REG - Online Blockchain - Final Results
For immediate release
12 November 2018
Online Blockchain Plc
(formerly On-Line Plc)
('Online' or 'the Company')
Audited Results for the Year Ended 30 June 2018
Online today announces audited results for the year ended 30 June 2018.
CEO'S STATEMENT
Earlier in the financial year we changed our name to Online Blockchain to reflect our focus on developing Blockchain projects.
In 2018, the Blockchain bubble burst and the market price for Crypto-assets has fallen back a long way. While this is undoubtably disappointing in the short term, we firmly believe Blockchain technology has a huge future.
The recent market development in crypto-assets is in many ways reminiscent of the internet boom of the late 1990s, and bust in the early 2000s, which some third-party commentators find as a cause for concern, yet today some of those first dotcom companies developing products at that time, such as Amazon, are now the giants of the technology and stock market world of today. As such we feel this is a chance to be at the forefront of a new technological revolution which offers a chance to develop something with exciting potential.
Blockchain development is where our current focus lies and will be for the foreseeable future. We believe that if we can create a "hit product" early-on in the development of the Blockchain industry, then that creates the potential to make a high return. This is of course not a foregone conclusion as our products are at an early stage of commercialisation and other than some very small crypto mining activities, we have not yet earned our first revenue, but we believe that the projects we have in development have the potential in an emerging market that has many growth cycles ahead of it.
We think that eventually Blockchain will be a giant industry and we are building a business to grow into this "once-in-a-generation" opportunity.
Since the beginning of the year we have announced and developed several coins, PlusOne, Brazio, Buenos, Manila and Veggi. These coins form the basis for development of various cryptocurrency projects. We have also developed Happypool, a cloud mining pool which is part of the ecosystem Online Blockchain is building.
PlusOne Coin, Online Blockchain's initial project, is a cryptocurrency that financially rewards social media community activity, and was first launched on ADVFN and IHub (InvestorsHub). PlusOne Coin is a marketing tool rewarding audience retention with coins. PlusOne Coin has helped increase ADVFN advertising revenue and PlusOne Coin's price has risen from a low of 2c a coin in May to 9c a coin in November and is one of the few cryptocurrencies that has seen an uptrend in price over the last 6 months. While still in its early stages, PlusOne Coin has generated Online Blockchain a small amount of fiat income from amounts it has circulated in the market.
Online Blockchain has also built a small mining facility which we primarily consider as a laboratory for research and development. While providing a useful testbed for our projects, our facility has also generated some revenue from mining activities. While these revenues are barely material for now, it is nice to earn revenue as a spin-off from what is essentially an overhead for building-out and supporting our emerging products.
Our coins are currently listed on the following exchanges:
PlusOne: Cryptobridge and Tradesatoshi
Brazio: Southexchange and Bigbitex
Buenos: Southexchange
Veggi: Crex24, Cryptobridge, Southexchange
Manila: Unlisted
The focus on involvement in crypto and blockchain projects has required investment of both money and management time. This has meant an increase in costs which has, this year, resulted in Online Blockchain making a loss. However, we expect that in the foreseeable future, we will see this reversed and look forward to the company being at the centre of a blossoming blockchain industry in the future
The Group's turnover for the year was £56,000 (2017: £98,000) giving a loss before tax of £188,000 (2017: profit of £62,000).
CHANGE OF COMPANY NAME
On 26 October 2017 it was announced that the Board intended to change the name of the Company to Online Blockchain Plc. This was proposed and passed at the Annual General Meeting on 15 December 2017.
CHANGE OF NOMINATED ADVISOR
On 26 October 2017 a new Nominated Advisor was appointed; Beaumont Cornish Limited.
EVENTS AFTER THE BALANCE SHEET DATE
As we announced in August 2018, we have agreed to invest in Encrypted Gaming Inc, a talented development group building games on the Ethereum Blockchain.
More information on this project is available on the company website:
EXTRACT FROM THE ADVFN plc CHIEF EXECUTIVE'S STATEMENT
The financial year 2017/18 was a very interesting and challenging year, one that has seen us add significant upside potential to ADVFN. 2017 was the year of Bitcoin, which saw Cryptocurrency and blockchains explode on to centre stage of the financial markets. While even at the peak around Xmas of 2017 the Cryptocurrency market was a tiny market in comparison with forex and equities markets, it is of huge interest to the global private investor.
This year we took advantage of these opportunities and have positioned ourselves in the US and UK market with a strong cryptocurrency information offering which has since become stronger since the year end.
We have an operating profit of £384,000 (£47,000 in 2017), a solid improvement. Sales are up to £9,201,000 (£8,186,000 in 2017) and this is a strong result in the circumstances.
The timing of the Bitcoin bubble was fortunate as private investor interest in equities has been at an all-time low. It is perverse but our business in equities flourishes best when the market crashes and our customers are hurt by corrections and crashes. In strong markets investor complacency is not good for our business and we rely on the diversified nature of our sales to maintain revenue.
Happily, we were able to sail past these equity doldrums powered by a compensating tailwind of Cryptocurrency information traffic. Cryptocurrency information for the likes of Bitcoin and Ethereum is a new category of financial information and one we are excited about.
We are very bullish about the potential of future demand for Cryptocurrency information and feel this can be a business multiplier for us in the next 3-5 years. As you will see from the figures, we have made the investment in technology and skills to master and provide this information, without the costs materially affecting our bottom line and you can see for yourself the quality of our offering on the ADVFN and Investorshub website. This is the platform from which we are building out our Blockchain information offerings which we believe can be as lucrative as our equity offerings.
Equities and Blockchain have distinct audiences and we find the combination exciting. We believe our market potential just grew significantly and that we can grow to fill it.
EXTRACT FROM THE ADVFN plc STRATEGIC REPORT
Our product, which is our website, can be seen at www.advfn.com. Operating our websites is very technically challenging and is subject to constant maintenance and engineering.
With the advent of the Blockchain and Cryptocurrencies we have now added a new segment to the website to cater for the need of the global cryptocurrency audience for timely and accurate data. We expect this to expand the audience and traffic of our sites.
For our UK audience Brexit will be on most people's agenda over the next year and perhaps several years. We believe this market stressing event could create increased interest in the markets in the UK which is a very important market for us. ADVFN's information sites are important windows onto world markets that private investors around the world use to help manage their investing and trading and we see opportunities for growth in providing these sites.
Turnover has grown substantially in the last year and, as has happened in previous years, the growth in the headcount has been in parallel. This underlines the importance of having the talented staff available in the company when there are opportunities to expand. Our registered users go on increasing and provide us with a ready market for the new products we are able to offer.
SUMMARY OF ADVFN'S KEY PERFORMANCE INDICATORS
2018
2018
2017
2017
Actual
Target
Actual
Target
Turnover
£9.2M
£8.5M
£8.2M
£8.0M
Average head count
46
40
32
35
ADVFN registered users
4.5M
4.2M
4.0M
3.8M
Clement Chambers
CEO
9 November 2018
The annual report and accounts will shortly be sent to shareholders and will be available on the Company's website, www.onlineblockchain.io
Enquiries:
For further information please contact:
Online Blockchain PLC
Clem Chambers
+44 (0) 207 070 0909
Beaumont Cornish Limited (Nominated Adviser)
Roland Cornish/Michael Cornish
+44 (0) 207 628 3396
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 Clem Chambers, Director.
Online Blockchain Plc's STRATEGIC REPORT
The Directors present their Strategic Report for the year ended 30 June 2018.
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 17.98% 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 on page 5 and below, the principal risks facing the business. The directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks identified below. Where possible, processes are in place to monitor and mitigate such risks.
The principal risks and uncertainties around our involvement in crypto-currency are that it remains an unregulated market which means that it will be unpredictable. In addition, the market is not liquid except in the case of the big players such as Bitcoin which means that, for the smaller players, transfer between crypto and fiat currencies may be difficult.
As has been demonstrated in the recent past, the relationship between crypto currencies and fiat currencies has been extremely volatile. It is also uncertain where the current interest in crypto currencies will take the market. It may be that it will become a major industry central to the economies of the world or the interest we currently see may not develop as we had hoped.
Economic downturn
The success of the world's stock markets might affect the business given the sector ADVFN operates in. Many things around the world can affect a stock market from war to human error. As far as the UK is concerned Brexit will be at the forefront of most people's thoughts for the next year at least. This could create market upsets and turmoil. All things that 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 affected in aftermath of Brexit, there is still a lack of confidence and a risk of 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.
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:
2018
2018
2017
2017
Actual
Target
Actual
Target
Turnover (£'000)
56
90
98
90
Operating (loss)/profit (£'000)
(258)
12
20
12
Basic (loss)/earnings per share (pence)
(2.32 p)
0.16 p
0.81 p
0.16 p
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.
STRATEGIC REPORT (continued)
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.
Fund raising
On 10 January 2018 the Company raised £1,000,000 following the placement of 1,000,000 new Ordinary Shares of 5p each at 100p. The proceeds of the placing will be used to provide general working capital for the Company and to provide additional resources to invest further in the development of block-chain projects.
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
We feel that there will be opportunities with the Blockchain and with Crypto currencies and as a result we have made the significant move to add two subsidiaries to our group to enable us to grasp these opportunities to the best effect. This investment has given rise to expenditure in assets (computer equipment) and in management time and our results, in the short term, will reflect this.
It is also right that 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
9 November 2018
Consolidated income statement incorporating the statement of comprehensive income
30 June
30 June
2018
2017
Notes
£'000
£'000
Revenue
56
98
Cost of sales
(2)
-
Gross profit
54
98
Share based payment
(15)
-
Other administrative expenses
(297)
(78)
Total administrative expenses
(312)
(78)
Operating (loss)/profit
(258)
20
Finance income and expense
(1)
(2)
Share of post-tax profits of equity accounted associate
71
44
(Loss)/profit before tax
(188)
62
Taxation
-
-
Total (loss)/profit for the period attributable to shareholders of the parent
(188)
62
(Loss)/profit per share
Basic
1
(2.32 p)
0.81 p
Diluted
1
(2.32 p)
0.81 p
There is no other comprehensive income for either the current or prior year.
Consolidated balance sheet
30 June
30 June
1 July
2018
2017
2016
£'000
£'000
£'000
Assets
Non-current assets
Property, plant and equipment
65
-
-
Other receivables
6
-
-
Investment in associate
1,243
1,174
1,161
1,314
1,174
1,161
Current assets
Trade and other receivables
183
125
159
Cash and cash equivalents
652
2
-
835
127
159
Total assets
2,149
1,301
1,320
Equity and liabilities
Equity
Issued capital
3,292
3,242
3,242
Share premium
3,155
2,205
2,205
Share based payment reserve
51
36
36
Retained earnings
(4,409)
(4,219)
(4,250)
2,089
1,264
1,233
Current liabilities
Trade and other payables
60
37
32
Borrowings (bank overdraft)
-
-
55
60
37
87
Total liabilities
60
37
87
Total equity and liabilities
2,149
1,301
1,320
Consolidated statement of changes in equity
Share capital
Share premium
Share based payment reserve
Retained earnings
Total equity
£'000
£'000
£'000
£'000
£'000
At 1 July 2016
3,242
2,205
36
(4,250)
1,233
Net asset movements of associate
-
-
-
(31)
(31)
Total comprehensive income for the year
-
-
-
62
62
At 30 June 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
Consolidated cash flow statement
12 months to
30 June
12 months to
30 June
2018
2017
£'000
£'000
Cash flows from operating activities
(Loss)/profit for the year
(188)
62
Profit from equity accounted associate
(71)
(44)
Net finance income in the income statement
1
2
Depreciation of property, plant & equipment
5
-
Share based payments - options
15
-
(Increase)/decrease in trade and other receivables
(64)
34
Increase in trade and other payables
23
5
Net cash generated by continuing operations
(279)
59
Income tax receivable
-
-
Net cash generated by operating activities
(279)
59
Cash flows from financing activities
Issue of share capital
1,000
-
Interest paid
(1)
(2)
Net cash generated/(used) by financing activities
999
(2)
Cash flows from investing activities
Payments for property plant and equipment
(70)
-
Net cash used by investing activities
(70)
-
Net increase in cash and cash equivalents
650
57
Cash and cash equivalents at the start of the period
2
(55)
Cash and cash equivalents at the end of the period
652
2
1. Loss per share
12 months to
30 June
12 months to
30 June
2018
2017
£'000
£'000
(Loss)/profit for the year attributable to equity shareholders
(188)
62
Total (loss)/profit per share - basic and diluted
Basic
(2.32 p)
0.81 p
Diluted
(2.32 p)
0.81 p
Shares
Shares
Weighted average number of Ordinary shares in issue for the year
8,130,841
7,662,348
Dilutive effect of options
227,049
-
Weighted average shares for diluted earnings per share
8,357,890
7,662,348
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.
2. Transition to IFRS
This is the first time that the Group has presented its financial information for the three years ended 30 June 2018 under IFRS, issued by the IASB as adopted by the EU. Online Blockchain Plc prepared its last statutory accounts for the year ended 30 June 2017 under FRS 102 (new UK GAAP). The new companies forming the group were incorporated during the current year. For the purposes of these financial statements, the date of transition to IFRS was 1 July 2016 as the year from 1 July 2016 to 30 June 2017 is the earliest period for which the Group has adopted International Financial Reporting Standards (IFRS) in the preparation of its financial statements.
Transitional provisions under IFRS 1
IFRS 1, First-time adoption of International Financial Reporting Standards, allows a number of transitional provisions, primarily exemptions and exceptions, when applying IFRS for the first time. The Group has elected not to utilise any of these exemptions.
IFRS Impact
The transition from reporting under FRS 102 to reporting under IFRS as adopted by the EU resulting from the incorporation of two subsidiaries does not result in any transition adjustments which affect the Group. However, within the Online Blockchain Plc company it has meant that the disclosure of the associate entity ADVFN Plc has moved from a carrying value at cost to being equity accounted. The reconciliation to the disclosures presented previously is as follows:
Reconciliation of equity at transition date 1 July 2016:
2016
UK GAAP
(FRS 102)
Equity accounted
IFRS
associate
£'000
£'000
£'000
Equity
Issued capital
3,242
-
3,242
Share premium
2,205
-
2,205
Share based payment reserve
36
-
36
Retained earnings
(4,543)
293
(4,250)
940
293
1,233
Reconciliation of equity at 30 June 2017
2017
UK GAAP
(FRS 102)
Equity accounted
IFRS
associate
£'000
£'000
£'000
Equity
Issued capital
3,242
3,242
Share premium
2,205
2,205
Share based payment reserve
36
36
Retained earnings
(4,525)
306
(4,219)
958
306
1,264
Reconciliation of total comprehensive income for the year ended 30 June 2017
2017
UK GAAP
(FRS 102)
Equity accounted
IFRS
associate
£'000
£'000
£'000
Revenue
98
-
98
Other administrative expenses
(78)
-
(78)
Operating (loss)/profit
20
-
20
Finance income and expense
(2)
-
(2)
Share of post-tax profits of equity accounted associate
-
44
44
(Loss)/profit before tax
18
44
62
Taxation
-
-
Total loss for the period
18
44
62
3. Events after the balance sheet date
As we announced in August 2018, we have agreed to invest in Encrypted Gaming Inc, a talented development group building games on the Ethereum Blockchain.
More information on this project is available on the company website:
www.onlineblockchain.io
4. 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 2018 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 2018 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.
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.ENDFR BLBFTMBBMBPP
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