Online Blockchain - Half-year Report
04/03/2021 07:00
RNS Number : 0973R
Online Blockchain PLC
04 March 2021
4 March 2021
For immediate release
Online Blockchain PLC
("Online" or the "Group")
Unaudited Interim Results for the Six Months Ended 31 December 2020
Online today announces unaudited interim results for the six months ended 31 December 2020 (the "Period").
CEO's Statement
We are pleased to report that since the last update, the blockchain ecosystem has experienced revitalised interest, driven largely by the recovery and increase in the value of Bitcoin, Ethereum and various other crypto projects and assets.
We were approached at the end of 2020, and again earlier this year, to raise capital to support our development and we took the opportunity to secure sufficient funds to meet our needs over the medium term and provide additional resources to broaden our development efforts. The funding enables us to continue our development and we believe that we have a small group of highly skilled staff capable of delivering innovative work.
In addition to our previously reported projects that continue to make progress, we believe that the Umbria decentralised finance ("DeFi") development is our most promising project. DeFi itself is a disruptive segment of blockchain and there is the potential for OBC and Umbria to make an impact.
We do remain however, cautious with our cash resources as crypto is a volatile asset segment and it is possible at any time that blockchain may be about to enter another cycle of boom, bubble and bust. The potential upside we expect will be delivered in the medium to long term rather in the shorter time frame that so many new entrants and investors in this this field expect. While impossible to accurately predict the short-term outlook for blockchain based assets and businesses, we continue to believe that the blockchain technologies we are working with are part of a development as potentially fundamentally promising as computing in the 1970's and the internet in the 1990s.
There remains, nevertheless, a significant challenge from institutional resistance and scepticism to emerging blockchain technology businesses. At times, it is hard to come to any conclusion other than that blockchain is not yet welcome reflecting the position of established 'gatekeepers' whose commercial position is threatened by blockchain. The disintermediation of gatekeepers is blockchain's great power as it enables efficiencies by digitising business processes and opening up markets to new entrants by removing the need for the extensive overheads that support legacy business. As illustration, neither NYSE or Nasdaq currently enable the exchange of crypto assets and the regulations have not yet permitted the listing of a Bitcoin ETF while, as I write, Coinbase a major crypto exchange, plans to list on Nasdaq at a market valuation which is expected to exceed the combined market value of Intercontinental Exchange Inc (the parent of the NYSE Stock Exchange) and Nasdaq Inc, demonstrating the potential challenge to legacy exchanges' supremacy.
Whilst being wary of these institutional and regulatory challenges, we are hopeful of continuing progress for our existing products in the months ahead and for new developments. We remain excited at the prospects for blockchain, irrespective of the value of bitcoin in 2021, and our plans to develop a potentially major blockchain protocol.
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
These are very uncertain times, but as I have often alluded to, times of uncertainty are good for ADVFN. People become more engaged with their investments when the future looks difficult and the rolling confinements and the new work-from-home environments ("WFH") have provided impetus to our audience's desire to trade and invest. Market volatility has also helped. Counter-intuitively it is not necessarily a bullish period that has helped drive ADVFN revenue, because it turns out that solid profits for investors only fuels complacency and complacency is not good for our sales.
Advertising and subscriptions have been growing and so revenue, which sees us producing a solid bottom-line profit. At the end of 2019 and the beginning of 2020, a sudden and unexpected drop in advertising sales, coupled with a lack of subscription growth, caused us to re-evaluate our processes and reorganise the business from top to bottom.
With great good fortune, we decided to become a fully 'WFH' enterprise with a new, much reduced cost base and re-engineered business processes around the turn of that year. This dramatic change was almost complete when the pandemic started, which by good fortune we were then pre-prepared for.
This intersection of events has meant we have made good progress across 2020 with the end of the first half showing a profit of £264,000. At this stage there seems no end in sight to the disruption of the pandemic and even with an end of the pandemic itself, be it hopefully soon, the global economic aftermath will, we believe, be with us for years to come. We will therefore remain an important destination for those wishing to actively navigate the trying times ahead and we feel a period of investor complacency is not a prospect for the foreseeable future. As such we believe that we will continue to grow for the foreseeable future.
While we expect growth at a similar pace in the coming half, our strategy is to be very conservative and we will expend our energies growing our platform's capacity rather than looking to broaden our audience. We are very optimistic about our near and medium-term prospects, but it seems foolish to contemplate anything but a conservative risk profile to at least the year end.
While we cannot take credit for fate suddenly providing us with a strong hand, we can lay claim to having reshaped ADVFN during the pandemic's disruption into a profitable business that looks set for a strong performance in 2021.
ADVFN Plc - Financial performance for the six months ended 31 December 2020
Key financial performance for the period has been summarised as follows:
| Six Months ended | Six Months ended | |
| 31 December 2020 | 31 December 2019 | |
| £'000 | £'000 | |
| Revenue | 4,233 | 3,748 |
| Profit / (loss) for the period | 264 | (399) |
| Operating profit / (loss) | 277 | (397) |
| Loss per share - basic (see note 3) | 1.03 p | (1.56 p) |
| Online Blockchain PLC Clem Chambers | +44 (0) 20 3868 6702 | |
| Beaumont Cornish Limited (Nominated Adviser) www.beaumontcornish.com | ||
| Roland Cornish/Michael Cornish | +44 (0) 207 628 3396 | |
| Cassiopeia Ltd (Investor Relations) Stefania Barbaglio | stefania@cassiopeia-ltd.com | |
| Six months ended | Six months ended | Year ended | ||
| 31 December 2020 | 31 December 2019 | 30 June 2020 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Note | ||||
| Revenue | 56 | 44 | 109 | |
| Share based payment | (5) | - | - | |
| Other administrative expenses | (173) | (116) | (250) | |
| Total administrative expenses | (178) | (116) | (250) | |
| Operating loss | (122) | (72) | (141) | |
| Finance expense | (1) | (1) | (2) | |
| Impairment of investment in Encryptid Gaming | - | - | (18) | |
| Share of post-tax profit/(loss) of equity accounted associate | 47 | (71) | (40) | |
| Loss before taxation | (76) | (144) | (201) | |
| Taxation | - | - | - | |
| Loss for the period attributable to shareholders of the parent | (76) | (144) | (201) | |
| Loss per share | ||||
| Basic loss per ordinary share | 3 | (0.86 p) | (1.66 p) | (2.32 p) |
| Diluted loss per ordinary share | 3 | (0.86 p) | (1.66 p) | (2.32 p) |
| Six months ended | Six months ended | Year ended | ||
| 31 December 2020 | 31 December 2019 | 30 June 2020 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Loss for the period | (76) | (144) | (201) | |
| Other comprehensive income: | ||||
| Items that will be reclassified subsequently to profit or loss: | ||||
| Exchange differences on translation of foreign operations | (4) | - | 1 | |
| Total other comprehensive income | (4) | - | 1 | |
| Total comprehensive income for the year attributable to shareholders of the parent | (80) | (144) | (200) | |
| 31 December 2020 | 31 December 2019 | 30 June 2020 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Assets | Note | |||
| Non-current assets | ||||
| Property, plant and equipment | 11 | 46 | 30 | |
| Intangibles | - | 3 | - | |
| Other receivables | 6 | 6 | 6 | |
| Investment accounted for using the equity method | 4 | 1,183 | 1,104 | 1,137 |
| Other equity investments | 18 | 36 | 18 | |
| 1,218 | 1,195 | 1,191 | ||
| Current assets | ||||
| Trade and other receivables | 16 | 117 | 114 | |
| Cash and cash equivalents | 384 | 35 | 17 | |
| 400 | 152 | 131 | ||
| Total assets | 1,618 | 1,347 | 1,322 | |
| Equity and liabilities | ||||
| Equity | ||||
| Issued capital | 3,383 | 3,292 | 3,292 | |
| Share premium | 3,464 | 3,155 | 3,155 | |
| Share based payment reserve | 69 | 64 | 64 | |
| Foreign exchange reserve | (3) | - | 1 | |
| Retained earnings | (5,346) | (5,210) | (5,269) | |
| 1,567 | 1,301 | 1,243 | ||
| Current liabilities | ||||
| Borrowings - bank overdraft | - | - | 27 | |
| Borrowings - lease liabilities | 5 | - | 13 | |
| Trade and other payables | 46 | 46 | 39 | |
| 51 | 46 | 79 | ||
| Total equity and liabilities | 1,618 | 1,347 | 1,322 | |
| Share capital | Share premium | Share based payment reserve | Foreign exchange reserve | Retained earnings | Total equity | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 1 July 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 |
| Net asset movements of associate | - | - | - | - | (2) | (2) |
| Loss for the period | - | - | - | - | (57) | (57) |
| Other comprehensive income | ||||||
| Exchange differences on translation of foreign operations | - | - | - | 1 | - | 1 |
| Total other comprehensive income | - | - | - | 1 | - | 1 |
| Total comprehensive loss for the period | - | - | - | 1 | (57) | (56) |
| At 30 June 2020 | 3,292 | 3,155 | 64 | 1 | (5,269) | 1,243 |
| Issue of shares | 91 | 309 | - | - | - | 400 |
| Equity settled share options | - | - | 5 | - | - | 5 |
| Transactions with owners | 91 | 309 | 5 | - | - | 405 |
| Net asset movements of associate | - | - | - | - | (1) | (1) |
| Loss for the period | - | - | - | - | (76) | (76) |
| Other comprehensive income | ||||||
| Exchange differences on translation of foreign operations | - | - | - | (4) | - | (4) |
| Total other comprehensive income | - | - | - | (4) | (76) | (80) |
| Total comprehensive loss for the period | - | - | - | (4) | (76) | (80) |
| At 31 December 2020 | 3,383 | 3,464 | 69 | (3) | (5,346) | 1,567 |
| Six months ended | Six months ended | Year ended | ||
| 31 December 2020 | 31 December 2019 | 30 June 2020 | ||
| Unaudited | Unaudited | Audited | ||
| £'000 | £'000 | £'000 | ||
| Cash flows from operating activities | ||||
| Loss for the period | (76) | (144) | (201) | |
| Add back (profit)/loss from equity accounted associate | (47) | 75 | 40 | |
| Net finance charge in the income statement | 1 | - | 2 | |
| Depreciation of property, plant & equipment | 19 | 11 | 20 | |
| Share based payments | 5 | - | - | |
| Impairment of investment in Encryptid Gaming | - | - | 18 | |
| Decrease/(increase) in trade and other receivables | 98 | (22) | (19) | |
| Increase/(decrease) in trade and other payables | 7 | (15) | (22) | |
| Net cash used by operating activities | 7 | (95) | (162) | |
| Income tax receivable | - | - | - | |
| Net cash used by operating activities | 7 | (95) | (162) | |
| Cash flows from financing activities | ||||
| Draw down bank overdraft | - | - | 27 | |
| Issue equity shares | 400 | - | - | |
| Interest paid | (1) | - | (2) | |
| Net cash generated/(used) by financing activities | 399 | - | 25 | |
| Cash flows from investing activities | ||||
| Overdraft repaid | (27) | - | - | |
| Lease liability repaid | (8) | - | - | |
| Payments for property plant and equipment | - | (21) | (1) | |
| Payments for intangible assets | - | (3) | - | |
| Net cash used by investing activities | (35) | (24) | (1) | |
| Decrease in cash and cash equivalents | 371 | (119) | (138) | |
| Foreign exchange differences | (4) | - | 1 | |
| Cash and cash equivalents at the start of the period | 17 | 154 | 154 | |
| Cash and cash equivalents at the end of the period | 384 | 35 | 17 | |
| Six months to | Six months to | Year to | |
| 31 Dec 2020 | 31 Dec 2019 | 30 June 2020 | |
| £'000 | £'000 | £'000 | |
| Loss for the period | (76) | (144) | (201) |
| Shares | Shares | Shares | |
| Weighted average number of Ordinary shares | 8,800,688 | 8,662,348 | 8,662,348 |
| Dilutive effect of options | - | - | - |
| Weighted average Ordinary shares for diluted earnings per share | 8,800,688 | 8,662,348 | 8,662,348 |
| Loss per share | |||
| Basic earnings per share (pence) | (0.86 p) | (1.66 p) | (2.32 p) |
| Diluted earnings per share (pence) | (0.86 p) | (1.66 p) | (2.32 p) |
| Six months ended | Six months ended | Year ended | |
| 31 December 2020 | 31 December 2019 | 30 June 2020 | |
| £'000 | £'000 | £'000 | |
| Listed investments at cost | 868 | 868 | 868 |
| Listed investments at market value | 875 | 874 | 737 |
| Total net assets of ADVFN Plc | 1,759 | 1,319 | 1,500 |
| Percentage ownership interest held by the group | 17.92% | 17.92% | 17.92% |
| Share of net assets of ADVFN Plc | 315 | 236 | 269 |
| Cost of investment in ADVFN Plc | 868 | 868 | 868 |
| 1,183 | 1,104 | 1,137 |