Online Blockchain - Half-year Report
25/03/2020 17:00
RNS Number : 6195H
Online Blockchain PLC
25 March 2020
25 March 2020
For immediate release
Online Blockchain PLC
("Online" or the "Group")
Unaudited Interim Results for the Six Months Ended 31 December 2019
Online today announces unaudited interim results for the six months ended 31 December 2019 (the "Period").
CEO's Statement
Since the last report we have made good progress. Of particular note is the continuing development of Freefaucet, which has gone beyond the initial phase of pure development faster than our expectations. Freefaucet lets people claim small amounts of cryptocurrency free or buy cryptocurrency on subscription. Freefaucet is a "freemium" advertising supported model which is now generating small, but useful, amounts of revenue while still being very early stage.
While the Bitcoin price has been volatile during the emerging Coronavirus emergency, this has generally boosted cryptocurrency activity. Our main cryptocurrency blockchains are now established and, while they remain very small, they are building their brands.
Our other products are also developing within the boundaries of our expectations and the Board believes that 2020 is shaping up to be a positive period for OBC. In May, Bitcoin (BTC) is expected to see its next "halvening", the process by which there is a reduction of the reward for successfully mining a block. At present, the reward for mining a block is 12.5 BTC; in May, the reward for successfully adding a block to the blockchain will drop to 6.25 BTC per block. The Directors believe that the Bitcoin "halvening" offers the possibility of increased crytpocurrency activity from which OBC is in a good position to benefit.
Our reaction to the onset of Covid-19 has been to examine the potential impact of the virus on our operations and our market. We need to ensure that the welfare of our staff and the continued provision of our service is our priority. We are already a company of home-based staff and we have looked at reasonable worst-case scenarios and discussed potential mitigating strategies to ensure the continuity of our service. In addition, to maintain liquidity, the Group has access to an overdraft facility amounting to £50,000 and, if necessary, the option is available to raise additional funds on the market or, ultimately, to sell shares in ADVFN Plc.
Our investment in ADVFN Plc remains our largest asset and we show below an extract from the ADVFN Plc interim financial statements:
ADVFN PLC - Chief Executive's Statement
As previously reported, sales during the first half were generally flat, although in the lead up to Brexit, advertising sales volumes were below management's expectations while traffic levels and subscription levels remained unaffected. The impact of this lower than expected advertising demand in the first half can be seen in the reported loss, which is further increased by higher overheads which represented an effort to grow sales during the Autumn of 2019.
The uncertainty created by this change to our revenue from advertising led us to significantly adjust our cost base at the end of the year and in January. As it turns out, with the uncertain and adverse impact of the Covid-19 on markets and general business activity, this pre-emptive action has proved to be fortunate.
Our reaction to the onset of Covid-19 has been to examine the potential impact of the virus on our operations and our market. We need to ensure that the welfare of our staff and the continued provision of our service is our priority. We are currently a company of home-based staff and we have looked at reasonable worst-case scenarios and discussed potential mitigating strategies to ensure the continuity of our service.
The Board believes it has reduced its cost base sufficiently to ride out the current business environment and we are beginning to see the return of advertising revenues. We are also experiencing a growth in subscriptions levels which, if sustained, will over time make up for suppressed advertising levels.
At the moment, our business seems to be performing well and with February a profitable month we are feeling confident that we are able to weather the storm.
One of the results of the disruption to advertising revenues is that the Group's cash levels decreased to £557,000 at the period end, whereas we would have hoped to see them improve. The Directors believe this has now stabilised and we look to benefit from the reductions made to the cost base, reflected in an improvement in performance in the second half, to restore our usual cash levels in the near future.
While it is clear there are many challenges ahead, your Board is committed to seeing the business through these, suddenly, extremely unpredictable times.
ADVFN Plc - Financial performance for the six months ended 31 December 2019
Key financial performance for the period has been summarised as follows:
| Six Months ended | Six Months ended | |
| 31 December 2019 | 31 December 2018 | |
| £'000 | £'000 | |
| Revenue | 3,748 | 4,265 |
| (Loss)/profit for the period | (399) | (214) |
| Operating (loss)/profit | (397) | (210) |
| (Loss)/profit per share | (1.56 p) | (0.84 p) |
| Online Blockchain PLC Clem Chambers | 44 (0) 207 070 0909 | |
| Beaumont Cornish Limited (Nominated Adviser) www.beaumontcornish.com | +44 (0) 207 628 3396 | |
| Roland Cornish/Michael Cornish | ||
| Cassiopeia Ltd (Investor Relations) Stefania Barbaglio | stefania@cassiopeia-ltd.com | |
| Six months ended | Six months ended | Year ended | ||
| 31 December 2019 | 31 December 2018 | 30 June 2019 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Note | ||||
| Revenue | 44 | 26 | 50 | |
| Cost of sales | - | (7) | (150) | |
| 44 | 19 | (100) | ||
| Share based payment | - | (14) | (13) | |
| Other administrative expenses | (116) | (243) | (480) | |
| Total administrative expenses | (116) | (257) | (493) | |
| Operating loss | (72) | (238) | (593) | |
| Finance income and expense | (1) | - | - | |
| Share of post-tax loss of equity accounted associate | (71) | (38) | (73) | |
| Loss before taxation | (144) | (276) | (666) | |
| Taxation | - | - | - | |
| Loss and total comprehensive income for the period attributable to shareholders of the parent | (144) | (276) | (666) | |
| Loss per share | ||||
| Basic loss per ordinary share | 3 | (1.66 p) | (3.19 p) | (7.69 p) |
| Diluted loss per ordinary share | 3 | (1.66 p) | (3.19 p) | (7.69 p) |
| 31 December 2019 | 31 December 2018 | 30 June 2019 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Assets | Note | |||
| Non-current assets | ||||
| Property, plant and equipment | 46 | 56 | 36 | |
| Intangibles | 3 | - | - | |
| Other receivables | 6 | 6 | 6 | |
| Investment in associate | 4 | 1,104 | 1,210 | 1,173 |
| Other equity investments | 36 | 4 | 36 | |
| 1,195 | 1,276 | 1,251 | ||
| Current assets | ||||
| Trade and other receivables | 117 | 214 | 95 | |
| Cash and cash equivalents | 35 | 389 | 154 | |
| 152 | 603 | 249 | ||
| Total assets | 1,347 | 1,879 | 1,500 | |
| Equity and liabilities | ||||
| Equity | ||||
| Issued capital | 3,292 | 3,292 | 3,292 | |
| Share premium | 3,155 | 3,155 | 3,155 | |
| Share based payment reserve | 64 | 66 | 64 | |
| Retained earnings | (5,210) | (4,680) | (5,072) | |
| 1,301 | 1,833 | 1,439 | ||
| Current liabilities | ||||
| Trade and other payables | 46 | 46 | 61 | |
| 46 | 46 | 61 | ||
| Total equity and liabilities | 1,347 | 1,879 | 1,500 | |
| Share capital | Share premium | Share based payment reserve | Retained earnings | Total equity | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 1 July 2018 | 3,292 | 3,155 | 51 | (4,409) | 2,089 |
| Equity settled share options | - | - | 15 | - | 15 |
| Transactions with owners | - | - | 15 | - | 15 |
| Net asset movements of associate | - | - | - | 5 | 5 |
| Total comprehensive loss for the period | - | - | - | (276) | (276) |
| At 31 December 2018 | 3,292 | 3,155 | 66 | (4,680) | 1,833 |
| Equity settled share options | - | - | (2) | - | (2) |
| Transactions with owners | - | - | (2) | - | (2) |
| Net asset movements of associate | - | - | - | (2) | (2) |
| Total comprehensive loss for the period | - | - | - | (390) | (390) |
| At 30 June 2019 | 3,292 | 3,155 | 64 | (5,072) | 1,439 |
| Net asset movements of associate | - | - | - | 6 | 6 |
| Total comprehensive loss for the period | - | - | - | (144) | (144) |
| At 31 December 2019 | 3,292 | 3,155 | 64 | (5,210) | 1,301 |
| Six months ended | Six months ended | Year ended | ||
| 31 December 2019 | 31 December 2018 | 30 June 2019 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Cash flows from operating activities | ||||
| Loss for the period | (144) | (276) | (666) | |
| Add back loss from equity accounted associate | 75 | 38 | 73 | |
| Net finance income in the income statement | - | - | - | |
| Depreciation of property, plant & equipment | 11 | 12 | 24 | |
| Share based payments | - | 15 | 13 | |
| (Increase)/decrease in trade and other receivables | (22) | (31) | 88 | |
| (Decrease)/increase in trade and other payables | (15) | (14) | 1 | |
| Net cash used by operating activities | (95) | (256) | (467) | |
| Income tax receivable | - | - | - | |
| Net cash used by operating activities | (95) | (256) | (467) | |
| Cash flows from financing activities | ||||
| Issue of share capital | - | - | - | |
| Interest paid | - | - | - | |
| Net cash generated/(used) by financing activities | - | - | - | |
| Cash flows from investing activities | ||||
| Investment in equity shares | - | (4) | - | |
| Payments for property plant and equipment | (2921) | (3) | 5 | |
| Payments for intangible assets | (3) | - | - | |
| Financial asset held at fair value through profit and loss | - | - | (36) | |
| Net cash used by investing activities | (24) | (7) | (31) | |
| Decrease in cash and cash equivalents | (119) | (263) | (498) | |
| Cash and cash equivalents at the start of the period | 154 | 652 | 652 | |
| Cash and cash equivalents at the end of the period | 35 | 389 | 154 | |
| Six months ended | Six months ended | Year ended | ||
| 31 December 2019 | 31 December 2018 | 30 June 2018 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Cash at bank | 35 | 389 | 154 | |
| Borrowings (bank overdraft) | - | - | - | |
| 35 | 389 | 154 | ||
| Six months to | Six months to | Year to | |
| 31 Dec 2019 | 31 Dec 2018 | 30 June 2019 | |
| £'000 | £'000 | £'000 | |
| Loss for the period | (144) | (276) | (666) |
| Shares | Shares | Shares | |
| Weighted average number of Ordinary shares | 8,662,348 | 8,662,348 | 8,662,348 |
| Dilutive effect of options | - | - | - |
| Weighted average Ordinary shares for diluted earnings per share | 8,662,348 | 8,662,348 | 8,662,348 |
| Loss per share | |||
| Basic earnings per share | (1.66 p) | (3.19 p) | (7.69 p) |
| Diluted earnings per share | (1.66 p) | (3.19 p) | (7.69 p) |
| Six months ended | Six months ended | Year ended | |
| 31 December 2019 | 31 December 2018 | 30 June 2019 | |
| £'000 | £'000 | £'000 | |
| At historical cost | 868 | 868 | 868 |
| At market value | 874 | 1,175 | 1,267 |
| Percentage ownership | 17.92% | 17.98% | 17.92% |
| Total net assets of ADVFN Plc | 1,319 | 1,902 | 1,702 |
| Percentage ownership interest held by the group | 17.92% | 17.98% | 17.92% |
| Share of net assets of ADVFN Plc | 236 | 342 | 305 |
| Cost of investment in ADVFN Plc | 868 | 868 | 868 |
| 1,104 | 1,210 | 1,173 |