REG - One Media iP Group - Half-year Report
28/06/2024 07:00
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RNS Number : 2384U One Media iP Group PLC 28 June 2024
28 June 2024
One Media iP Group Plc
("One Media", the "Group" or the "Company")
Interim Results for the six months ended 30 April 2024
Revenues stable with core business of music rights continuing to deliver
positive performance
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 2024.
Financial Highlights
· Increase in Group revenue to £2.8m (H1 2023: £2.7m), of which
£2.6m was generated from intellectual property royalties, driven by organic
growth and expert management of copyrights portfolio
· Net revenue at £1.8m (H1 2023: £1.8m) mainly due to ongoing
allocation of resources to the Group's Technical Copyright Analysis Tool
software ("TCAT"), in line with Group strategy
· 14% increase in EBITDA to £0.9m (H1 2023: £0.8m), with growth
largely due to management focus on cost efficiencies within TCAT business and
ongoing performance of core portfolio of music copyrights
· Notwithstanding funding of TCAT, considering that no new material
additions have been made to the portfolio, the core business of copyright
investments performed positively and in line with expectations, delivering an
EBITDA of £1.1m
· Debt decreased to £1.3m (H1 2023: £1.7m) with continuation of
payments in line with refinancing terms reducing Coutts facility by a further
£0.4m
· Cash balance at 30 April 2024 of £0.9m (H1 2023: £2.2m)
· Increase in EPS to 0.08p (H1 2023: 0.07p)
· Net margin maintained at 67% (H1 2023: 67%)
· Final dividend of 0.055p per share distributed in June 2024
Operational Highlights
· Continued focus on active management of music copyrights
portfolio to maximise income potential of rights under ownership
· Entertain Me acquisition, completed in November 2023, performing
well and delivering multiples in line with expectations
· No further catalogue investments due to prioritisation of cash
towards TCAT subsidiary
· Experimental launch of a new record label, 'The Carolean', to
take advantage of the explosion in sales of vinyl record market, where a 7.1%
CAGR is projected from 2024-2032
· Efforts to establish and grow software subsidiary, TCAT, ongoing,
with focus on cost efficiencies, new product launches and sales and marketing
functions
Market and outlook
· Music industry continuing to enjoy benefits of industry
tailwinds, supporting strong value and revenue growth with growing
opportunities to monetise music.
· Long term impact of artificial intelligence (AI) on the music
industry yet to be determined, with the potential for both positive and
negative outcomes for the music industry and the Group, including the
increased discoverability of its catalogues and copyright infringement, which
TCAT was built to tackle. The management and Board continue to keep
developments under review as part of its day to day operations.
Michael Infante, CEO said: "One Media's principal expertise is in managing and
investing in music copyrights and this core part of our business continues to
perform well and in line with expectations. Our capacity to grow our Group
profits, however, is somewhat constrained by the continued strategic
allocation of resources, including management time, towards establishing and
growing our music anti-piracy technology tool, TCAT. This strategy remains
under constant review and, as stated previously, we ultimately see TCAT's
future lying outside of the core music group. As expected, the delivery of
shareholder value continues to be the overriding priority for the management
team and Board."
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
Cavendish Capital Markets Limited Broker
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
diversified catalogue of over 400,000 music tracks. 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
The half year results for the six months to 30 April 2024, while positive,
have not delivered the same level of growth that we are used to achieving at
One Media, with only a modest uplift in Group revenues and flat net revenues.
The core business of investing in and managing digital music rights is
performing well and very much in line with expectations. However, the Group's
ability to invest in and grow the portfolio, which focuses on evergreen tracks
with a continued appeal to listeners of all ages and proven, recurring income
streams, is limited at present by the level of resources required to establish
and build the Group subsidiary, TCAT.
On 6 January 2023, we announced that an assessment of the strategic position
of the TCAT business had been completed in conjunction with the Group's
advisors and engagement 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. The review concluded that
greater value could be captured by retaining TCAT within the Group and
supporting TCAT in reaching its next level of growth.
Since then, the Group strategy has focused on supporting TCAT through the
introduction of cost efficiencies and the diversion of revenues from the
successful digital copyrights business towards this anti-piracy SaaS platform.
Alongside the TCAT management team, we continue to keep this strategy under
review to ensure that it is delivering the best possible value for
shareholders and all of the options available to us continue to be explored,
including the possibility of bringing on board a partner with the financial
flexibility and technology expertise to bring TCAT to its next level of
development.
Financial performance
The Group financial performance for the period was positive but also reflected
the ongoing allocation of resources towards TCAT, together with changes to
some of the subscription models on DSPs (Digital Service Providers),
particularly Amazon which traditionally accounts for the majority of our
income from streaming platforms.
More than 12 months on, the full impact of the changes implemented at Amazon
Music in November 2022, whereby the entirety of its library of 100 million
songs was made available to Amazon Prime members at no additional cost to the
consumer but to the detriment of royalty payments to music rightsholders, has
now been felt.
While the move has led to a reduction in income to the Group from the Amazon
Music platform, with a full year under the new model now past, we do not, at
this stage, expect there to be any further impact on Group revenues. As the
media has reported, disputes between music rightsholders and digital
platforms, including Amazon Music, Spotify and TikTok, are ongoing and the
industry continues to push hard to ensure that music rightsholders, which
include songwriters and musicians, get fairly paid for the creative works and
intellectual property under their ownership.
This, alongside the strategy to divert revenues from the core business to fund
TCAT, meant revenues grew only slightly to £2.8 million (H1 2023: £2.7
million). £2.6 million of this was generated from royalty payments derived
from our portfolio of high quality digital music rights with a proven vintage
and income performance. Net revenues were flat at £1.8 million.
Alongside the allocation of resources to TCAT, there has also been a focus on
delivering cost efficiencies within the subsidiary business, which helped
deliver a 14% increase in EBITDA to £0.9 million (H1 2022: £0.8 million).
Excluding the TCAT investment, the core business of digital rights performed
positively delivering a standalone EBITDA of £1.1 million.
Net margin has also been maintained at 67%, while EPS is also in line with the
equivalent period last year, at 0.08p.
As at 30 April 2024 the Group's cash balance was £0.9 million (H1 2023: £2.2
million) and while borrowings have continued to decrease, reducing from £1.7
million at the year end to £1.3 million as at 30 April 2024.
Alongside the continued positive performance, a final dividend for the 2023
year of 0.055p per share was distributed in June 2024, which was approved by
shareholders at the Company's Annual General Meeting held on 30 May 2024.
Operations and investments
The Group continues to monetise its portfolio of rights, with the highlights
of the period including the launch of a new record label, 'The Carolean', to
take advantage of the explosion in sales of vinyl records, which have just
posted their sixteenth consecutive year of growth in the UK. A recent report
from the Entertainment Retailers Association
(https://eraltd.org/news-events/press-releases/2024/uk-entertainment-sales-grow-7-to-119bn/)
showed vinyl sales grew by 17.8% in 2023, generating £177.3 million in
revenue.
One Media will use its Carolean record label to reissue some of the biggest
songs and artists from its 250,000-strong catalogue. Initial reissues include
collections from Mungo Jerry, whose global hit 'In the Summertime' remains
the joint-third biggest selling single of all time
(https://en.wikipedia.org/wiki/List_of_best-selling_singles#15_million_physical_copies_or_more)
(30 million sales), The Troggs, disco legend George McCrae and soul-reggae
star Judy Boucher.
In addition to the Carolean launch, 'The Magic Flute - Dies Bildnis ist
bezaubernd schön' from the Point Classics catalogue has been placed in the
highly acclaimed, American post-apocalyptic drama The Walking Dead: Dead City,
S1EP06. The episode aired 23 July 2023 on AMC.
The strategic focus on TCAT has restricted management's ability to invest in
new catalogues to build out the portfolio of rights. The most recent
acquisition, completed in September 2023 and comprising the licensor's income
share of the 'Entertain Me' catalogue of rights on an in-perpetuity basis, has
performed well and the returns multiple has been fully in line with
expectations.
Alongside the successful catalogues business, efforts to establish and grow
TCAT as the go to software platform to protect rightsholders from copyright
infringement have focused largely on enforcing cost efficiencies across the
business; investment in expanding its product offer to the industry; and
supporting the sales and marketing function.
The technology landscape is moving at a rapid pace, particularly now with the
acceleration in AI capabilities and corresponding growth in specialist music
technology companies, whose singular mission is often well funded. The rapid
growth of this change is making the development of TCAT more challenging,
given the current restrictions in funding. The strategy for the business
remains under review, including the possibility of combining with a partner
whose sole expertise lies in AI driven music technology, in light of the Board
and management's primary duty to its shareholder base.
Environmental, social and governance
ESG continues to form a fundamental part of our corporate strategy. We fully
recognise the importance of environmental stewardship, social responsibility
and good governance as custodians of your company and best practice business
operators.
As ever, we remain committed to upholding the highest standards of corporate
governance, transparency and ethical business practices. Our Board of
Directors and management team work within a strong governance framework,
ensuring that we operate with integrity and, at all times, in the best
interests of our shareholders.
We actively engage with local communities on an ongoing basis 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 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 outlined in the 2023 annual results, the outlook for the music industry is
positive, boding well for the investment proposition of our core business.
We are confident in the quality of our portfolio, supported by the ability of
the experts we have within the One Media team, is very well positioned to
benefit from these structural tailwinds and the growing popularity and
longevity of artists and music with an older vintage.
Finally, I would like to express gratitude to the management team for their
hard work and of course to our shareholders for their ongoing support.
Claire Blunt
Chairman
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2024
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended 31 October 2023
30 April 2024 30 April 2023
£ £ £
Revenue 2,755,829 2,731,644 5,363,434
Distribution charges (570,789) (572,920) (1,134,118)
Royalty costs (227,609) (227,917) (420,736)
Other costs (117,946) (110,088) (314,523)
_________ _________ _________
Net revenue 1,839,485 1,820,719 3,494,057
Amortisation of catalogues (507,691) (408,353) (853,215)
Administration expenses (995,609) (1,094,913) (2,111,708)
FOREX gains 13,930 24,696 (30,996)
_________ _________ _________
Operating profit 350,115 342,149 498,138
Share based payments - - (68,634)
Finance costs (63,552) (66,411) (139,996)
Finance income - - -
_________ _________ _________
Profit on ordinary activities before taxation 286,563 275,738 289,508
Tax expense (103,328) (110,033) (184,597)
_________ _________ _________
Profit for period attributable to equity shareholders and total comprehensive 183,235 165,705
income for the period
104,911
========= ========= =========
Basic earnings per share 0.08p 0.07p 0.05p
========= ========= =========
Unaudited Consolidated Statement of Financial Position
As at 30 April 2024
Unaudited Unaudited Audited
30 April 2024 30 April 2023 31 October 2023
£ £ £
Assets
Non-current assets
Intangible assets 15,651,830 14,384,649 15,723,653
Property, plant and equipment 24,902 25,940 55,650
_________ _________ _________
15,676,732 14,410,589 15,779,303
_________ _________ _________
Current assets
Trade and other receivables 1,810,328 1,546,820 1,614,573
Cash and cash equivalents 850,044 2,157,169 1,243,445
_________ _________ _________
Total current assets 2,660,372 3,703,989 2,858,018
_________ _________ _________
Total assets 18,337,104 18,114,578 18,637,321
========= ========= =========
Liabilities
Current liabilities
Trade and other payables 1,464,968 1,030,698 1,776,971
Deferred tax 236,468 158,253 236,468
_________ _________ _________
1,701,436 1,188,951 2,013,439
Borrowings 1,326,521 1,685,210 1,497,970
_________ _________ _________
Total liabilities 3,027,957 2,874,161 3,511,409
_________ _________ _________
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 428,207 504,399 428,207
Retained earnings 4,044,586 3,899,664 3,861,351
_________ _________ _________
Total equity 15,309,147 15,240,417 15,125,912
_________ _________ _________
_________ _________ _________
Total equity and liabilities 18,337,104 18,114,578 18,637,321
========= ========= =========
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 April 2024
Share capital Share redemption reserve Share premium Share based payment reserve Retained earnings Total equity
£ £ £ £ £ £
At 1 November 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 - - - - - -
________ _________ _________ ________ _________ _________
At 30 April 2023 1,112,231 239,546 9,484,577 504,399 3,899,664 15,240,417
Share based payment adjustment - - - (144,826) 144,826 -
Dividends paid - - - - (122,345) (122,345)
Profit for the six months to - - - - (60,794) (60,794)
31 October 2023
Share based payment charge - - - 68,634 - 68,634
________ _________ _________ ________ _________ _________
At 31 October 2023 1,112,231 239,546 9,484,577 428,207 3,861,351 15,125,912
Proceeds from the issue of new shares - - - - - -
Profit for the six months to - - - - 183,235 183,235
30 April 2024
Share based payment charge - - - - - -
________ _________ _________ ________ _________ _________
Balance at 30 April 2024 1,112,231 239,546 9,484,577 428,207 4,044,586 15,309,147
======== ========= ========= ======== ========= ========
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 April 2024
Unaudited Unaudited Audited
6 months 6 months 12 months ended
ended ended 31 October 2023
30 April 2024 30 April 2023
£ £ £
Cash flows from operating activities
Profit before taxation 286,564 275,738 289,508
Amortisation 507,691 408,353 853,215
Depreciation 27,496 25,571 59,568
Share based payments - - 68,634
Finance income - - -
Finance costs 63,552 66,411 139,996
(Increase)/decrease in receivables (195,756) (74,451) (152,021)
(Decrease)/increase in payables (395,813) (72,802) 783,172
Corporation tax paid - (6,108) (144,866)
_________ _________ _________
Net cash inflow from operating activities 293,734 622,712 1,897,206
_________ _________ _________
Cash flows from investing activities
Investment in copyrights / licenses (206,805) (72,791) (1,385,329)
TCAT development (225,811) (282,181) (753,507)
Investment in fixed assets - (38,512) (67,950)
Finance income - - -
_________ _________ _________
Net cash used in investing activities (432,616) (393,484) (2,206,786)
_________ _________ _________
Cash flow from financing activities
Finance cost paid (64,519) (57,722) (125,813)
Bank loan - - -
Loan notes repayment (190,000) (190,000) (374,480)
Loan notes - - -
Dividend paid - - (122,345)
_________ _________ _________
Net cash (outflow) from financing activities (254,519) (247,722) (622,638)
_________ _________ _________
Net change in cash and cash equivalents (393,401) (18,494) (932,218)
Cash at the beginning of the period 1,243,445 2,175,663 2,175,663
_________ _________ _________
Cash at end of the period 850,044 2,157,169 1,243,445
========= ========= =========
Notes to the Interim Report
For the six months ended 30 April 2024
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 2023 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 2024. 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 2023.
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 2023 and the audited twelve months figures for the year
ended 31 October 2023.
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 2024 is shown below:
Licenses TCAT Total
Income statement £ £ £
Revenue 2,607,955 147,874 2,755,829
Distribution charges (570,789) - (570,789)
Royalty costs (227,609) - (227,609)
Other costs (77,979) (39,967) (117,946)
Net revenue 1,731,578 107,907 1,839,485
Amortisation (415,943) (91,748) (507,691)
Administration expenses (696,859) (298,750) (995,609)
Foreign exchange gains 15,109 (1,179) 13,930
Operating profit 633,885 (283,770) 350,115
Finance costs (63,552) - (63,552)
Profit / (loss) before taxation 570,333 (283,770) 286,563
Tax expense (103,328)
Profit for the period 183,235
Licenses TCAT Eliminations Total
Total assets and liabilities £ £ £ £
Total assets 18,345,625 3,346,802 (3,355,323) 18,337,104
Total liabilities (3,010,797) (3,372,483) 3,355,323 (3,027,957)
Total segment net assets/ (liabilities) 15,334,828 (25,681) - 15,309,147
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 2024 Unaudited 30 April 2023 Year ended
31 October 2023
£ £ £
Licenses and other media intellectual property 5,027,137
2,607,955 2,550,124
TCAT 147,874 181,520 336,297
2,755,829 2,731,644 5,363,434
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 2024 30 April 2023 31 October 2023
Profit for period attributable to equity shareholders 183,235 165,705 104,911
Weighted average number of shares in issue at period end 222,446,249 222,446,249 222,446,249
_________ _________ _________
Basic earnings per share 0.08p 0.07p 0.05p
========= ========= =========
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 2024 30 April 2023 31 October 2023
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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