cash flows from investing activities
Financial asset held at fair value through (36) -
profit and loss
Payments for property plant and equipment 5* (70)
Net cash used by investing activities (31) (70)
Net (decrease)/increase in cash and cash
equivalents (498) 650
Cash and cash equivalents at the start
of the period 652 2
---------- ----------
Cash and cash equivalents at the end of
the period 154 652
========== ==========
*reversal of entry of 9 from previous period, payment for
property, plant and equipment (4)
1. Basis of preparation
The consolidated and company financial statements are for the
year ended 30 June 2019. They have been prepared in compliance with
International Financial Reporting Standards (IFRSs) and IFRS
Interpretations Committee (IFRIC) interpretations as adopted by the
European Union as at 30 June 2019. The consolidated and company
financial statements have been prepared under the historical cost
convention and are presented in Sterling rounded to the nearest
thousand except where indicated otherwise.
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 as the new Faucet products launched since the
year end gather momentum and the current products continue to build
as planned, the Directors believe that trading will gradually
improve over the next 12 months. This improvement in trading and
the resulting increased income over the next 12 to 18 months will
mean that the current bank balance will stabilize and then
increase. In addition, to maintain liquidity, the Group has access
to an overdraft facility amounting to GBP50,000 and if necessary
the option is available to raise additional funds on the market or,
ultimately, to sell shares in ADVFN Plc. Accordingly, the Directors
have prepared these financial statements on the going concern
basis.
Standards and amendments to existing standards adopted in these
accounts
IFRS 15: Revenue from contracts with customers - the standard
establishes the principles that an entity will report useful
information to users of financial statements about the nature,
amount, timing and uncertainty of revenue and cash flows arising
from a contract with a customer. The Group adopted the standard on
1 July 2018 and have applied the 5 step approach in these financial
statements. The Company and Group invoiced recharges for management
services amounting to GBP50,000 (2018: GBP50,000) on a monthly
basis to the associate and which is a service delivered over a
period. However, there are no external sales and no revenue from
external customers. The revenue from crypto mining activity does
not involve a customer and therefore does not fall within the scope
of the standard. The revenue is recognised as the payment for
mining is made. The new standard will not impact the group.
IFRS 9: Financial instruments - The standard was adopted on 1
July 2019 and is a replacement for IAS 39 'Financial Instruments'.
The Company and Group's financial assets consist of receivables and
the liabilities consist of payables. There are no material
borrowings. Under the provisions of the standard the treatment of
any doubtful receivables will change to reflect an expected credit
loss rather than an incurred credit loss. The Group currently has
no trade receivables. Classification of financial assets and
liabilities will change under the new standard however, the result
will not impact the income statement. Changes to rules covering
hedge accounting will not apply as the Group does not use hedge
accounting.
The standards and amendments adopted in these accounts had no
material effect on the financial statements.
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 2019 financial statements
IFRS 16: Leases - this standard establishes the principles for
the recognition, measurement, presentation and disclosure of leases
with the objective of ensuring that lessees and lessors provide
relevant information that faithfully represents those transactions.
Effective for the period beginning on 1 July 2019. The Company and
Group has rented premises subject to a lease agreement which ends
on 14 April 2021. If the lease were reported at the current year
end the right of use asset would amount to GBP30,000. Should the
current lease not be renewed, the Group will take advantage of the
short-term lease exemption when the lease is reported at the year
end 30 June 2020. Based on the current situation the standard will
not impact the Group.
The Directors continue to monitor the impact of future changes
to the reporting requirements but do not believe the proposed
changes will significantly impact the financial statements.
2. 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 two reportable operating segments, being that of
the mining of crypto-currency and the provision of management
services. The two newly incorporated subsidiary companies are
currently operating at a very low level and their revenues,
expenses, assets and liabilities are considered to be immaterial.
Segment information can be analysed as follows for the reporting
period under review:
2019 Provision Mining Total
of management crypto
services currency
GBP'000 GBP'000 GBP'000
Revenue from related party 44 - 44
Revenue from mining - 6 6
Depreciation and amortisation - (24) (24)
Other operating expenses (423) (196) (619)
--------------- ---------- --------
Segment operating loss (379) (214) (593)
Interest income - - -
Interest expense - - -
=============== ========== ========
Segment assets 1,453 47 1,500
Segment liabilities (50) (11) (61)
Purchases of non-current assets - 4 4
=============== ========== ========
2018 Provision Mining Total
of management crypto
services currency
GBP'000 GBP'000 GBP'000
Revenue from related party 52 - 52
Revenue from mining - 4 4
Depreciation and amortisation - (5) (5)
Other operating expenses (307) (2) (309)
--------------- ---------- --------
Segment operating loss (255) (3) (258)
Interest income - - -
Interest expense 1 - 1
=============== ========== ========
Segment assets 2,073 76 2,149
Segment liabilities (60) - (60)
Purchases of non-current assets - 70 70
=============== ========== ========
During both 2019 and 2018 a related party accounted for more
than 10% of the Group's total revenues.
3. Loss per share
12 months 12 months
to to
30 June 30 June
2019 2018
GBP'000 GBP'000
Loss for the year attributable to equity shareholders (666) (188)
Total loss per share - basic and diluted
Basic (7.69 p) (2.32 p)
Diluted (7.69 p) (2.32 p)
Shares Shares
Weighted average number of Ordinary shares in
issue for the year 8,662,348 8,130,841
Dilutive effect of options - 227,049
---------- ----------
Weighted average shares for diluted earnings
per share 8,662,348 8,357,890
========== ==========
Where a loss has been recorded for the year the diluted loss per
share does not differ from the basic loss per share as the exercise
of share options would have the effect of reducing the loss per
share and is therefore not dilutive under the terms of IAS 33.
Where a profit has been recorded but the average share price for
the year remains under the exercise price the existence of options
is likewise not dilutive.
4. Events after the balance sheet date
There were no significant events to report after the balance
sheet date.
5. Publication of Non-Statutory Accounts
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
section 435 of the Companies Act 2006.
The balance sheet at 30 June 2019 and the income statement,
statement of changes in equity, the statement of cashflows and
associated notes for the year then ended have been extracted from
the Company's 2019 statutory financial statements upon which the
auditors' opinion is unqualified and does not include any statement
under Section 498(2) or (3) of the Companies Act 2006.
ENDS
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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