TIDMOMIP
RNS Number : 8863S
One Media iP Group PLC
19 July 2022
19 July 2022
One Media iP Group Plc
("One Media", the "Group" or the "Company")
Interim Results for the six months ended 30 April 2022
Strong first half performance with double digit revenue and
earnings growth
One Media iP (AIM: OMIP), the digital media content provider
which specialises in the active exploitation of music and video
intellectual property rights together with copyright infringement
technology, announces its unaudited interim results for the six
months ending 30 April 2022.
Financial Highlights
-- 13% increase in revenue to GBP2.4m (H1 2021: GBP2.1m), driven
by contribution from new acquisitions, organic growth and active
management of portfolio
-- 39% uplift in EBITDA to GBP1.0m (H1 2021: GBP0.7m),
notwithstanding addition of TCAT overhead expenses
-- 20% uplift in net revenue to GBP1.6m (H1 2021: GBP1.3m)
-- EPS up 24% to 0.19p (H1 2021: 0.15p)
-- Net margin increased to 67% (H1 2021: 63%)
-- Cash balances at 30 April 2022 of GBP2.1m (H1 2021: GBP6.4m)
-- Operative NAV per Ordinary Share of 17p*
-- Final dividend of 0.055p per share distributed in June 2022
Operational Highlights
-- Acquisition of the licensor's share of the royalties to the
Orbital Digital Ltd/Rapier Music catalogue of rights c omprising
over 40 branded record labels and several thousand diversified
recordings with proven revenue streams from artists including Joe
Strummer, Chic, Kool & The Gang, Sid Vicious and the Irish
Tenor Trio
-- TCAT business plan progressing, with software operating
across 178 territories and trials with three major record labels
expected to translate into long term contracts
Outlook
-- Ongoing supportive market backdrop with music industry growth
projections continuing to accelerate and increasing opportunities
to generate royalty income through digital platforms
-- Positive industry developments, including Copyright Royalty
Board ruling in July 2022 increasing headline royalty rate in the
US from 10.5% to 15.1%
Michael Infante, CEO said: "We are very pleased with the results
delivered for the first half of this year, building on the positive
progress we made in 2021. Our core strategic focus on diversified
catalogues of songs that have proven their value over many years
continues to deliver, with our specialist teams helping to maximise
their revenue potential alongside our other investments. Against a
strengthening industry backdrop, our expertise in driving royalty
income from digital recordings and disciplined approach to
acquisitions have enabled us to deliver significant growth that
positions us well for the remainder of the year."
* Operative NAV is calculated by using the IFRS NAV, adjusting
for the revaluation of catalogues assets to fair value and then
adding back the catalogue amortisation.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation. The person who arranged the
release of this information is Michael Infante, Chief Executive
Officer of the Company.
For further information, please contact:
One Media IP Group Plc
Michael Infante Chief Executive
Tel: +44 (0)175 378
5500
Claire Blunt Chairman
Tel: +44 (0)175 378
5501
Cairn Financial Advisers LLP Nominated Adviser
Liam Murray / Jo Turner / Ludovico Tel: +44 (0)20 7213
Lazzaretti 0880
Cenkos Securities plc Broker
Max Gould/Giles Balleny Corporate Tel: +44 (0)20 7397
Finance) 8900
Michael Johnson (Sales)
Claire Turvey, Fourth Pillar Financial PR
Tel: +44 (0)7850 548
198
About One Media iP Group Plc
One Media is a digital music rights acquirer, publisher and
distributor with a catalogue independently valued at GBP34.8
million (as at April 2022). The Group specialises in purchasing and
monetising intellectual property rights with proven, repeat income
streams. One Media adds value to its content by maximising its
availability in over 600 digital stores globally, including Apple
Music, YouTube, Amazon and Spotify.
One Media's music is also widely used for synchronisation in
film and TV whilst its video content is primarily viewed on YouTube
where One Media operates over 20 YouTube channels as a certified
partner. Additionally its copyright infringement and digital music
audit tool software TCAT is used by major record labels and the
world leading digital international distributor. Men & Motors,
the Company's branded car channel, is now available via YouTube
www.youtube.com/channel/UCNLiybn_9jgQaV0NZlSRwCg
One Media is listed on the AIM Market of the London Stock
Exchange under the ticker 'OMIP'.
For further information, please visit www.omip.co.uk and
www.harmonyip.com/
Chairman's Statement
Financial performance
In the first half of 2022, the Company has continued to build on
the momentum created during the prior year enabling the delivery of
another set of positive results from our diversified portfolio of
music and video intellectual property rights, which includes
investments in Take That's 'A Million Love Songs'; Culture Club's
'Karma Chameleon'; as well as music performed by artists such as
Kid Creole and the Coconuts, Joe Strummer, Sex Pistols, Kool &
the Gang and Chic.
Revenues have increased by 13% to GBP2.4 million (H1 2021:
GBP2.1 million), driven by contributions from new acquisitions,
organic growth and active management of portfolio. EBITDA grew by
an impressive 39% to GBP1.0 million (H1 2021: GBP0.7m),
notwithstanding the new inclusion of TCAT overhead expenses in this
period. As a result, Earnings Per Share increased by 24% to
0.19p.
A 20% uplift in net revenue was delivered and net margin was
increased to 67% (H1 2021: 63%) reflecting the relatively low
overall cost base and ongoing efforts of the specialist team to
sweat the portfolio and maximise its income potential. The
Operative NAV per Ordinary Share was 17p.
One Media trades in a global market and is therefore required to
convert its digital income from the many territories' currencies in
which it operates on a monthly basis. All of these local currencies
are converted to US Dollars which are ultimately reported in
Sterling. With approximately 89% of the Company's revenues
generated in US dollars, management carefully monitors exchange
rates to ensure the Company can seek to take advantage of the best
exchange rates available. The average monthly rate for the first
half of 2022 moved to 1.3325 from 1.3678 in the same period last
year.
Following a positive performance in 2021, on 22 April 2022 the
Company declared a final dividend of 0.055p per ordinary share
which was distributed to shareholders in June 2022.
When we released our full year results in April, we also
announced that our content catalogue had been independently valued
at GBP34.8 million, which reflects an implied value of 16.1p per
share and the fair value of the portfolio that has been carefully
assembled over the last 16 years. With the results the Company has
announced today, we are well positioned for the year ahead and
continue to work hard on behalf of our shareholders to maintain our
positive performance and deliver returns.
Operations and investments
During the period the Company acquired the licensor's share of
the royalties to the Orbital Digital Ltd/Rapier Music catalogue of
rights comprising over 40 branded record labels and several
thousand diversified recordings with proven revenue streams from
artists including Joe Strummer, Chic, Kool & The Gang, Sid
Vicious and the Irish Tenor Trio. The investment is fully meeting
performance expectations and brings further diversification and
additional income to our portfolio at a multiple that is in line
with our acquisition strategy.
The transaction was undertaken through One Media's Harmony IP
asset release initiative which enables rights owners to release
portions of equity from their music, providing greater flexibility
to access future earnings while retaining majority ownership of
their intellectual property.
The acquisition opportunity resulted from an existing long-term
relationship that management had with the vendor, reflecting the
importance of the team's long and respected track record in the
music industry, which is built on relationships. It continues to
exploit these carefully held networks and is actively seeking new
opportunities that meet our investment criteria as we look to
deploy our cash into proven income streams.
In August 2020 the Company raised GBP5.6 million of equity (net
of costs), of which GBP5.4 million has been invested into the
acquisition of eight portfolios of rights. These transactions have
been completed at an attractive blended multiple of 9x with an 11%
yield.
Alongside our core focus on royalties, the business plan for the
Company's proprietary anti-privacy software platform investment,
TCAT Ltd ("TCAT") continues to progress in line with expectations.
Established in 2016 to automate the difficult and time-consuming
task of detecting copyright infringement, TCAT operates across the
major digital stores, including Apple, Spotify, Amazon Deezer and
YouTube, and is currently being deployed across 178
territories.
The TCAT team are working with three major record labels
globally with the expectation of entering into long term
contracts.
A full board has been appointed, including CEO Nick Stewart, and
TCAT now employs a team of 10 people plus two consultants. Nick
Stewart is deploying his extensive experience of the global music
market, royalty collection and music piracy to build the profile of
TCAT and its ground-breaking A.I. software, which monitors millions
of music tracks across the world, saving rights holders millions in
unpaid or fraudulently claimed royalties.
The One Media Board together with the newly formed TCAT board
has been active in seeking funding directly into the TCAT
subsidiary. Currently that process is undergoing due diligence and
we will report to the market when it is completed.
Market backdrop and outlook
The outlook for the music industry grows ever stronger, with
technology advancements and positive developments creating a fairer
and more efficient system for all of us who depend on royalty
streams for income.
In June 2022, Goldman Sachs issued its 'Music in the Air' report
into the global music industry, reiterating its confidence that
music streaming will remain resilient in an economic downturn. It
once again raised its global revenue forecasts, projecting a 24%
increase in 2022 revenues across all sectors followed by 8% growth
in 2023, driven by higher streaming revenues, revenues from
emerging platforms and physical sales.
In July 2022, a legal ruling in the US paved the way for an
increase in the headline royalty rate paid from streaming services
in the US from 10.5% to 15.1%, which has been backdated to 2018.
The new rates imposed by the Copyright Royalty Board (CRB) is the
largest rate increase in the history of the CRB.
With the headline rate change, the streaming services are about
to pay out arrears to publishers and songwriters/composers to cover
the now official 15.1% CRB (2022) rate for the five years covered
by the ruling on a prorated basis. The CRB has commenced
negotiations for the next five-year period (2023 to 2027) on behalf
of the composers and publishers and want to see a mechanical
streaming royalty rate of 20%. The Company does not expect this to
be a material payment.
Not only will this ruling have a positive impact on the
Company's revenues, but it sets another welcome marker for the
industry generally, in recognising the value of music and its
creators as well as underlining the robust investment potential of
music composition and publishing rights.
Against this positive backdrop we'd finally like to thank our
shareholders for their ongoing support, and also pay tribute to the
One Media team for their efforts on your behalf.
Claire Blunt
Chairman of One Media
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2022
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended 31 October
30 April 30 April 2021
2022 2021
GBP GBP GBP
Revenue 2,381,784 2,102,848 4,389,581
Distribution charges (526,466) (529,501) (1,107,127)
Royalty costs (232,036) (212,125) (435,386)
Other costs (26,155) (31,436) (66,542)
_________ _________ _________
Net revenue 1,597,127 1,329,786 2,780,526
Amortisation of catalogues (378,251) (256,998) (599,308)
Administration expenses (611,342) (555,026) (1,040,706)
FOREX gains/(losses) 18,134 (35,564) (64,554)
_________ _________ _________
Operating profit 625,668 482,198 1,075,958
Share based payments (30,228) (30,125) (77,178)
Finance costs (90,205) (92,956) (184,045)
Finance income - - 1
_________ _________ _________
Profit from continuing
activities 505,235 359,117 814,736
Asset disposal - - (93,939)
Profit on ordinary
activities before
taxation 505,235 359,117 720,797
Tax expense (90,031) (61,780) (176,222)
_________ _________ _________
Profit for period
attributable to equity
shareholders and total
comprehensive income
for the year 415,204 297,337 544,575
========= ========= =========
Basic earnings per
share 0.19p 0.15p 0.24p
========= ========= =========
Unaudited Consolidated Statement of Financial Position
As at 30 April 2022
Unaudited Unaudited Audited
30 April 30 April 31 October
2022 2021 2021
GBP GBP GBP
Assets
Non-current assets
Intangible assets 14,562,132 9,403,844 13,484,077
Property, plant
and equipment 23,486 86,849 44,007
_________ _________ _________
14,585,618 9,490,693 13,528,084
_________ _________ _________
Current assets
Trade and other
receivables 1,443,787 1,385,946 1,481,077
Cash and cash equivalents 2,138,294 6,373,525 2,565,813
_________ _________ _________
Total current assets 3,582,081 7,759,471 4,046,890
_________ _________ _________
Total assets 18,167,699 17,250,164 17,574,974
========= ========= =========
Liabilities
Current liabilities
Trade and other
payables 1,055,961 821,704 937,622
Deferred tax 137,512 117,356 132,830
_________ _________ _________
1,193,473 939,060 1,070,452
Borrowings 1,769,987 1,724,243 1,745,735
_________ _________ _________
Total liabilities 2,963,460 2,663,303 2,816,187
_________ _________ _________
Equity
Called up share
capital 1,112,231 1,112,231 1,112,231
Share redemption
reserve 239,546 239,546 239,546
Share premium account 9,484,577 9,484,577 9,484,577
Share based payment
reserve 534,627 457,346 504,399
Retained earnings 3,833,258 3,293,161 3,418,054
_________ _________ _________
Total equity 15,204,239 14,586,861 14,758,807
_________ _________ _________
_________ _________ _________
Total equity and
liabilities 18,167,699 17,250,164 17,574,974
========= ========= =========
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 April 2022
Share Share Share Share Retained Total
capital redemption premium based earnings equity
reserve payment
reserve
GBP GBP GBP GBP GBP GBP
At 1 November
2020 1,109,731 239,546 9,473,327 427,221 2,995,824 14,245,649
Proceeds
from the
issue of
new shares 2,500 - 11,250 - - 13,750
Profit for
the six months
to
30 April
2021 - - - - 297,337 297,337
Share based
payment charge - - - 30,125 - 30,125
________ _________ _________ ________ _________ _________
At 30 April
2021 1,112,231 239,546 9,484,577 457,346 3,293,161 14,586,861
Proceeds
from the
issue of
new shares - - - - - -
Dividends
paid - - - - (122,345) (122,345)
Profit for
the six months
to
31 October
2021 - - - - 247,238 247,238
Share based
payment charge - - - 47,053 - 47,053
________ _________ _________ ________ _________ _________
At 31 October
2021 1,112,231 239,546 9,484,577 504,399 3,418,054 14,758,807
Proceeds
from the
issue of
new shares - - - - - -
Profit for
the six months
to
30 April
2021 - - - - 415,204 415,204
Share based
payment charge - - - 30,228 - 30,228
________ _________ _________ ________ _________ _________
Balance at
30 April
2022 1,112,231 239,546 9,484,577 534,627 3,833,258 15,204,239
======== ========= ========= ======== ========= ========
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 April 2022
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 April 30 April 31 October
2022 2021 2021
GBP GBP GBP
Cash flows from operating
activities
Profit before taxation 529,487 386,118 720,798
Amortisation 384,388 240,411 599,169
Depreciation 24,840 7,552 50,509
Share based payments 30,228 30,125 77,178
Finance income - - (1)
Finance costs 90,205 92,455 184,045
(Increase)/decrease in
receivables 3,703 (252,240) (313,783)
(Decrease)/increase in
payables 30,031 (94,780) (69,144)
Corporation tax paid - - (72,063)
_________ _________ _________
Net cash inflow from
operating activities 1,092,882 409,641 1,176,708
_________ _________ _________
Cash flows from investing
activities
Investment in copyrights
/ licenses (1,050,897) (303,733) (4,356,814)
Net TCAT Investment (411,548) (456,362) (842,273)
Investment in fixed assets (4,319) (3,141) (3,257)
Finance income - - 1
_________ _________ _________
Net cash used in investing
activities (1,466,764) (763,236) (5,202,343)
_________ _________ _________
Cash flow from financing
activities
Proceeds from the issue
of new shares - 13,750 13,750
Finance cost paid (53,637) (53,054) (114,873)
Loan notes - - 48,492
Dividend paid - - (122,345)
_________ _________ _________
Net cash inflow from
financing activities (53,637) (39,304) (174,976)
_________ _________ _________
Net change in cash and
cash equivalents (427,519) (392,899) (4,200,611)
Cash at the beginning
of the period 2,565,813 6,766,424 6,766,424
_________ _________ _________
Cash at end of the period 2,138,294 6,373,524 2,565,813
========= ========= =========
Notes to the Interim Report
For the six months ended 30 April 2022
1. Nature of operations and general information
One Media iP Group Plc and its subsidiaries' ("the Group")
principal activities are the acquisition and licensing of
audio-visual intellectual copyrights and publishing for
distribution through the digital medium and to a lesser extent
through traditional media outlets.
One Media iP Group Plc is the Group's ultimate parent company
incorporated under the Companies Act in England and Wales. The
address of One Media iP Group Plc registered office is 623 East
Props Building, Goldfinger Avenue, Pinewood Road, Iver Heath,
Buckinghamshire, SL0 0NH.
The financial information set out in this Interim Report does
not constitute statutory accounts. The Group's statutory financial
statements for the year ended 31 October 2021 are available from
the Group's website. The auditor's report on those financial
statements was unqualified.
2. Accounting Policies
Basis of Preparation
These interim consolidated financial statements are for the six
months ended 30 April 2022. They have been prepared following the
recognition and measurement principles of IFRS. They do not include
all the information required for full annual statements, and should
be read in conjunction with the consolidated financial statements
of the Group for the year ended 31 October 2021.
This unaudited interim statement has not been subject to a
review by the Group's auditors James Cowper Kreston.
Comparatives
The comparative periods represent the unaudited results for the
six months period ended 30 April 2022 and the audited twelve months
figures for the year ended 31 October 2021.
3. Earnings per share
The calculation of the earnings per share is based on the profit
for the financial period divided by the weighted average number of
shares in issue during the period.
Unaudited Unaudited Audited
Basic earnings 6 months ended 6 months ended 12 months
per share 30 April 2022 30 April 2021 ended
31 October
2021
Profit for period
attributable to
equity shareholders 415,204 297,337 544,575
Weighted average
number of shares
in issue at period
end 222,446,249 192,069,005 222,446,249
_________ _________ _________
Basic earnings
per share 0.19p 0.15p 0.24p
========= ========= =========
The diluted earnings per share would be lower than the basic
profit per share as the exercise of warrants and options would be
dilutive.
4. Share capital
Unaudited Unaudited Audited
30 April 30 April 31 October
2022 2021 2021
Group and company GBP GBP GBP
Authorised:
200,000,000 ordinary shares
of 0.5p each 1,000,000 1,000,000 1,000,000
========== ========== ==========
Issued:
Ordinary shares of 0.5p
each
222,446,249 ordinary shares
of 0.5p each 1,112,231 1,112,231 1,112,231
========== ========== ==========
5. Interim statement
Copies of this statement are available from the Group's
registered Office at:
623 East Props Building, Goldfinger Avenue, Pinewood Road, Iver
Heath, Buckinghamshire, SL0 0NH.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identified by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements reflect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
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