TIDMOBC

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 GBP264,000. 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 
--------------------------------                     ----------------- 
                                            GBP'000            GBP'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) 
--------------------------------                     ----------------- 
 

Clement Chambers

CEO

4 March 2021

Enquiries:

For further information please contact:

 
 
 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 
 
 
 

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 Group was Clem Chambers, Director.

A copy of this announcement is available on the Group's website, at: www.onlineblockchain.io

Consolidated income statement

for the six months ended 31 December 2020

 
                                          Six months   Six months 
                                               ended        ended  Year ended 
                                         31 December  31 December     30 June 
                                                2020         2019        2020 
                                           Unaudited    Unaudited     Audited 
                                             GBP'000      GBP'000     GBP'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) 
                                         ===========  ===========  ========== 
 
 

Consolidated statement of comprehensive income

for the six months ended 31 December 2020

 
                                           Six months   Six months 
                                                ended        ended  Year ended 
                                          31 December  31 December     30 June 
                                                 2020         2019        2020 
                                            Unaudited    Unaudited     Audited 
                                              GBP'000      GBP'000     GBP'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) 
                                          ===========  ===========  ========== 
 
 

Consolidated balance sheet

at 31 December 2020

 
                                            31 December       31 December           30 June 
                                                   2020              2019              2020 
                                              Unaudited         Unaudited           Audited 
                                                GBP'000           GBP'000           GBP'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 
                                       ================  ================  ================ 
 
 
 

Statement of changes in equity

at 31 December 2020

 
                                    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 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 
                                =========  =========  =========  ==========  ==========  ======== 
 

Consolidated cash flow statement

for the six months ended 31 December 2020

 
                                             Six months      Six months 
                                                  ended           ended      Year ended 
                                            31 December     31 December 
                                                   2020            2019    30 June 2020 
                                              Unaudited       Unaudited         Audited 
                                                GBP'000         GBP'000         GBP'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 
                                          =============  ==============  ============== 
 
 

Notes to the interim statements

   1.              Legal status and activities 

Online Blockchain Plc is principally acting as an incubator and developer of businesses in internet and information-based technologies including developers, administrators and custodians of blockchains and cryptocurrencies.

Online Blockchain Plc is a public limited liability company incorporated and domiciled in England and Wales. The address of its registered office is Suite 28, Ongar Business Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.

Online Blockchain Plc is quoted on the Alternative Investment Market ("AIM") of the London Stock Exchange.

   2.             Basis of preparation 

The unaudited consolidated financial information is for the six month period ended 31 December 2020. The financial information does not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2020, which were prepared under IFRS as adopted by the European Union (EU).

The accounting policies adopted in this report are consistent with those of the annual financial statements for the year to 30 June 2020 except as described below.

The financial statements are presented in Sterling (GBP) rounded to the nearest thousand except where specified.

Going concern

The interim financial information has 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 our products continue to build as planned, the Directors believe that trading will gradually improve. This improvement in trading and the resulting increased income over the next 12 months will mean that the current bank balance will stabilize and then increase. In addition, a placing was made in December 2020 resulting in cash subscriptions of GBP362,000 net of commission and other costs.

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 the placing mentioned above, the Group has access to an overdraft facility amounting to GBP50,000 and, if necessary, the option is available to raise further 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.

The interim financial information has not been audited nor has it been reviewed under ISRE 2410 of the Auditing Practices Board. The financial information presented does not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The Group's statutory accounts for the year to 30 June 2020 have been filed with the Registrar of Companies. The auditors, Saffery Champness LLP reported on those accounts and their report was unqualified and did not contain a statement under section 498(2) or Section 498(3) of the Companies Act 2006.

Risks and uncertainties

the Group continuously assesses and monitors the key risks of the business. The risks identified in the financial statements dated 30 June 2020 have not substantially changed.

Notes to the interim statements

   3.             Loss per ordinary share 
 
                                    Six months   Six months       Year to 
                                            to           to 
                                   31 Dec 2020  31 Dec 2019  30 June 2020 
                                       GBP'000      GBP'000       GBP'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) 
                                   ===========  ===========  ============ 
 
 
 

Where a loss is reported for the period 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.

In addition, where a profit has been recorded but the average share price for the period remains under the exercise price of a specific grant of options, the existence of those options is not dilutive.

   4.             Investments in associate undertakings 
 
                                 Six months   Six months     Year 
                                      ended        ended    ended 
                                31 December  31 December  30 June 
                                       2020         2019     2020 
                                    GBP'000      GBP'000  GBP'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 
                                ===========  ===========  ======= 
 

The investment in ADVFN plc is treated for the purposes of financial reporting as an associate due to the common directorships held between ADVFN plc and Online Blockchain plc and the resulting level of significant influence over the associate. It is an investment accounted for using the equity method.

Online Blockchain Plc owns 17.92% (2019: 17.92%) of ADVFN plc which is incorporated in England and Wales and whose principal activity is the development and provision of financial information, primarily via the internet, research services and the development and exploitation of ancillary internet sites.

The carrying value of the associate in the balance sheet of Online Blockchain Plc is GBP1,183,000 and is based on the share of the balance sheet of the associate company.

Notes to the interim statements

   5.            Events after the balance sheet date 

On 2 February 2021 the Company announced a placing of 2,717,391 Ordinary 5.0p shares at a price of 36.8p per share. This resulted in subscriptions of GBP950,000 net of commission and other costs. In addition warrants have been issued to participants in the placing at the rate of 1 warrant for every 2 placing shares.

There are no other events of significance occurring after the balance sheet date to report.

   6.             Dividends 

The directors do not recommend the payment of a dividend.

   7.            Financial statements 

Copies of these accounts are available from Online Blockchain Plc'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 Online Blockchain plc website:

www.onlineblockchain.io

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