REG - One Media iP Group - Annual Financial Report
29/03/2023 07:00
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RNS Number : 5331U One Media iP Group PLC 29 March 2023
29 March 2023
One Media iP Group Plc
("One Media", "the Company" or the "Group")
Audited results for the year ended 31 October 2022
Music rights continuing to deliver double digit growth
driven by active management of copyrights and supportive industry backdrop
One Media (AIM: OMIP), the digital media content owner and manager which
specialises in the active monetisation of music and video intellectual
property rights, together with copyright protection technology, announces its
audited results for the year ended 31 October 2022.
Financial highlights
· 17% increase in total revenue and 9% uplift in EBITDA to £5.1
million (2021: £4.4 million) and £1.8 million (2021: £1.6 million)
respectively, driven by acquisition, organic growth and active management of
the portfolio in line with strategy to maximise income from rights under
ownership
· Organic revenue growth in the year of 7% reflecting both the
active management and the strength of underlying catalogue resulting from an
investment strategy focused on evergreen music with lasting appeal
· Compound average annual organic revenue growth of 15% over the
last five years, reflecting the strong fundamentals of the Group's catalogue
before its rights management expertise is applied to unlock latent income
potential
· 20% uplift in net revenue (net of distribution charges, royalty
and other costs) to £3.3 million (2021: £2.8 million)
· Operating profit of £0.9 million (2021: £1.1 million) and EPS
of 0.20p (2021: 0.24p), reflecting the Group level investment into TCAT in
addition to costs relating to the refinancing completed with Coutts & Co.
· Invested £1.7 million, including £1.2 million into new
acquisitions identified as fitting the Company's appetite for proven,
recurring income streams that have the potential to be further cultivated
· Refinancing of £1.9 million of unsecured loan notes with a
Coutts & Co. facility with more traditional lending terms and enabling
greater operational flexibility
· Healthy cash balance of £2.2 million (2021: £2.6 million)
providing flexibility for strategic investment
· IFRS NAV per Ordinary Share unchanged at 7p (2021: 7p)
· Operative NAV per Ordinary Share of 18p (⑴)
· Final dividend declared of 0.055p per share
Operational and post period highlights
· Ongoing successful active management of catalogue of c. 240,000
recordings, including high profile synchronisation ("sync") placements,
including on Netflix series Bridgerton and the Hulu/Disney+ series 'Only
Murders in the Building', contributing to increased revenue performance
· £1.2 million of investment into new rights at a blended multiple
of below 11 times, including the licensing rights to a diversified music
income rights catalogue featuring José Carreras, Jo Jo Adams, Irish Tenor
Trio, Alexander O'Neal, Sid Vicious, Lee Perry, The Lambrettas, Suketu, Col
Abram, Psy-Co-Billy, Rachel Porter's all female Orchestra
· Strategic decision taken to continue to invest into anti-piracy
software subsidiary TCAT to benefit from medium term value creation potential
· TCAT business plan advanced with appointment of CEO Nick Stewart
and investment into new skillsets
Board changes
· Board further strengthened in October with the appointment of
Mark Adams as an Independent Non-Executive Director
Positive market outlook, notwithstanding macroeconomic headwinds
· Outlook for the music industry continues to be positive, with
Goldman Sachs raising 2022 and 2023 global music forecasts and predicting 12%
CAGR 2021-2023
· Emerging opportunities, including in new territories and with new
technology advances, providing increasing opportunities to license music and
grow royalties
· The current year's trading has started in line with our
expectations. The Group is well positioned for the year ahead and we
continue to work hard on behalf of our shareholders to maintain our positive
performance and to deliver secure and growing returns
⑴ 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
Michael Infante, CEO said: "The Group has delivered another positive
performance in 2022, with the results testament to the underlying strength of
our incredible catalogue and the care and expertise of the One Media team, who
are stewards of the music we own. With the opportunities to grow the royalties
from our existing music catalogue increasing internationally, these will be
our ongoing focus for 2023. Alongside this, following the strategic decision
taken to prioritise capital allocation to TCAT, given the potential this
proprietary software has in meeting the expanding requirement for digital
copyright infringement detection tools, we will look to escalate its
operations and grow the business.
"Our dividend has been maintained and, with a strong balance sheet
underpinning the Group as well as a supportive outlook for the music industry,
we are well placed for 2023 and to continue to deliver positively on behalf of
our shareholders."
This announcement contains inside information for the purposes of 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 5500
Cairn Financial Advisers LLP Nominated Adviser
Liam Murray / Jo Turner / Ludovico Lazzaretti Tel: +44 (0)20 7213 0880
Cenkos Securities plc Broker
Max Gould / Giles Balleny, (Corporate Finance) Tel: +44 (0)20 7397 8900
Michael Johnson (Sales)
Claire Turvey, Fourth Pillar Financial PR
claire@thefourthpillar.co.uk 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
diversified catalogue of over 240,000 music tracks independently valued at
£34.8 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 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
(https://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 (http://www.omip.co.uk)
and www.harmonyip.com/ (http://www.harmonyip.com/)
Chairman's Statement
Once again, we are reporting another positive set of results, driven by the
Group's focus and long track record in increasing income from digital
copyrights, while at the same time growing their capital value. The team's
specialist expertise in this sector has helped deliver a 17% increase in total
revenue to £5.1 million (2021: £4.4 million) and a 9% uplift in EBITDA to
£1.8 million (2021: £1.6 million).
These results, underpinned by a positive industry backdrop, have given the
Board the confidence to declare an annual dividend of 0.055p per share,
subject to shareholder approval at the Company's forthcoming Annual General
Meeting.
With the core business continuing to perform positively and in line with
expectations, during 2022 the Group spent time strategically evaluating the
investment into its proprietary anti-piracy software, TCAT (Technical
Copyright Analysis Tool). TCAT is delivering an important and much needed
service to music rights holders (including One Media) and to the creative
community by providing protection from and detection of copyright infringement
and loss of due income through the illegal activities of others. During the
period, TCAT signed additional industry contracts and trials for its
proprietary software and it continues to gain traction internationally with
both major and independent labels.
As set out in the Group's half year results on 19 July 2022, the Board,
together with the newly formed TCAT board, had been exploring independent
funding options for TCAT. However, as we communicated in the Group's trading
update on 6 January 2023, the Board subsequently undertook a further
assessment of the strategic position of the TCAT business, in conjunction with
the Group's advisers and alongside consultation with major shareholders. This
included a consideration of both the external and internal funding options
available, given the strength of the Group's balance sheet. As a result of
this process and consultation, the Board concluded that, in its opinion,
greater value can be captured by retaining TCAT within the Group and
supporting TCAT in reaching its next level of growth.
The Board continues to believe that, against the positive industry growth
trajectory, the TCAT business presents a significant, scalable opportunity
with exciting potential. The Group will therefore continue to use its cash
resources to invest into TCAT's operations, as it has done to date, with a
view to benefitting from the medium-term value creation potential of the
business.
In October, we welcomed Mark Adams to the Board as an Independent
Non-Executive Director . As part of his role, he also chairs the Audit
Committee. In the short time since his arrival, Mark has already made a
significant contribution to the Group. With a nearly 30-year career working in
senior finance roles across a range of high profile, listed companies, Mark
brings extensive complementary experience to the Company's Board, with a
particular focus on financial strategy and transactions, including M&A and
fundraising, as well as best practice corporate governance. Mark's appointment
further improves our corporate governance and provides us with important
strategic insight built on an extensive track record of successfully operating
in the listed sector at the highest levels. To have someone of his calibre
as part of our team is a strong endorsement of the Group's potential as we
continue our journey to deliver shareholder value.
Looking at the economic and political backdrop, the last year has been a
challenging one for many businesses and people across the world, for many
different reasons. We are all having to navigate rising interest rates and
inflation, which are contributing to a cost-of-living crisis; while it is very
sad that, twelve months on, war is continuing in Europe. Our hearts and minds
continue to stand with the people of Ukraine.
Despite these difficulties, the music industry outlook remains positive. The
growing popularity of streaming services and the technological changes that
are creating some incredible new opportunities for content licensing offer
significant potential for rightsowners such as One Media to proactively grow
their income.
The Group's ongoing positive performance against this encouraging industry
backdrop leaves us optimistic about the year ahead, including the business
plan for TCAT and, importantly, the opportunities that will be available for
the Group to continue to showcase its deep expertise in driving revenues from
digital copyrights.
Claire Blunt
Non-Executive Chairman
Chief Executive's Statement
Strategy overview
One Media is an owner, publisher and distributor of digital music copyrights
with previously proven income streams, which our specialist team grows further
through active monetisation. We derive the majority of our revenue from
royalties collected from the licensing and use of the Company's content, which
we enhance by actively seeking out and leveraging a range of opportunities
around the world. These include improving its availability globally across
over 600 streaming stores (also known as Digital Service Providers ("DSPs"))
including Apple Music, YouTube, Amazon Music and Spotify, while also working
to identify opportunities to drive royalty revenue via the placement of our
music in films, adverts and television series.
Royalty returns are largely uncorrelated to the performance of the equity
markets, they are predictable and generate an annuity-like income for
investors, which is at the core of our investment case. Additionally, One
Media tends to focus on more mature compositions with proven durability,
underpinning the delivery of reliable revenues.
We are custodians of an extensive catalogue of over 240,000 music tracks,
diversified across a range of genres including pop, rock, country and
classical, which deliver long term, growing and secure income, around 97% of
which is recurring. Our catalogue includes different types of
copyrights associated with high profile artists, including producer's
royalties from certain recordings by Take That, Culture Club, Heatwave, and
Kid Creole. We also own master rights (recordings) and writers' royalties
(compositions) for Don Williams, Mago De Oz, Philip Wesley, as well as
thousands of other income producing royalties derived from our global
exploitation of music via our many distribution partners in both audio and
video.
Leveraging its expansive industry relationships, the Company is able to
identify proven content which it believes is undervalued or has latent
potential, which we then seek to crystallise on behalf of shareholders. The
Group also comprises complementary initiatives that support the delivery of
our core strategy while also providing additional, diversified sources of
revenue.
Harmony IP was established in 2020 and enables composers and master rights
owners to release portions of equity from their music, giving artists greater
flexibility to access future earnings while retaining majority ownership of
their much-loved intellectual property. From a One Media perspective, it
supplements our existing revenue streams and creates opportunities for us to
build strongly aligned partnerships and relationships with rights owners,
putting us in a favourable position to increase our exposure to their assets
further down the line. Over £5.4 million has been deployed since Harmony IP's
inception, allowing the Group to purchase selective portions of legacy
catalogues.
Finally, the Group's Technical Copyright Analysis Tool ("TCAT"), is a software
as a service ("SaaS") platform - accessed via an online portal on an ongoing
subscription basis centrally hosted by TCAT using AWS in the cloud.
Developed by One Media, it is a proprietary, specialist anti-piracy tool which
identifies illegal or unlicensed use of digital music (copyright
infringement), helping to maximise revenue for record labels and also for One
Media. Collecting and viewing data in real time and storing said data for data
searches on behalf of its clients to be used by them on a request by request
basis, TCAT's data searches assists clients in supporting both our acquisition
strategy, tracks audit usage and further de-risking our investment process.
Financial performance
In April 2022, our content catalogue was independently valued at £34.8
million, representing an implied value of 16.1p per share and, importantly,
the fair value of the portfolio that has been carefully assembled over the
last 16 years.
Our catalogue has been instrumental in the Group delivering double digit
growth once again this year, with revenue up 17% to £5.1 million (2021: £4.4
million) and EBITDA up 9% to £1.8 million (2021: £1.6 million).
This continued growth is a reflection of our selective acquisition strategy,
which is focused on investing into evergreen content that has proven incomes
profiles; the active asset management of our rights by the Group's specialist
team; and the supportive industry backdrop, underpinned by the ongoing
positive trajectory of the music streaming sector.
Net revenue increased by 20% to £3.3 million (2021: £2.8 million), which is
indicative of the strong underlying performance of our catalogue as well as
acquisitions undertaken during the year. With c. 80% of Group income
denominated in US dollars, revenues were also supported by favourable foreign
exchange rates. Management keeps a close eye on currency exchange markets and
takes a nimble approach to forex decisions to take advantage of beneficial
movements.
Operating profit and earnings per share were down on 2021, to £0.9 million
(2021: £1.1 million) and 0.20p (2021: 0.24p) respectively, as a result of the
impact of the Group's investment into TCAT, as well as costs relating to the
refinancing completed with Coutts & Co.
In September, we refinanced £1.9 million of outstanding unsecured loan notes
held by British Growth Fund, which carried a fixed interest rate of 7%. The
refinancing was undertaken by way of a secured facility from Coutts & Co.
priced at base rate plus 3.5%, amortising on a straight-line basis over five
years. Whilst secured, the new Coutts facility is on more traditional bank
lending terms and contains fewer restrictions on the operations of the
business, giving us greater flexibility in executing our strategy.
Following an in-depth strategic review, TCAT will remain within the One Media
Group, with a view to benefitting from the medium-term value creation
potential of the business. We will therefore continue to use the Group's cash
resources to invest into TCAT's operations, as we have done to date. The net
cash investment is expected to be up to c. £1.4 million in the current
financial year (up from c. £0.8 million in FY22) but it is not expected to
impact on the Group's dividend policy. However, whilst the Group invests in
TCAT, we have stated that there will be reduction in cash resources available
to the Group for potential content acquisitions.
At the end of the period, our cash balance was £2.2 million (2021: £2.6
million), meaning our business continues to be supported by a healthy balance
sheet giving the Group capacity to take advantage of investment opportunities,
as well as accretive reinvestment into the Group.
As a result of the positive performance in the year, a final dividend of
0.055p per share has been declared by the Board, pending shareholder approval
at the Annual General Meeting.
Operational update
During the year, we invested £1.7 million, including into new acquisitions
that we identified as fitting our appetite for proven, recurring income
streams that have the potential to be further cultivated. This means curating,
repurposing, restoring and, importantly, policing our content with all the
care that the original writers and performers value and now rely on.
We are focused on content that is older and more established, meaning it can
often be overlooked or undervalued, but almost always recognisable by tune or
artist. We take these pieces of music and nurture them carefully through our
in-house team of expert Creative Technicians, improving the chances of
rediscovery through precise metadata to reach consumers via DSPs across over
200 territories and growing their exposure through licensing opportunities.
We also take measures to prevent the piracy or copyright infringement of our
music, which results in lost revenues for rights owners, through the
deployment of TCAT. Piracy purportedly costs the global music industry
approximately £9 billion per annum in lost revenues, over £300 million of
which is lost from the UK music industry's rightsholders, while 38% of global
music and video streaming listeners acquire music through illegal
exploitation, often without the consumer even knowing it.
TCAT detects copyright infringement across the legitimate DSPs by alerting
rightsowners to instances of corrupted data, facilitating the removal or
correct monetisation of offending tracks.
During the year, the TCAT business plan was progressed under the stewardship
of Nick Stewart, following his appointment as CEO in February 2022. Nick has
over 40 years of music industry experience, having held senior roles at
Universal Music and Warner Music among others. Since stepping into the role,
he has been leveraging his network and industry knowledge to further establish
the TCAT brand and develop its customer base.
We believe that TCAT has significant potential and, given industry needs, can
become the 'go to' anti-piracy software for the music industry. Following the
Board's strategic decision, taken alongside advisors and shareholders, to
retain TCAT within the One Media Group, we will continue to oversee and fund
its growth with caution, with a view to unlocking further value from its
medium-term potential. TCAT's unique set of features position it well for
industry leadership, with the right investment and guidance. We believe that
its technology offers a solution to many who are not only struggling to battle
copyright infringement of their assets, but also to improve the digital
fingerprints - or metadata - of their catalogues and recoup the full value of
what they have created or own.
To help us on this journey, we have invested in our headcount to ensure that
we have the right level and type of skillset in software development. As a
result, our team across the Group, including TCAT, has increased to 21. The
TCAT team's focus for the year will be on continuing to develop the product to
ensure that it is on a path to industry leadership, energising the brand and
progressing sales initiatives, especially among the major and independent
record label community.
Finally, at board level, Mark Adams joined us as an independent Non-Executive
Director. Mark's background of significant experience in the listed sector and
capital markets has already proven invaluable to the business and he is a
welcome addition to the Group.
Investments and rights management
The Company raised £5.6 million of equity (net of costs) in August 2020, of
which £5.4 million has so far been invested into the acquisition of eight
portfolios of music rights. These transactions have been completed at an
attractive blended multiple of 9 times and have generated an annualised yield
of 12% since we acquired them.
Where we have made catalogue acquisitions in the year under review, we have
maintained our usual disciplined approach resulting in a blended investment
multiple of below 11 times.
In March 2022, we announced that we had acquired the licensor's share of the
royalty income to the Orbital Digital Ltd catalogue of rights, which contains
several thousand recordings. Orbital/Rapier Music features more than 40
branded labels across multiple digital platforms including African Lives, All
About Blues, Travelscape Records, The Music Shed, Rapier Music, and Sunflash.
The catalogue ranges from classical through to dance/hip hop and features a
wide array of artists such as José Carreras, Jo Jo Adams, Kool & the
Gang, Irish Tenor Trio, Alexander O'Neal, Joe Strummer, Sid Vicious, Chic, Lee
Perry, The Lambrettas, Dread Filmstone, Sex Pistols, Suketu, Col Abram,
Psy-Co-Billy, Rachel Porter's all female Orchestra and Ebn Ozn.
Whilst the strategic decision has been taken at Group level to prioritise
investment into TCAT, our core business of music monetisation remains key.
We view the coming months as an opportunity to consolidate and focus on our
existing catalogue of 240,000 recordings, including the global positioning and
continued exploitation of these tracks via our partners, The Orchard; wider
third party opportunities such as YouTube; and sync licensing of our content
for film and television use.
Our day-to-day work is largely focused on this aspect of the business, which
is how we generate the majority of revenues and deliver value for
shareholders. It is a highly specialist skill that requires knowledge of the
copyright and rights management landscape, a detailed understanding of the
growing opportunities that are available for music and content placement and,
importantly, a network of trusted contacts in various roles across the media
business and beyond, which gives us early sight of opportunities to monetise
our catalogue.
The massive growth of television streaming over recent years continues to
offer an increasing number of opportunities to secure sync deals, where we
agree an initial payment for the licensing of the tracks for use, as well as
ongoing payments for any subsequent airing. Our Point Classics catalogue,
which is a world leading library of classical music, is a good example of
where we agreed several high-profile sync licensing deals during the year,
including on Netflix's 'Bridgerton' and the Hulu/Disney+ series 'Only Murders
in the Building'. Our classical catalogue was also used by HBO Max, ABC and
Amazon Prime.
We are always exploring new ways to further maximise the availability of our
tracks for commercial use and deepen our relationships with music supervisors,
whose role in the industry is to select music for film, TV, adverts, brand
partnerships and video games. To date, the sector has lacked an affordable,
simple solution for clearing music for film, TV and other uses, including
music projects in school and universities. To this end, One Media launched a
new annual subscription model for our sync platform, Syncphonnix. Working in a
similar way that Shutterstock does for photography and image rights,
Syncphonnix reduces time spent on administration and track by track
negotiations, providing a regular and more efficient income stream for One
Media. It also enables music supervisors to more easily access readily
licensed music for their projects, a guarantee not always afforded by larger
rightsowners.
Via Syncphonnix, tailored annual rates are offered to each customer, based on
their sector (film production, education, advertising) and the intended usage.
Initially, users will have access to copyright-cleared popular classical music
by Mozart, Handel, Bach, Vivaldi, Tchaikovsky, Chopin and others. Subscribers
will be able to create and tailor projects via the website app and download
broadcast quality files in full, or in specially edited 30-second and
five-second stings. The intention is to broaden the platform out to provide
tracks through subscription across all genres, including One Media's wider
catalogue.
Another major income stream for One Media's digital rights is music streaming.
As an illustration of our innovative approach, for World Mental Health Month
and World Mental Health Day, One Media partnered with consultant chartered
psychologist, Marie-Clare Mendham at UK Psychology Ltd. Together we created a
series of five specialist playlists, including calming music for anxiety
relief, brain stimulation and music to aid sleeplessness, to mark the day and
offer expertly selected music through Spotify.
Maximising the availability of our music to audiences, including through
specialist playlists, helps to improve its exposure, increases the number of
streams and directly translates into revenues.
Market backdrop and outlook
Despite economic and political difficulties being felt, unfortunately, around
the world, including the ongoing war in Ukraine and the challenges presented
by the cost of living, indicators for the music industry remain supportive.
Research from the International Federation of the Phonographic Industry
("IFPI") suggests that global recorded music revenues grew for the seventh
consecutive year in 2021, increasing by 18.5%.
Goldman Sachs, in its annual 'Music in the Air' report, backs this narrative.
In June last year, it announced that it had raised its 2022 and 2023 global
music forecasts by 7% and 5% respectively. While we have seen redundancies
announced across the tech sector and questions around how the cost-of-living
crisis might impact discretionary spend, the consensus is that music streaming
is unlikely to be affected to any discernible degree. Indeed, Goldman Sachs
last year predicted that it would deliver a 12% CAGR over the 2021-2023
period, driven by volume, price and additional emerging opportunities.
Moreover, as we have highlighted in the past, the digital marketplace is still
a relatively young forum and the format of monetised streaming is less than 15
years old. There is significant road to run as platforms continue to expand
their reach and technological innovations improve access to and recognition of
intellectual property rights. In addition, there is a host of burgeoning
opportunities across the digital marketplace, including those being created by
companies like Meta and Peloton, or, more broadly, Web3, the Metaverse and the
growth of non-fungible tokens ("NFTs") and now ChatGPT, OpenAI's latest tool
in data research. Our Creative Technicians are already experimenting with
where and how the Group's opportunities for further content discovery by
consumers will be enhanced by greater technology reducing searching times,
linking music to other searched categories during daily interrogation on
search engines and greater opportunities to increasingly monetise existing
Group owned content.
We remain confident that our model for steady growth and continual investment
in copyrights is a proven, recurring cash generative business and the Board
and management remain strongly aligned with investors through their 12%
shareholding in the Company.
The current year's trading has started in line with our expectations. The
Group is well positioned for the year ahead and we continue to work hard on
behalf of our shareholders to maintain our positive performance and to deliver
secure and growing returns.
Michael Infante
Chief Executive and Founder
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2022
Year ended Year ended
Note 31 October 2022 31 October 2021
£ £
Revenue 2 5,128,840 4,389,581
Distribution charges (1,090,703) (1,107,127)
Royalty costs (459,115) (435,386)
Other costs (253,334) (66,542)
Net revenue 3,325,688 2,780,526
Amortisation of catalogues (806,082) (599,308)
Administration expenses (1,604,863) (1,040,706)
Foreign exchange gains/(losses) 34,365 (64,554)
Operating profit 949,108 1,075,958
Share based payments - (77,178)
Finance costs (384,416) (184,045)
Finance income - 1
Profit from continuing activities 564,692 814,736
Assets disposal - (93,939)
564,692 720,797
Profit on ordinary activities before taxation
Tax expense 3 (126,442) (176,222)
Profit for period attributable to equity shareholders and total comprehensive 438,250 544,575
income for the year
Basic earnings per share 5 0.20p 0.24p
Diluted earnings per share 5 0.16p 0.20p
The Consolidated Statement of Comprehensive Income has been prepared on the
basis that all operations are continuing activities.
Consolidated Statement of Changes in Equity
For the year ended 31 October 2022
Share Capital Share redemption reserve Share premium Share based payment reserve Retained earnings Total equity
£ £ £ £ £ £
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
Share based payment charge - - - 77,178 - 77,178
Profit for the year - - - - 544,575 544,575
Dividends paid - - - - (122,345) (122,345)
At 1 November 2021 1,112,231 239,546 9,484,577 504,399 3,418,054 14,758,807
Proceeds from the issue of new shares - - - - - -
Share based payment charge - - - - - -
Profit for the year - - - - 438,250 438,250
Dividends paid - - - - (122,345) (122,345)
At 31 October 2022 1,112,231 239,546 9,484,577 504,399 3,733,959 15,074,712
Consolidated Statement of Financial Position
At 31 October 2022
At At
Note 31 October 2022 31 October 2021
£ £
Assets
Non-current assets
Intangible assets 7 14,438,031 13,484,077
Property, plant and equipment 8 12,998 44,007
14,451,029 13,528,084
Current assets
Trade and other receivables 1,472,369 1,481,077
Cash and cash equivalents 2,175,663 2,565,813
Total current assets 3,648,032 4,046,890
Total assets 18,099,061 17,574,974
Liabilities
Current liabilities
Trade and other payables 993,646 937,622
Deferred tax 158,253 132,830
Total current liabilities 1,151,899 1,070,452
Borrowings 1,872,450 1,745,735
Total liabilities 3,024,349 2,816,187
Equity
Called up share capital 1,112,231 1,112,231
Share redemption reserve 239,546 239,546
Share premium account 9,484,577 9,484,577
Share based payment reserve 504,399 504,399
Retained earnings 3,733,959 3,418,054
Total equity 15,074,712 14,758,807
Total equity and liabilities 18,099,061 17,574,974
Consolidated and Company Cash Flow Statement
For the year ended 31 October 2022
Year ended Year ended Year ended Year ended
31 October 2022 31 October 2021 31 October 2022 31 October 2021
Group Group Company Company
£ £ £ £
Cash flows from operating activities
Operating profit/(loss) before tax 564,692 720,798 (49,801) (418,586)
Amortisation 806,082 599,169 - 369,263
Depreciation 40,577 50,509 - -
Share based payments - 77,178 - 77,178
Finance income - (1) - (1)
Finance costs 384,416 184,045
(Increase)/decrease in receivables (24,879) (313,783) (414,111) -
(4,070,290)
Increase/(decrease) in payables (175,323) (69,144) 23,402 144,017
Corporation tax paid (14,926) (72,063) - -
Net cash inflow/(outflow) from operating activities 1,580,639 1,176,708 (440,510) (3,898,419)
Cash flows from investing activities
Investment in intellectual property rights and TCAT (1,760,036) (5,199,087) - -
Investment in property, plant and equipment (9,569) (3,257) - -
Finance income - 1 - 1
Net cash used in investing activities (1,769,605) (5,202,343) - 1
Cash flows from financing activities
Net proceeds from the issue of new shares - 13,750 - 13,750
Finance cost paid (205,554) (114,873) - (114,873)
Bank loan 1,900,000 - 1,900,000 -
Loan notes repayment (1,900,000) - (1,900,000) -
Loan notes 126,715 48,492 126,715 48,492
Dividend paid (122,345) (122,345) (122,345) (122,345)
Net cash inflow/(outflow) from financing activities (201,184) (174,976) 4,370 (174,976)
Net change in cash and cash equivalents (390,150) (4,200,611) (436,140) (4,073,394)
Cash at the beginning of the year 2,565,813 6,766,424 2,314,653 6,388,047
Cash at the end of the year 2,175,663 2,565,813 1,878,513 2,314,653
Notes to the Preliminary Results
1. Basis of preparation
The Company is a public limited company incorporated and domiciled in England
under the Companies Act 2006. The Board has adopted and complied with
International Financial Reporting Standards (IFRS) as adopted by the European
Union. The Company's shares were admitted for trading on the AIM market of the
London Stock Exchange on 18 April 2013.
2. Segmental Analysis
IFRS 8 'Operating Segments' requires the Group's segments to be identified on
the basis of internal reports about components of the Group that are regularly
reviewed by the Chief Operating Decision Maker to allocate resources to the
segments and to assess their performance. The Chief Operating Decision Maker
is considered to be the Chief Executive Officer of One Media IP Group Plc.
The Chief Operating Decision Maker receives and reviews segmental operating
profit. Certain central administrative costs including Group Directors'
salaries are included within the Group's Licenses result. This is consistent
with the results as reported to the Chief Operating Decision Maker.
Each segment is shown net of intercompany transactions and balances within
that segment. The eliminations remove intercompany transactions and balances
between the different segment which primarily relate to the net draw down of
loans and short-term working capital funding provided by One Media IP Group
Plc to the other company in the Group. Inter-segment transactions are
undertaken in the ordinary course of business on arm's length terms.
Information regarding the Group's reportable operating segments for the year
ended 31 October 2022 is shown below:
Licenses TCAT Total
Income statement £ £ £
Revenue 4,761,943 366,897 5,128,840
Distribution charges (1,090,703) - (1,090,703)
Royalty costs (459,115) - (459,115)
Other costs (78,730) (174,604) (253,334)
Net revenue 3,133,395 192,293 3,325,688
Amortisation (720,635) (85,447) (806,082)
Administration expenses (1,146,172) (458,691) (1,604,863)
Foreign exchange gains 25,804 8,561 34,365
Operating profit 1,292,392 (343,284) 949,108
Finance costs (356,732) (27,864) (384,416)
Profit / (loss) before taxation 935,660 (370,968) 564,692
Tax expense (126,442)
Profit for the period 438,250
Licenses TCAT Eliminations Total
Total assets and liabilities £ £ £ £
Total assets 18,318,839 1,458,896 (1,678,674) 18,099,061
Total liabilities (2,930,914) (1,772,109) 1,678,674 (3,024,349)
Total segment net assets/ (liabilities) 15,387,925 (313,213) - 15,074,712
Geographical information
Revenue is the amount attributable to the Group's principal activity
undertaken in the United Kingdom. The geographic split of Group revenue is as
follows:
Year ended Year ended
31 October 2022 31 October 2021
Revenue
£ £
United Kingdom 345,121 148,866
North America & rest of world 4,244,479 3,909,097
Europe 539,240 331,618
5,128,840 4,389,581
The Group considers it has two business segments with its Profit from the
acquisition and exploitation of mixed media intellectual property rights for
distribution and a SAAS platform, ultimately earned from its sole activity in
the United Kingdom.
Year ended Year ended
31 October 2022 31 October 2021
Revenue by segment
£ £
Licenses and other media intellectual property 4,761,943 4,243,787
TCAT 366,897 145,794
5,128,840 4,389,581
Included in revenues for the year ended 31 October 2022 it is estimated that
£819,000 (2021: £867,000) is from its largest ultimate customer and
£410,000 (2021: £412,000) from its second largest ultimate customer.
Together these represent 24% (2021: 29.1%) of the total Group revenue for the
year. In addition, the company relies on a distribution aggregator (The
Orchard) who channels approximately 51% (2021: 63%) of the Group's turnover.
3. Taxation
Year ended Year ended
31 October 2022 31 October 2021
£ £
Analysis of the charge for the year
UK corporation tax charge 105,703 171,122
Deferred tax 20,739 5,100
126,442 176,222
The standard rate of tax for the year, based on the UK standard rate of
corporation tax is 19% (2021: 19%). The actual tax charge for the periods is
different than the standard rate for the reasons set out in the following
reconciliation:
Reconciliation of current tax charge Year ended Year ended
31 October 2022 31 October 2021
£ £
Profit on ordinary activities before tax 564,692 814,737
Tax on profit on ordinary activities at 19% (2021: 19%) 107,292 154,800
Effects of:
Non-deductible expenses 13,619 18,071
Adjustments to tax charge in respect of previous periods
- -
Fixed asset timing differences 8,225 5,100
Depreciation in excess of capital allowances
5,719 8,768
Research and development (8,413) (10,517)
Total tax charge 126,442 176,222
4. Employee information
Year ended Year ended
31 October 2022 31 October 2021
£ £
Directors' emoluments - excluding applicable share option and pension charges 485,292 390,565
Fees paid to directors 69,274 59,688
Share option charge - 77,178
TCAT staff payroll and expenses 752,701 534,894
Wages and salaries 188,589 158,439
Social security 46,540 58,679
Pension 8,340 7,011
Benefit in kind - 1,068
1,550,736 1,287,522
The average monthly number of Group employees (excluding non-executive
directors) during the year was as follows:
Year ended Year ended
31 October 2022 31 October 2021
Technical, creative technicians and management 12 11
Developers and management (TCAT Ltd) 9 7
5. Earnings per share
The weighted average number of shares in issue for the basic earnings per
share calculations is 222,446,249 (2021: 222,446,249) and for the diluted
earnings per share assuming the exercise of all warrants and share options is
267,779,582 (2021: 267,606,979).
The calculation of basic earnings per share is based on the profit for the
period of £438,251 (2021: £544,575). Based on the weighted average number of
shares in issue during the year of 222,446,249 (2021: 222,446,249) the basic
earnings per share is 0.20p (2021: 0.24p). The diluted earnings per share is
based on 267,779,582 shares (2021: 267,606,979) and is 0.16p (2021: 0.20p).
6. EBITDA
Profit from continuing activities before interest, tax, depreciation and
amortisation for the twelve months ended 31 October 2022 was £1,795,768
(2021: £1,648,459).
7. Intangible assets - Group
Licenses and other intangibles Total Intangible
assets
TCAT
£ £ £
Cost
At 1 November 2020 11,214,491 - 11,214,491
Additions 4,438,554 854,472 5,293,028
Disposals (93,939) - (93,939)
At 31 October 2021 15,559,106 854,472 16,413,578
Additions 1,225,577 534,459 1,760,036
Disposals - - -
At 31 October 2022 16,784,683 1,388,931 18,173,614
Amortisation
At 1 November 2020 2,330,332 - 2,330,332
Charge for the year 553,369 45,800 599,169
Disposals - - -
At 31 October 2021 2,883,701 45,800 2,929,501
Charge for the year 720,635 85,447 806,082
Disposals - - -
At 31 October 2022 3,604,336 131,247 3,735,583
Net book value
At 31 October 2022 13,180,347 1,257,684 14,438,031
At 31 October 2021 12,675,405 808,672 13,484,077
8. Property, plant and equipment - Group
Office Fixtures and Right of Use assets Total
equipment fittings
£ £ £ £
Cost
At 1 November 2020 70,580 11,294 98,692 180,566
Additions 3,256 - - 3,256
Disposals - - - -
At 31 October 2021 73,836 11,294 98,692 183,822
Additions 9,569 - - 9,569
Disposals - - - -
At 31 October 2022 83,405 11,294 98,692 193,391
Depreciation
At 1 November 2020 65,723 11,096 12,487 89,306
Charge for the year 3,351 198 46,960 50,509
Disposals - - - -
At 31 October 2021 69,074 11,294 59,447 139,815
Charge for the year 4,190 - 36,388 40,578
Disposals - - - -
At 31 October 2022 73,264 11,294 95,835 180,393
Net book value
At 31 October 2022 10,141 - 2,857 12,998
At 31 October 2021 4,762 - 39,245 44,007
Directors' responsibilities
The Annual Report, including the financial information contained therein, is
the responsibility of, and was approved by the directors on 28 March 2023.
Availability of Report and Accounts
Copies of the Company's Report and Accounts will be posted to shareholders
shortly. Copies of the Company's Report and Accounts will also be available at
the registered office of the Company and can be viewed on the Company's
website, www.omip.co.uk (http://www.omip.co.uk) .
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.
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