REG-One Media iP Group Plc: Final Results
31/03/2021 07:05
31 March 2021
One Media IP Group Plc
(“One Media”, “the Company” or the “Group”)
Final Results and Notice of AGM
Milestone Year. EBITDA up 38%. Strong Cash in Bank
One Media iP (AIM:OMIP), the digital media content provider which exploits
intellectual digital property rights around music, video and copyright
technology, announces its Full Year Results for the 12-month period ended 31
October 2020.
Financial Highlights
· Revenue increased 14% to £4.0 million (2019: £3.5 million)
· EBITDA increased 38% to £1.49 million (2019: £1.07 million)
· Operating profit increased 16% to £1.02 million (2019: £0.88
million)
· Cash at 31 October 2020 of £6.8 million (2019: £0.9 million)
· Cash placing of £6 million in August 2020
· Final dividend declared of 0.055p per share
Operational and Post-Period Highlights
* Formation of TCAT Limited subsidiary and recruitment of the team; part of
TCAT’s next phase of development to become a leading anti-piracy service
* Acquisition of Take That producer royalties including 'A Million Love
Songs', 'Could It Be Magic' and 'I Found Heaven'
* Launch of new Men & Motors TV channel, hosted by Boyzone’s Shane Lynch and
One Second in F1 Racing’s Torie Campbell
* Acquisition of the licensor’s share of the royalties to the 21 Vision
catalogue of rights, which contains over 2,000 recordings including Glenn
Millar, The Andrews Sisters, The Ink Spots, Vera Lynn, Count Basie, Flanagan &
Allen and Cole Porter
Michael Infante, CEO of One Media iP, commented:
“I am pleased to report another successful year of growth for the Company.
The year under review could have been a most unpredictable and turbulent time
for any small business operating under COVID-19, but even in the midst of
challenges our music business model saw its EBITDA grow by 38%.
“Separating TCAT (www.tcat.media) from the core business underpins our two
activities. Primarily, the core business of the Group, being the continuation
of content exploitation within our genres, offers a bespoke ‘antipiracy
detection’ service not only to ourselves, but also the music industry at
large. TCAT, we believe, can become a major player to both record labels and
artists alike, whose content is exploited in over 167 territories globally
within the 130 million-music tracks traded daily on digital stores.
“As 2021 progresses, and further to our successful fundraise of £6 million,
Harmony iP www.harmonyip.com is being offered as an alternative method of
allowing copyright holders to partially cash-out and partner with One Media,
taking a share in the asset income and giving TCAT care to the content now
under joint ownership. This both enhances the contents’ future earning
ability and gives the original owner an opportunity to participate in the
growth of future earnings of their life’s work. Working in unison for the
first time, with both author and label, sees a joint mission of ensuring
transparency in the future values of content. I remain excited for the future
and, as always, grateful for the experienced team of directors, staff,
consultants and professionals within across the Group whom have contributed to
our continued success.”
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 Hartley / Max Gould (Corporate Finance) Michael Johnson (Sales) Tel: +44 (0)20 7397 8900
Yellow Jersey PR PR and IR
Dominic Barretto Tel: +44 (0)20 3004 9512
Chairman’s Statement
The Company continues to trade in line with market expectations, despite the
ongoing macro challenges and we are pleased to report revenues for year of
£4.0 million and EBITDA of £1.49 million, an increase of 14% and 38%,
respectively, on the prior year. One Media retains a strong cash position with
an audited cash balance of £6.8 million as at 31 October 2020.
Following the successful fundraising in August 2020, the Company continues to
evaluate acquisition opportunities to be executed, primarily, through its
Harmony IP asset release programme, as well as full catalogue acquisitions.
We remain encouraged to observe that the sector continues to attract
significant investment from outside of the industry, which we believe will
help to build further interest in our business and strategy.
The safety and well-being of our employees remains paramount and we have
successfully operated within all government and Public Health England
guidance at all times. Our employees work in an agile and flexible way,
operating remotely and from our Pinewood offices, and we all look forward to
more normalised days ahead.
Claire Blunt
Non-Executive Chairman
Chief Executive’s Statement
The Company reported a milestone fundraising of £6 million in August 2020 to
fund the acquisition of exclusive rights to create and expand digital assets
over a portion of copyrights in performance and writers’ shares, primarily
through the Harmony iP asset release program. It remains paramount to the
Board not to rush M&A activities and remain highly selective, keeping in mind
the best interest of all shareholders.
In November 2020, the Company reported that it had incorporated a new
subsidiary, TCAT Limited, and appointed an experienced management team for its
Technical Copyright Analysis Tool (“TCAT”).
TCAT is a ‘Software as a Service’ (SaaS) platform, which was developed
in-house at One Media to detect copyright infringement within legitimate
digital music stores. The creation of the subsidiary is part of TCAT’s next
phase of development to become a leading anti-piracy service for the music
industry. Piracy costs the UK economy £9 billion a year, according to a 2019
report by the government's Intellectual Property Office.
TCAT currently provides a range of services to two major record labels and the
world’s largest media distributor on a retained basis, and its services are
also used by organisations that represent the interests of the recording
industry worldwide. TCAT Limited is based in Belfast, a leading technology hub
with a large pool of highly qualified employees. TCAT is eligible for
financial government support from the regional development agency, Invest
Northern Ireland.
In January 2021, and to much fanfare from the UK media, the Company announced
that it had acquired the producer royalties of a selection of tracks by one of
the most renowned pop groups in the world, Take That, from Ian Levine, British
songwriter, producer and DJ.
Take That has achieved 28 top 40 singles and 17 top 5 singles in the UK
Singles Chart since the band's formation in Manchester in 1990, 12 of which
have reached number one, including 'Back for Good' and 'Greatest Day'. The
Group has also had eight number one albums on the UK Albums Chart.
Internationally, Take That has had 56 number one singles and 39 number one
albums, and has received eight Brit Awards and an Ivor Novello Award.
As part of the deal, One Media has acquired the producer royalties of great
hits 'A Million Love Songs', 'Could It Be Magic' and 'I Found Heaven', all
from Take That's 1992 debut studio album, Take That & Party, which has been
certified two-times platinum in the UK. The Company has also acquired the
producer royalties of two other recorded Take That tracks which have never
been released.
Earlier in the calendar year, the Company announced the launch of a new Men &
Motors TV channel, hosted by Shane Lynch, best known as a member of Boyzone,
and Torie Campbell, best known for fronting One Second in F1 Racing.
The channel, which will deliver an additional income stream for One Media from
advertising revenue (ad-funded) and sponsorship, will air the best shows from
its comprehensive archive of 3,400 automotive videos in a new on-demand format
to engage the next generation of car enthusiasts. The channel went live on 1
February 2021.
The Company acquired the rights to Men & Motors from Granada Television
Productions and ITV Digital Channels in 2012, following 15 years as one of the
UK’s most popular and celebrated channels that helped launch the careers of
the likes of Richard Hammond and John Inverdale. During 2020, Men and Motors
achieved 134 million minutes of viewing on YouTube equating to 2.5 million
viewing minutes per week.
Last month saw the acquisition of the licensor’s share of the royalties to
the 21 Vision catalogue of rights (‘the Catalogue’), which contains over
2,000 recordings from some of the all-time music greats from over the last
seven decades.
Since 2009, the Catalogue has been licensed to One Media on a royalty-sharing
basis. As part of the deal, One Media has acquired the licensor's royalty
share of the catalogue on an in perpetuity basis, which allows the Company to
continue to exploit the catalogue via all of its digital mediums and collect
all revenues associated with the licence.
The Catalogue includes rare music concerts and live recordings performed
by over 70 artists who, since the digital era began, have a renewed
popularity as they are rediscovered by growing global audiences. Such
performers include Glenn Millar, The Andrews Sisters, The Ink Spots, Vera
Lynn, Count Basie, Flanagan & Allen and Cole Porter, music reminiscent of the
Dads Army generation (over 60+) whose age group now form 29% of digital
streaming consumers according to Statista.
Financial Overview
The year under review has seen revenues grow by 14% to £4,005,385 (2019:
£3,508,891) and our EBITDA by 38% to £1,485,645 (2019: £1,076,724), driven
by increased consumer demand on streaming platforms and other revenue
distributions from digital platforms.
Operating profit is also up to £1,018,924, a notable increase over our 2019
figure of £878,914. At the end of the period, our cash balance was
£6,766,424 (2019: £860,611). Our Gross margin remains robust at c.50% and
overheads for the year are reported at £979,723 (2019: £1,016,010). The
gross profit, excluding amortization, shows strong catalogue performance of
£2,459,352 (2019: £2,085,850) an increase of 18%.
A profit after tax attributable to equity shareholders of £630,197 (2019:
£458,444) is reported for the financial year, reflective of an increase in
revenues and the maintenance of strong margins. This performance enabled the
payment of a dividend in the period of £74,582 (2019: £nil). The corporation
tax expense of £103,846 in the period (2019: £88,778) includes Research and
Development allowances available to the Group.
Development work on TCAT is progressing and has moved to the next phase,
including the incorporation of a new subsidiary and the appointment of an
experienced management team. At the period end the value invested in TCAT was
£1,062,054.
The Board continues to review its dividend policy, especially given the
current economic climate, but looks to maintain an equilibrium between
retention of profit to finance long-term growth plans whilst rewarding
shareholders for their support. This was supported by the payment of a
dividend during the year.
On the back of the Group’s annual profit, the directors have declared a
final dividend for year ended 31 October 2020 of 0.055p per share, the details
of which will be separately announced, subject to shareholder approval at the
Company’s forthcoming annual general meeting. The continued steady growth
delivered by the Group shows encouragement for the continuation of future
dividends.
Outlook
One Media enters H1 2021 with a strong cash balance and continues to
capitalise on the evolving music streaming market.
The music market at large has attracted much attention from investment
communities globally. We have seen companies successfully investing in music
catalogues ‘Intellectual Property’ (IP) and rapid growth in values of
existing recurring monetary income streams, largely attributed to the
recognition that music income is now seen as a robust form of investment and
return.
In 2020, the industry was yielding $20.5 billion (IFPI Source) with a
forecasted growth to 2030 of circa $40 billion. Consumers’ appetite for
streaming, whether advert-funded or subscription, is growing, not just because
of the recent pandemic restrictions but because there is now little audience
fall off as there was with the old physical formats such as CD or tape.
Previously, buying habits were age led with teenagers being the larger
consumers and tapering off with age. Now consumers may change their supplier
but their content demands are met by most of the major digital stores such as
Amazon, Spotify, YouTube and Apple. Each store offers all genres of music
with very little differences in the number of tracks available. It is only
financial enticements that educe consumers to shop between digital music
suppliers – not the content being offered.
We look forward to updating shareholders on progress in due course as we head
into another year of global digital growth.
Michael Infante
Chief Executive and Founder
Consolidated Statement of Comprehensive Income
For the year ended 31 October 2020
Note Year ended 31 October 2020 Year ended 31 October 2019
£ £
Revenue 1 4,005,385 3,508,891
Cost of sales (2,069,203) (1,756,464)
Gross profit 1,936,182 1,752,427
Administration expenses (916,298) (873,513)
Operating profit 2 1,019,884 878,914
Share based payments 15 (62,465) (142,497)
Finance costs 3 (223,384) (189,322)
Finance income 3 8 127
Profit on ordinary activities before taxation 4 734,043 547,222
Tax expense (103,846) (88,778)
Profit for period attributable to equity shareholders and total comprehensive income for the year 630,197 458,444
Basic earnings per share 7 0.42p 0.34p
Diluted earnings per share 7 0.33p 0.26p
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 2020
Share Capital Share redemption reserve Share premium Share based payment reserve Retained earnings Total equity
£ £ £ £ £ £
At 1 November 2018 678,018 239,546 4,314,220 222,259 1,981,765 7,435,808
Share based payment charge - - - 142,497 - 142,497
Profit for the year - - - - 458,444 458,444
At 1 November 2019 678,018 239,546 4,314,220 364,756 2,440,209 8,036,749
Proceeds from the issue of new shares 431,713 - 5,159,107 - - 5,590,820
Share based payment charge - - - 62,465 - 62,465
Profit for the year - - - - 630,197 630,197
Dividends paid - - - - (74,582) (74,582)
At 31 October 2020 1,109,731 239,546 9,473,327 427,221 2,995,824 14,245,649
Consolidated Statement of Financial Position at 31 October 2020
Note At 31 October 2020 At 31 October 2019
£ £
Assets
Non-current assets
Intangible assets 8 8,884,158 8,900,408
Property, plant and equipment 9 91,260 7,648
8,975,418 8,908,056
Current assets
Trade and other receivables 11 1,141,555 987,054
Cash and cash equivalents 12 6,766,424 860,611
Total current assets 7,907,979 1,847,665
Total assets 16,883,397 10,755,721
Liabilities
Current liabilities
Trade and other payables 13 823,151 1,011,131
Deferred tax 14 117,356 85,573
Total current liabilities 940,507 1,096,704
Borrowings 21 1,697,241 1,622,268
Total liabilities 2,637,748 2,718,972
Equity
Called up share capital 15 1,109,731 678,018
Share redemption reserve 239,546 239,546
Share premium account 9,473,327 4,314,220
Share based payment reserve 427,221 364,756
Retained earnings 2,995,824 2,440,209
Total equity 14,245,649 8,036,749
Total equity and liabilities 16,883,397 10,755,721
Consolidated and Company Cash Flow Statement
For the year ended at 31 October 2020
Year ended 31 October 2020 Group Year ended 31 October 2019 Group Year ended 31 October 2020 Company Year ended 31 October 2019 Company
£ £ £ £
Cash flows from operating activities
Operating profit before tax 734,043 547,222 (57,627) (70,475)
Amortisation 523,170 332,423 - -
Depreciation 18,504 7,885 - -
Share based payments 62,465 142,497 (38,560) 142,497
Finance income (8) (127) (3) (115)
Finance costs (Increase) in receivables 223,384 (162,150) 189,322 (306,094) - 275,472 189,322 (4,453,635)
Increase/(decrease) in payables (238,909) 333,210 178,193 (75,903)
Corporation tax paid (127,735) - - -
Net cash inflow (outflow) from operating activities 1,032,764 1,246,338 357,475 (4,268,309)
Cash flows from investing activities
Investment in intellectual property rights and TCAT (506,919) (5,881,529) - -
Investment in property, plant and equipment (102,117) (3,310) - -
Finance income 8 127 3 115
Net cash used in investing activities (609,028) (5,884,712) 3 115
Cash flows from financing activities
Net proceeds from the issue of new shares 5,590,820 - 5,590,820 -
Finance cost paid (109,136) (99,404) (109,136) (99,404)
Loan notes 74,975 22,010 74,975 22,010
Dividend paid (74,582) - (74,582) -
Net cash inflow (outflow) from financing activities 5,482,077 (77,394) 5,482,077 (77,394)
Net change in cash and cash equivalents 5,905,813 (4,715,768) 5,839,555 (4,345,588)
Cash at the beginning of the year 860,611 5,576,379 548,492 4,894,080
Cash at the end of the year 6,766,424 860,611 6,388,047 548,492
Notes to the Preliminary Results
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.
Year ended 31 October 2020 Year ended 31 October 2019
£ £
Analysis of the charge for the year
UK corporation tax charge 72,063 61,779
Deferred tax 31,783 26,999
103,846 81,488
The standard rate of tax for the year, based on the UK standard rate of
corporation tax is 19% (2019: 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 31 October 2020 Year ended 31 October 2019
£ £
Profit on ordinary activities before tax 734,043 547,221
Tax on profit on ordinary activities at 19% (2019: 19%) 139,468 103,972
Effects of:
Non-deductible expenses 14,869 29,624
Adjustments to tax charge in respect of previous periods - 1,696
Fixed asset timing differences 31,783 26,999
Depreciation in excess of capital allowances (4,430) (4,109)
Share scheme deduction
Research and development (77,844) (69,404)
Total tax charge 103,846 88,778
Earnings per share
The weighted average number of shares in issue for the basic earnings per
share calculations is 149,252,562 (2019: 135,603,699) and for the diluted
earnings per share assuming the exercise of all warrants and share options is
189,047,539 (2019: 173,237,032).
The calculation of basic earnings per share is based on the profit for the
period of £630,197 (2019: £458,444). Based on the weighted average number of
shares in issue during the year of 149,252,562 (2019: 135,603,699) the basic
earnings per share is 0.42p (2019: 0.34p). The diluted earnings per share is
based on 189,047,539 shares (2019: 173,237,032) and is 0.33p (2019: 0.26p).
EBITDA
Profit from continuing activities before interest, tax, depreciation and
amortisation for the twelve months ended 31 October 2020 was £1,485,645
(2019: £1,076,724).
Directors’ responsibilities
The Annual Report, including the financial information contained therein, is
the responsibility of, and was approved by the directors on 30 March 2021.
Availability of Report and Accounts and Notice of the Annual General Meeting
Copies of the Company’s Report and Accounts together with the Notice of the
Annual General Meeting, to be held at 11.00 a.m. on Thursday 13 May 2021, will
be posted to shareholders shortly. Please note that arrangements for the AGM
this year are different from those of previous years. As we expect significant
restrictions on personal movement to still be in place due to Covid-19, we are
utilizing provisions in our articles of association, and certain associated
discretionary powers for the orderly conduct of meetings, to facilitate the
holding of the meeting on an electronic platform. Accordingly, this year’s
AGM will be an electronic meeting only. All voting at the resolutions at the
AGM will be conducted on a poll which means that you should submit your proxy
as soon as possible. We ask that all question which shareholders wish to raise
be submitted toagm@onemediaip.com in advance. The platform that we will be
using will allow shareholders the option to submit a separate poll card as
they "exit" the electronic meeting but, to ease administration, we request
that proxies be lodged in advance wherever possible. Full details of the
operation and arrangements for the AGM are set out in the Notice of AGM. We do
not intend to make this arrangement permanent, as we value the opportunity to
meet our shareholders in person. To that end we anticipate organising an
informal shareholder meeting once restrictions on movement are lifted and it
is safe to do so. 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.
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation.
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