REG-One Media iP Group Plc: Half-year Report <Origin Href="QuoteRef">OMIP.L</Origin>
27/06/2017 07:05
One Media iP Group Plc
("One Media", the "Group” or the “Company")
UNAUDITED INTERIM RESULTS
One Media iP Group Plc (AIM: OMIP), a digital media content provider that
exploits intellectual property rights around music and video, is pleased to
announce its half year results for the period ended 30 April 2017.
Highlights:
· Turnover of £1,147,131 (2016: £1,055,693); (+ 8.7%)
· Profit before tax of £148,781 (2016: £118,721); (+25.3%)
· EBITDA of £264,935 (2016: £224,143); (+18.2%)
· Cash balances of £228,628 at 30 April 2017 (£335,664 at 31
October 2016).
Michael Infante, Chairman and CEO, commented: “I am pleased to report a
steadying of the ship and early indications that we are beginning to see our
repositioned business model starting to benefit from the effect of ‘digital
audio streaming’ gaining traction over ‘digital audio downloads’. I have
previously explained the seismic shift in our audio monetisation model and its
consequential degradation on our revenues over the last two years. The Group
has been very vocal and transparent on this and I have gone to lengths to
explain this in my previous Chairman’s statements. The indication is that we
are at an inflection point and that growth is back on the horizon. Combine
this with our new initiatives in TCAT and Men & Motors, together with our core
business and we are beginning to demonstrate early momentum for our growth
strategy. We predicted that Q1 2017 would be the beginning of the ‘streaming
monetisation’ insurgency against ‘downloads’ and that we would begin to
feel the benefit of those effects moving forward. I continue to have
confidence in our market approach and our new music, video and technical
related initiatives are well positioned to retain our mission of ‘IP’
exploitation, growth and continued profit.”
For further information, please contact:
One Media iP Group Plc
Chairman and Chief Executive Michael Infante Tel: +44 (0)175 378 5501
One Media iP Group Plc Alice Dyson-Jones Communications Tel +44 (0)175 378 5500
Cairn Financial Advisers LLP Nominated Adviser
Liam Murray / Jo Turner Tel: +44 (0)20 7148 7900
Panmure Gordon (UK) Limited Broker Karri Vuori /James Stearns Tel: +44 (0)20 7886 2500
CHAIRMAN & CHIEF EXECUTIVE’S STATEMENT
The global political upheavals serve as a reminder that change occurs faster
than markets can sometimes anticipate. With keen direction and attention to
detail the Group has taken the challenge of meeting its market expectation.
The team has focussed on embracing the audio shift and have used our expertise
to accelerate the changeover. We can’t direct consumers to work within the
timescale we set for the balance to shift in monetisation of our audio
consumption, but what we can do is ensure that all our content, where
possible, is being offered on every new and existing streaming store (such as
Apple Music, Spotify, Amazon, Deezer and Google Play) as they come to market
with their expanded streaming services.
Industry revenues in the UK grew by 1.5% to £926m (source BPI Official Charts
Company) to December 2016. Trade revenues for recorded music are anticipated
to reach a growth rate of 5.1% and our own figures would appear to support
this swing back to growth. The increase in streaming has attracted many
negative headlines over the last few years. We have always been a supporter of
the streaming model, despite its initial adverse effect on our revenues and
believe it must be embraced not resisted (in the words of the Borg
“Resistance is Futile”) One Media however deals in the world-wide market
and according to the BPI revenues have grown by 5.9% globally. Global revenues
revealed by the IFPI reports that by December 2016 there were 112m users of
paid music streaming subscriptions. The UK remained at third place in global
table behind the USA and Japan. The USA (One Media’s strongest market) has
grown by 7.6%. The total world market in music is now valued at $15.6bn (US
Dollars) up 5.9% from the previous year. Global revenue data, as of December
2016, confirmed digital sales (including downloading and streaming) were 50%
of the total market at USD$7.835 bn. Physical Sales (CDs & Vinyl formats
included) 34% at $5.3278bn. Synchronisation sales (music for advertising film
& TV 2% at $0.3134bn, Performance Rights (Concerts, Radio & TV play ) 14% at
£$2.1938 (source BPI/IFPI).
We have taken a consolidative view of the market whilst the buying trends
shift. We are preserving our resources regarding content acquisition until the
merry-go-round settles. I believe there will be some bargains on the horizon.
We are underpinning existing contracts by extending existing rights and
ensuring that our library of rights remains robust.
On 25 January 2017 we announced that we had renewed the exclusive rights to
the MD Production music catalogue for a recoupable advance of $18,000
(eighteen thousand US Dollars). The MD catalogue comprises over 1,000 original
recordings from the 1960s to the 1980s. With performances from artists such as
Don Fardon, The Cockerel Chorus, Dando Shaft, Gill Scott-Heron, Greyhound, Roy
Harper, Johnny Kidd & the Pirates, Kenny and Python Lee Jackson to name just a
few. The tracks have been marketed exclusively by One Media since 2007 on a
royalty-sharing basis. MD Productions has been a long-term music provider and
has received three advances and on-going royalties from One Media throughout
the term. One Media is pleased to report that it has always fully recouped
its advances throughout the relationship.
On 30 January 2017 we started work on reorganising the Group’s websites.
Five new websites were created demonstrating the Group’s expanded
activities. Firstly we have the new site; One Media iP Group Plc
(http://www.omip.co.uk/). Here you will find all the investor relation
information and dedicated summaries of the Group’s subsidiaries. The
day-to-day activities, artist information and social media activities of our
audio and video businesses is now housed under http://www.onemediaip.com/. Our
Technical Copyright Analysis Tool (TCAT) is at (http://www.tcat.media/). Here
you will find our informational video on the ‘Software as a Service’
(SaaS) technology. Men & Motors can be found on (www.menandmotors.com) a new
and exciting style for this site showing the links to the archive of over 3400
shows and information on our initiative for a new format of TV show still
being presented to various broadcasters. Point Classics, our classical
collection of over 3000 recordings (http://www.pointclassics.com/) is now the
new home for this collection. Music supervisors use this site to sort, search
and compile classical recordings for film and TV. We are pleased to report
that all of the work in creating the new sites was completed on time and
within budget.
It is the Group’s intention to expand the exploitation for the corporate
brands that it now owns and to more clearly define their individuality
trade-wise in the coming year. Men & Motors by way of example has already been
registered (albeit dormant), as a stand-alone subsidiary company in
preparation for broadcast and trading demand. The same applies for TCAT and
the Group has registered TCAT Ltd should this be required in the future.
On 1 February 2017 we announced that we had moved our banking services to
Coutts & Co ("Coutts") of 440 Strand, London. We commenced the orderly
handover from Barclays to Coutts during February 2017. The Group confirmed at
the time that it has no debt and is cash resourced. Coutts experience within
media and content with many focussed services and seminars should prove
invaluable to the Group with its expansion programme into varying media and
technology activities.
In two statements on 20 February 2017 and on 12 April 2017, the Group
announced that it had concluded its copyright complaint and litigation in the
Middle District of Tennessee with HHO Licensing Ltd, Henry Hadaway
Organisation Ltd and Henry Hadaway personally by way of an amicable
resolution.
Post the half year end on 30 April 2017 the Group announced that One Media
signed an exclusive exploitation deal with Getty Images for 'clips' from the
Group’s moving image library rights. The deal will involve One Media
supplying ‘clips’ from its growing video content library to Getty Images
for representation and exploitation to Getty’s worldwide client base for
multiple use in documentaries, advertising and all moving image usages. Getty
Images is one of the most esteemed sources of visual content throughout the
world, with over 200 million assets available through its industry-leading
sites www.gettyimages.com and www.istock.com. The distribution deal will see
the Group create thousands of clips from its archive to be made available to
Getty Image’s clients on their web based platforms. The Group’s video
archive has grown by acquisition over that last few years and we are now able
to further exploit the content via a ‘clipping’ service and to supply the
world leader in image hire. The Group’s Creative Technicians are already
trained and equipped to perform this function in-house and have been
successful in building billions of views with the Company’s content for
sites like You Tube. Content from Men & Motors, Alien Autopsy and the HiBrow
film catalogue together with our cleared music video content will spearhead
the service.
On 25 May 2017 we announced that we had signed our first major music
distributor to utilise the services of the Group’s Technical Copyright
Analysis Tool (“TCAT”). The global music distributor will be using the
TCAT services from June 2017 to monitor its weekly release schedules, monitor
music conflicts and potential copyright infringements. Following two years of
development the deal will see the commercialisation of TCAT on an annual
contract basis. Confidentiality clauses in the agreement prevents us from
disclosing the identity of our client at this time and any of the commercial
terms but the Group is very excited by having TCAT deployed as a technical
resource to a major record distributor. Whilst the revenues generated from
this initial contract will be modest, it is a significant development for the
Group as it validates and proves the technology and demonstrates its need in
the market place.
Results
The Group has continued to manage its financial position over the 6 month
period to 30 April 2017 with profitable operations and no debt.
Group consolidated turnover was £1,147,131 for the 6 months ended 30 April
2017 (2016: £1,055,693).
Profit before tax of £148,781 (2016: £118,721).
Cash balances at 30 April 2017 of £228,628 (2016: £335,664).
During the period, the Company has not issued new shares as consideration for
acquisitions and has used existing cash resources as consideration.
Litigation
The company has been informed of a pending action in the Southern District of
Florida Court USA for a claim by Kemar McGreor (KM) against Phoenix Music
International Ltd (PMI), Orchard Enterprises Ltd (OE) and One Media Ip Group
PLC (OMIP), for an alleged infringement of copyrights supplied by PMI to
both OE and OMIP. Phoenix Music International (a British company) entered
into a license agreement with Kemar McGreor for the licensing of certain music
rights on or about the 9th May 2011. PMI then entered into a deal with OE and
OMIP to act as distributors for the licensed content. The case is centered on
whether PMI had the rights to allow OE and OMIP to distribute the licensed
content. PMI have informed both OE and OMIP that they will robustly defend
this action. OMIP has a full indemnity from PMI on its distribution agreement
with PMI. PMI are meeting all the costs of the defence for OMIP and any costs
or settlements in the final outcome.
A representative from the Group will attend a mediation meeting on the 9th
October 2017 in Florida and will report the outcome of said mediation. A trial
date has been set for December 9 2017 failing mediation and/or settlement
between the parties.
Dividend
The Group continues to review the dividend policy in line with its cash
resources and requirements. No dividend is announced at this time.
News, Content Exploitation and Acquisitions
Understanding and underpinning where our revenues are generated and our
resources are best spent has been a priority. Maintaining cost controls,
motivating new and existing initiatives and resourcing the TCAT development
for exploitation is a continued project. We are recruiting more technical
staff in the second half and will build our ability not only to expect more
from TCAT but also review our internal operation in line with the skill set
required. We remain vigilant on content acquisition and as always will invest
where the Group can identify good opportunities.
Outlook
I have been transparent throughout the last two years regarding the
challenging times that the Group has faced. We still have concepts to prove.
We still have internal changes to make to meet the new demands as we advance
into becoming a more fully rounded digital group. It is an exciting time and I
know that we can meet those demands. We are here for the long run and continue
to invest our time, effort and ingenuity to make One Media a company of
substance.
I would like to thank our team both in-house, contracted and my co-directors.
I would especially like to express my thanks to our newly appointed Company
Secretary and Head of Finance, Steven Gunning for so ably embracing the
Group’s financial obligations and day to day running of our accounts
systems.
MICHAEL INFANTE
CHAIRMAN AND CHIEF EXECUTIVE
27 June 2017
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2017
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 30 April 2017 ended 30 April 2016 ended
31 October 2016
£ £ £
Revenue 1,147,131 1,055,693 2,045,652
Cost of sales (628,093) (601,080) (1,139,951)
_________ _________ _________
Gross profit 519,038 454,613 905,701
Administrative expenses (370,352) (336,083) (876,742)
_________ _________ _________
Operating profit 148,686 118,530 28,959
Finance income 95 191 1,060
_________ _________ _________
Profit on ordinary activities before taxation 148,781 118,721 30,019
Tax credit / (expense) (16,573) (23,744) 32,852
_________ _________ _________
Profit for period attributable to equity shareholders and total comprehensive income for the year 132,208 94,977 62,871
========= ========= =========
Basic adjusted earnings per share 0.19p 0.13p 0.09p
========= ========= =========
Unaudited Consolidated Statement of Financial Position
As at 30 April 2017
Unaudited Unaudited Audited
30 April 2017 30 April 2016 31 October 2016
£ £ £
Assets
Non-current assets
Intangible assets 3,394,925 3,338,237 3,394,134
Property, plant and equipment 5,230 7,787 6,452
_________ _________ _________
3,400,155 3,346,024 3,400,586
_________ _________ _________
Current assets
Trade and other receivables 447,690 478,174 463,574
Cash and cash equivalents 228,628 549,888 335,664
_________ _________ _________
Total current assets 676,318 1,028,062 799,238
_________ _________ _________
Total assets 4,076,473 4,374,086 4,199,824
========= ========= =========
Liabilities
Current liabilities
Trade and other payables 468,318 869,999 756,988
Deferred tax 22,532 - 5,960
_________ _________ _________
_________ _________ _________
Total liabilities 490,850 869,999 762,948
_________ _________ _________
Equity
Called up share capital 355,268 355,268 355,268
Share redemption reserve 239,546 239,546 239,546
Share premium account 1,457,645 1,457,645 1,457,645
Share based payment reserve 90,979 59,097 74,440
Retained earnings 1,442,185 1,392,531 1,309,977
_________ _________ _________
Total equity 3,585,623 3,504,087 3,436,876
_________ _________ _________
_________ _________ _________
Total equity and liabilities 4,076,473 4,374,086 4,199,824
========= ========= =========
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 April 2017
Share capital Share redemption reserve Share premium Share based payment reserve Retained earnings Total equity
£ £ £ £ £ £
At 1 November 2015 355,268 239,546 1,457,645 43,497 1,348,002 3,443,958
Profit for the six months to 30 April 2016 - - - - 94,977 94,977
Share option charge - - - 15,600 - 15,600
Dividends - - - - (50,448) (50,448)
________ _________ _________ _________ _________ _________
At 30 April 2016 355,268 239,546 1,457,645 59,097 1,392,531 3,504,087
Profit for the six months to - - - - (32,106) (32,106)
31 October 2016
Share based payment charge - - - 15,343 - 15,343
Dividends - - - - (50,448) (50,448)
________ _________ _________ _________ _________ _________
At 31 October 2016 355,268 239,546 1,457,645 74,440 1,309,977 3,436,876
Profit for the six months to 30 April 2017 - - - - 132,208 132,208
Share option charge - - - 16,539 - 16,539
________ _________ _________ _________ _________ _________
Balance at 30 April 2017 355,268 239,546 1,457,645 90,979 1,442,185 3,585,623
======== ========= ========= ========= ========= =========
There has been no issue of shares in the six months ended 30 April 2017.
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 April 2017
Unaudited Unaudited Audited
6 months ended 30 April 2017 6 months ended 30 April 2016 12 months
ended 31 October 2016
£ £ £
Cash flows from operating activities
Profit before taxation 148,781 118,721 30,019
Amortisation 112,998 103,633 209,365
Depreciation 1,222 1,980 4,002
Share based payments 16,539 15,600 30,943
Finance income (95) (191) (1,060)
(Increase)/decrease in receivables 15,884 (37,922) (23,320)
(Decrease)/increase in payables (288,670) (297,628) (290,186)
Corporation tax paid - - (57,900)
_________ _________ _________
Net cash inflow from operating activities 6,659 (95,807) (98,137)
_________ _________ _________
Cash flows from investing activities
Investment in copyrights (113,790) (118,547) (280,176)
Investment in fixed assets - (1,750) (2,436)
Finance income 95 191 1,060
_________ _________ _________
Net cash used in investing activities (113,695) (120,106) (281,552)
_________ _________ _________
Cash flow from financing activities
Dividend paid - (50,448) (100,896)
_________ _________ _________
Net cash outflow from financing activities - (50,448) (100,896)
_________ _________ _________
Net change in cash and cash equivalents (107,036) (266,361) (480,585)
Cash at the beginning of the period 335,664 816,249 816,249
_________ _________ _________
Cash at end of the period 228,628 549,888 335,664
========= ========= =========
Notes to the Interim Report
For the six months ended 30 April 2017
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 2016 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 2017. 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 2016.
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 2017 and the audited twelve months figures for the year
ended 31 October 2016.
3. Earnings per share
The calculation of the earnings per share is based on the profit for the
financial period divided by the weighted average number of shares in issue
during the period.
Unaudited Unaudited Audited
Basic earnings per share 6 months 6 months 12 months ended 31 October 2016
ended 30 April 2017 ended 30 April 2016
Profit for period attributable to equity shareholders 132,208 94,977 62,871
Weighted average number of shares in issue at period end 71,053,698 71,053,698 71,053,698
_________ _________ _________
Basic earnings per share 0.19p 0.13p 0.09p
========= ========= =========
The diluted earnings per share would be lower than the basic profit per share
as the exercise of warrants and options would be dilutive.
4. Share capital
Unaudited Unaudited Audited
30 April 2017 30 April 2016 31 October 2016
Group and company £ £ £
Authorised:
200,000,000 ordinary shares of 0.5p each 1,000,000 1,000,000 1,000,000
========== ========== ==========
Issued:
Ordinary shares of 0.5p each
71,053,698 ordinary shares of 0.5p each 355,268 355,268 355,268
========== ========== ==========
5. Interim statement
Copies of this statement are available from Group's registered Office at:
623 East Props Building, Goldfinger Avenue, Pinewood Road, Iver Heath,
Buckinghamshire, SL0 0NH.
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