ADVFN is a web-based provider of equity, crypto and other financial market data for private investors and has been listed on the London Stock Exchange since March 2000. Its strong share price performance in 2021 (up 300% ytd) reflects it being well positioned to benefit from increased market volatility during the COVID-19 pandemic and the rapidly growing market interest in cryptocurrencies. In 2020, ADVFN streamlined its costs and switched permanently to a remote-working model. Management plans to build on this momentum through an enhanced product offering, including increased coverage of crypto assets. ADVFN returned to profit in FY21 and initiated a dividend payment programme.
ADVFN |
Supporting a growing retail investor group
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General financials |
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11 November 2021 |
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ADVFN is a web-based provider of equity, crypto and other financial market data for private investors and has been listed on the London Stock Exchange since March 2000. Its strong share price performance in 2021 (up 300% ytd) reflects it being well positioned to benefit from increased market volatility during the COVID-19 pandemic and the rapidly growing market interest in cryptocurrencies. In 2020, ADVFN streamlined its costs and switched permanently to a remote-working model. Management plans to build on this momentum through an enhanced product offering, including increased coverage of crypto assets. ADVFN returned to profit in FY21 and initiated a dividend payment programme.
Favourable environment helps building volume
ADVFN’s business has recently benefitted from increased price volatility and investor activity during the COVID-19 pandemic, including growing interest in crypto assets. It seems a new, younger generation has entered the market, doubling the number of retail investors in Europe between the beginning of 2020 and mid-2021, according to Reuters (Euronext data). ADVFN’s web-based service and increasing focus on coverage of cryptocurrencies appeals to this significant group of potential clients. The number of registered users expanded to 5.1m at end-June 2021 (from 4.8m a year earlier), slightly exceeding the 5.0m targeted by the management.
Increased sales drive return to profitability
In FY21 (to 30 June), ADVFN reported a £1.6m net profit versus a £0.2m loss in FY20. Revenue increased by over 28% y-o-y to £9.1m, driven by subscription and advertising income. Meanwhile administrative expenses remained compressed at £7.1m (vs £8.8m in FY19 and £7.1 in FY20), due to termination of the headquarters lease agreement (last paid in March 2020) among other cost-saving measures. Although the average headcount in FY21 fell to 38 from 52, personnel costs expanded by c 15%.
Valuation: 2.0% dividend yield on new policy
Expressing confidence in its prospects, management introduced a dividend policy in August 2021 that assumes payments on a semi-annual basis. To smooth the effect of potential earnings fluctuations, ADVFN adopted a cautious approach assuming a dividend cover ratio of not less than 2x net profit attributable to shareholders on a rolling three-year basis. The maiden distribution for the whole FY21 of 1.5p per share (ex-dividend date: 23 December) translates into a moderate 2.0% dividend yield after the robust share price rally of recent months.
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Historical financials
Source: ADVFN accounts. Note: *Diluted. |
EDISON QUICKVIEWS ARE NORMALLY ONE OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Research: Industrials
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