REG - One Media iP Group - Half-year Report
28/06/2023 07:00
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RNS Number : 1171E One Media iP Group PLC 28 June 2023
28 June 2023
One Media iP Group Plc
("One Media", the "Group" or the "Company")
Interim Results for the six months ended 30 April 2023
Continued strong revenue performance with TCAT investment showing results
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
unaudited interim results for the six months ended 30 April 2023.
Financial Highlights
· 15% increase in revenue to £2.7m (H1 2022: £2.4m), of which
£2.5m was generated from intellectual property royalties driven largely by
organic growth and active management of portfolio of copyrights
· 14% uplift in net revenue to £1.8m (H1 2022: £1.6m)
· EBITDA of £0.8m (H1 2022: £1.0m) reduced due to allocation of
resources to TCAT in line with Group strategy. Core business of copyright
investments performed positively delivering an EBITDA of £1.1m
· Trials of TCAT software in the six months to 30 April 2023
generated £182,000, compared to £74,000 for H1 2022, reflecting a 147% year
on year increase
· Reduced EPS of 0.07p (H1 2022: 0.19p) as a result of strategic
investment into TCAT
· Net margin maintained at 67% (H1 2022: 67%)
· Cash balance at 30 April 2023 of £2.2m (H1 2022: £2.1m)
· Final dividend of 0.055p per share distributed in May 2023
Operational Highlights
· Ongoing active management of music and video rights portfolio,
with focus on maximising potential of catalogues which include recorded and/or
producers' royalty rights to songs written or performed by Culture Club, Don
Williams, Mungo Jerry, José Carreras, Kid Creole, Mago De Oz and Take That
· Continued growth and expansion of TCAT client base, with
internationally recognised songwriters, two majors and several independents
among those now either trialling or licensing TCAT's software
· New product - TCAT Insight - launched post period end with
pipeline of further products to add to suite of TCAT software solutions
designed to tackle digital copyright infringement
Outlook
· Continued positive outlook for industry, with new developments
bringing increasing opportunities to generate value from digital copyrights as
well as requirements for protecting copyrights from illegal infringement
Michael Infante, CEO said: "The digital rights division of our business
continues to perform strongly and in line with expectations. Given our
specialist skillset, the positive structural tailwinds and supportive
developments in the music industry, we remain optimistic about the growth
prospects for our catalogues portfolio.
"Alongside the ongoing management of our copyright catalogues, our strategic
focus has been on investing in the potential we see in TCAT against this
advancing industry backdrop. We continue to invest in content with both time
and resource and will, as part of our day-to-day, exploit opportunities that
fall within the Company's acquisition multiple expectations. Over the past six
months the TCAT team has introduced several new products, tailored to the
digital copyright challenges being experienced by the industry. AI has had
much press acclaim and equally has spread elements of concern within the music
industry. Our commitment to staying ahead of the curve and embodying AI in
both our catalogue enhancement and TCAT detection process, as well as using
the technology to improve our metadata, has enabled us to differentiate
ourselves from competitors and provide our customers with cutting-edge
solutions that address their evolving needs. We are already seeing positive
reactions as we seek to transform its potential into shareholder value."
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 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
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 £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 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
(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
At this half year milestone, I am pleased to report that our company continues
to demonstrate revenue growth, innovation in our response to fast moving
industry developments and an ongoing commitment to delivering value on behalf
of our shareholders. The strong performance is testament to the One Media
management and its wider team, whose hard work continues to deliver consistent
results.
Financial performance
Our financial performance for the first half of the year has been in line
with expectations. For the fourth period in succession, revenues have seen a
double digit increase, improving by 15% to £2.7m (H1 2022: £2.4m) and
putting us in a strong position for the second half of the year. This is an
excellent reflection of the quality of the Company's portfolio of music
recording rights and its efficacy at monetising their value through the
various avenues available to drive copyright royalties.
Net revenues are up 14% to £1.8m (H1 2022: £1.6m), however we have reported
a reduction in in our EBITDA to £0.8m as we continue with the stated Group
strategy of investing into our SaaS platform, TCAT. The allocation of
resources to developing and growing TCAT, an update on which is provided
below, has naturally impacted on earnings per share (EPS), which have reduced
to 0.07p (H1 2022: 0.19p). Despite this, our margins and cash balance remain
stable at 67% and £2.2m respectively.
Borrowings have decreased to £1.7m (FY 2022: £1.9m).
Alongside the continued positive performance, a final dividend for the 2022
year of 0.055p per share was distributed in May 2023 which was approved by
shareholders at the annual general meeting held on 26 April 2023.
Operations and investments
During the first half of the year, in line with the Group's stated strategy,
the management's efforts have been focused on maximising the existing
portfolio of music copyrights and on investing into growing the TCAT platform
to enable it to reach its potential.
The One Media team's success in monetising the music and video rights that we
own is well known, underpinned by its keen expertise, strong network across
the creative industries and favourable market tailwinds. A highlight in the
first half of the year was the placement of 'Concerto for Violin, Strings and
Basso Continuo No. 1 in A minor BWV 1041: Allegro', from the Point Classics
catalogue, into an episode of 'Star Trek: Picard'. The episode it featured in
(season 3, episode 8) aired on Paramount+ on 6 April 2023.
The strategic allocation of cash towards TCAT stems from our objective to
expand our investment into the proprietary software platform to grow its brand
and customer base at this important juncture for the industry. While it means
we have not committed to any significant music catalogue investments this half
year, the relevance of TCAT's offer to the music industry is increasing by the
day and investments into research and development have continued to yield
innovative solutions, enabling the whole Group to respond
to evolving digital technology market demands with even more effectiveness.
The increased support that the Group has provided over the past months has
contributed to the successful launch of several new TCAT services. The new
products have been well received by customers, who continue to trial
initiatives within their music content delivering anti-copyright infringement
results in the fight against music piracy.
In May 2023, TCAT announced the launch of a new product to its proprietary
software platform, 'TCAT Insight'. The new software's scanning ability can
help music copyright owners to detect copyright infringing tracks, including
AI generated music, and can also identify possible covers using a process that
incorporates metadata matching and artificial intelligence to analyse lyrics.
With the explosive growth of AI and the debate it has prompted in the music
industry, this new product is extremely pertinent and points to the future
potential of TCAT that, with the right direction, can be unlocked ultimately
to benefit of One Media's shareholders.
As a result of the TCAT management's active engagement across the creative
spectrum over the past 12 months, the software is now being licensed by two of
the major record companies as well as several independent record companies.
Among TCAT's clients are the leading British independent, Domino Recording
Company, which is using the anti-piracy software on behalf of a number of its
artist roster including a major English rock band; Empire Distribution, an
American distribution company and record label focused predominantly on Hip
Hop music; Irving Azoff's Iconic Artists Group; Sony Music; The Orchard
(Sony's distribution arm); and a number of prominent, internationally renowned
songwriters and composers, who are specifically using TCAT Insight to protect
their catalogues from infringement, particularly from AI generated music.
Efforts to strengthen existing customer relationships from our music related
activities and forge new strategic partnerships have yielded additional uses
for the TCAT software. The pipeline of new customers is advancing, with
several sets of negotiations in train and we have successfully entered several
new market trials, leveraging our innovative products and solutions to create
continued interest in the battle against the new emerging threats to
legitimate music monetisation. In H1 2022 these trials generated £74,000 in
revenue, while trials in the six months to 30 April 2023 generated £182,000,
reflecting a 147% increase vs the prior year.
This gives a flavour of the strides that have been made over the past year in
growing the TCAT offer and brand, while also providing an indication of the
market opportunity available to generate additional sales and sustainable
revenues in the future.
Environmental, social and governance
ESG is an integral part of our corporate strategy and we recognise the
importance of environmental stewardship, social responsibility and good
governance.
We remain committed to upholding the highest standards of corporate
governance, transparency and ethical business practices. Our Board of
Directors and management team have diligently worked to strengthen our
governance framework, ensuring that we operate with integrity and in the best
interests of our shareholders.
We have actively engaged with local communities through various philanthropic
activities and volunteering efforts. This includes our voluntary contribution
to the BPI; The Tring Park School of Performing Arts; placements for
undergraduates and apprentices within our Creative Technician team; and
offering assistance to aging artists within the One Media digital distribution
arena to help them to better understand their royalty reporting income with
one-to-one engagement.
Market backdrop and outlook
As we look towards the remainder of the year, we are optimistic about the
opportunities that lie ahead. With a strong performance delivered for the
first six months, the Company is well positioned to navigate the challenges of
an ever-changing business landscape and, importantly, to capitalise on the
emerging trends in our industry.
The music industry's growth is unabated and, indeed, forecasts are being
revised upwards. This year's IFPI's Global Music Report showed that global
revenue from recorded music grew by 9% to US$26.2 billion in 2022, an eighth
consecutive year of growth. This trajectory is being driven by the sustained
success of streaming and the growth in subscription revenue.
While global capital markets have faced some challenges over recent times, the
income derived from music royalties, underpinned by positive structural
trends, is stable, secure and annuity-like, offering an attractive option for
investors.
Against this backdrop, One Media's continued investment into our people,
technology and innovation is driving sustainable growth and creating long term
value for our shareholders.
We extend our sincere appreciation to our employees, valued customers, and
loyal shareholders. Your support has been instrumental in our success thus
far. We will remain committed to delivering on our strategic vision.
Thank you for your continued confidence in our company.
Claire Blunt
Chairman of One Media
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2023
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended 31 October 2022
30 April 2023 30 April 2022
£ £ £
Revenue 2,731,644 2,381,784 5,128,840
Distribution charges (572,920) (526,466) (1,090,703)
Royalty costs (227,917) (232,036) (459,115)
Other costs (110,088) (26,155) (253,334)
_________ _________ _________
Net revenue 1,820,719 1,597,127 3,325,688
Amortisation of catalogues (408,353) (378,251) (806,082)
Administration expenses (1,094,913) (611,342) (1,604,863)
FOREX gains 24,696 18,134 34,365
_________ _________ _________
Operating profit 342,149 625,668 949,108
Share based payments - (30,228) -
Finance costs (66,411) (90,205) (384,416)
Finance income - - -
_________ _________ _________
Profit on ordinary activities before taxation 275,738 505,235 564,692
Tax expense (110,033) (90,031) (126,442)
_________ _________ _________
Profit for period attributable to equity shareholders and total comprehensive 165,705 415,204
income for the period
438,250
========= ========= =========
Basic earnings per share 0.07p 0.19p 0.20p
========= ========= =========
Unaudited Consolidated Statement of Financial Position
As at 30 April 2023
Unaudited Unaudited Audited
30 April 2023 30 April 2022 31 October 2022
£ £ £
Assets
Non-current assets
Intangible assets 14,384,649 14,562,132 14,438,031
Property, plant and equipment 25,940 23,486 12,998
_________ _________ _________
14,410,589 14,585,618 14,451,029
_________ _________ _________
Current assets
Trade and other receivables 1,546,820 1,443,787 1,472,369
Cash and cash equivalents 2,157,169 2,138,294 2,175,663
_________ _________ _________
Total current assets 3,703,989 3,582,081 3,648,032
_________ _________ _________
Total assets 18,114,578 18,167,699 18,099,061
========= ========= =========
Liabilities
Current liabilities
Trade and other payables 1,030,698 1,055,961 993,646
Deferred tax 158,253 137,512 158,253
_________ _________ _________
1,188,951 1,193,473 1,151,899
Borrowings 1,685,210 1,769,987 1,872,450
_________ _________ _________
Total liabilities 2,874,161 2,963,460 3,024,349
_________ _________ _________
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 504,399 534,627 504,399
Retained earnings 3,899,664 3,833,258 3,733,959
_________ _________ _________
Total equity 15,240,417 15,204,239 15,074,712
_________ _________ _________
_________ _________ _________
Total equity and liabilities 18,114,578 18,167,699 18,099,061
========= ========= =========
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 April 2023
Share capital Share redemption reserve Share premium Share based payment reserve Retained earnings Total equity
£ £ £ £ £ £
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 - - - - - -
Profit for the six months to - - - - 415,204 415,204
30 April 2022
Share based payment charge - - - 30,228 - 30,228
________ _________ _________ ________ _________ _________
At 30 April 2022 1,112,231 239,546 9,484,577 534,627 3,833,258 15,204,239
Proceeds from the issue of new shares - - - - - -
Dividends paid - - - - (122,345) (122,345)
Profit for the six months to - - - - 23,046 23,046
31 October 2022
Share based payment charge - - - (30,228) - (30,228)
________ _________ _________ ________ _________ _________
At 31 October 2022 1,112,231 239,546 9,484,577 504,399 3,733,959 15,074,712
Proceeds from the issue of new shares - - - - - -
Profit for the six months to - - - - 165,705 165,705
30 April 2023
Share based payment charge - - - - - -
________ _________ _________ ________ _________ _________
Balance at 30 April 2023 1,112,231 239,546 9,484,577 504,399 3,899,664 15,240,417
======== ========= ========= ======== ========= ========
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 April 2023
Unaudited Unaudited Audited
6 months 6 months 12 months ended
ended ended 31 October 2022
30 April 2023 30 April 2022
£ £ £
Cash flows from operating activities
Profit before taxation 275,738 529,487 564,692
Amortisation 408,353 384,388 806,082
Depreciation 25,571 24,840 40,577
Share based payments - 30,228 -
Finance income - - -
Finance costs 66,411 90,205 384,416
(Increase)/decrease in receivables (74,451) 3,703 (24,879)
(Decrease)/increase in payables (72,802) 30,031 (175,323)
Corporation tax paid (6,108) - (14,926)
_________ _________ _________
Net cash inflow from operating activities 622,712 1,092,882 1,580,639
_________ _________ _________
Cash flows from investing activities
Investment in copyrights / licenses (72,791) (1,050,897) (1,225,577)
TCAT development (282,181) (411,548) (534,459)
Investment in fixed assets (38,512) (4,319) (9,569)
Finance income - - -
_________ _________ _________
Net cash used in investing activities (393,484) (1,466,764)
(1,769,605)
_________ _________ _________
Cash flow from financing activities
Finance cost paid (57,722) (53,637) (205,554)
Bank loan - - 1,900,000
Loan notes repayment (190,000) - (1,900,000)
Loan notes - - 126,715
Dividend paid - - (122,345)
_________ _________ _________
Net cash (outflow) from financing activities (247,722) (53,637) (201,184)
_________ _________ _________
Net change in cash and cash equivalents (18,494) (427,519) (390,150)
Cash at the beginning of the period 2,175,663 2,565,813 2,565,813
_________ _________ _________
Cash at end of the period 2,157,169 2,138,294 2,175,663
========= ========= =========
Notes to the Interim Report
For the six months ended 30 April 2023
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 2022 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 2023. 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 2022.
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 2022.
3. 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 period
ended 30 April 2023 is shown below:
Licenses TCAT Total
Income statement £ £ £
Revenue 2,550,124 181,520 2,731,644
Distribution charges (572,920) - (572,920)
Royalty costs (227,917) - (227,917)
Other costs (45,390) (64,698) (110,088)
Net revenue 1,703,897 116,822 1,820,719
Amortisation (365,629) (42,724) (408,353)
Administration expenses (652,512) (442,401) (1,094,913)
Foreign exchange gains 32,962 (8,266) 24,696
Operating profit 718,718 (376,569) 342,149
Finance costs (66,411) - (66,411)
Profit / (loss) before taxation 652,307 (376,569) 275,738
Tax expense (110,033)
Profit for the period 165,705
Licenses TCAT Eliminations Total
Total assets and liabilities £ £ £ £
Total assets 18,721,304 1,662,407 (2,269,133) 18,114,578
Total liabilities (2,791,105) (2,352,189) 2,269,133 (2,874,161)
Total segment net assets/ (liabilities) 15,930,199 (689,782) - 15,240,417
Revenue by segment
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.
Unaudited 30 April 2023 Unaudited 30 April 2022 Year ended
31 October 2022
£ £ £
Licenses and other media intellectual property 2,308,162 4,761,943
2,550,124
TCAT 181,520 73,622 366,897
2,731,644 2,381,784 5,128,840
4. 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 per share 6 months ended 6 months ended 12 months ended
30 April 2023 30 April 2022 31 October 2022
Profit for period attributable to equity shareholders 165,705 415,204 438,250
Weighted average number of shares in issue at period end 222,446,249 222,446,249 222,446,249
_________ _________ _________
Basic earnings per share 0.07p 0.19p 0.20p
========= ========= =========
The diluted earnings per share would be lower than the basic profit per share
as the exercise of warrants and options would be dilutive.
5. Share capital
Unaudited Unaudited Audited
30 April 2023 30 April 2022 31 October 2022
Group and company £ £ £
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
========== ========== ==========
6. 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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