REG-One Media iP Group Plc: Interim Results
26/07/2018 07:05
26 July 2018
One Media iP Group Plc
("One Media" or the "Group”)
INTERIM RESULTS
One Media iP Group Plc (AIM: OMIP), a digital media content provider that
exploits primarily music intellectual property rights, is pleased to announce
its unaudited results for the six months ended 30 April 2018.
Financial Summary
*
Revenue increased by 5.1% to £1,205,262 (H1 2017: £1,147,131)
*
Profit before tax increased by 43.3% to £213,144 (H1 2017: £148,781)
*
Gross margins improved to 48.9% (H1 2017: 45.3%)
*
EBITDA increased 28.8% to £341,294 (H1 2017: £264,935)
*
Earnings per share of 0.21p (H1 2017: 0.19p)
*
Cash balance of £880,267 at 30 April 2018 (31 October 2017: £383,051)
Operational Summary
*
Revenue increase driven primarily by growth in streaming of music
*
80% of revenues derived from the audio exploitation business
*
Second major international music company signed to utilise the services of the
Technical Copyright Analysis Tool (“TCAT”)
*
Ivan Dunleavy appointed as Chairman and Lord Michael Grade as Non-Executive
Director
Ivan Dunleavy, Chairman, commented: “In the first half of the year, One
Media has continued to make steady progress against its key performance
indicators compared with the same period last year. This is in no small part
due to the commitment of its executive team and staff. The music industry has
experienced continued growth, which has been led by the expansion in streaming
services and the advent of devices like the Amazon Echo (Alexa) and Google
Home. One Media continues to benefit from this shift that has led to consumers
changing their music buying habits and embracing streaming services. As a
result, the Board remains confident of expediting the scale up of the business
by exploiting the global growth of music streaming.”
Michael Infante, Chief Executive, added: “I said this time last year that we
had changes to make and I am happy to confirm that we have delivered on those
changes to position us to be able to move towards becoming a music publishing
business. A big part of our planning for this year was to add scale and to
that end we were fortunate to be joined by Lord Michael Grade and Ivan
Dunleavy as directors who bring significant experience and expertise that will
enable us to accelerate our growth. In the first half of this year, we also
bolstered our sales initiative to support our audio licensing opportunities
enabling us to report an increase in turnover and profit compared with the
first half of last year. We have also maintained a healthy cash position.
“We are navigating the ongoing shift from music downloads to streaming. All
eyes are on the growth of music listening and the only change is format –
the music content remains constant. Like the broader market, we are aligning
ourselves with these changes and making sure we are well-positioned for the
future. We are pleased with our progress and encouraged with the results of
our actions to grow One Media.”
For further information, please contact:
One Media iP Group Plc
Ivan Dunleavy, Chairman Michael Infante, Chief Executive +44 (0)175 378 5500
Cairn Financial Advisers LLP (Nominated Adviser)
Liam Murray, Jo Turner +44 (0)20 7213 0880
Panmure Gordon (UK) Ltd (Broker)
James Stearns, Andrew Potts +44 (0)20 7886 2500
Luther Pendragon Ltd (Financial PR)
Harry Chathli, Claire Norbury +44 (0)20 7618 9100
Operational Review
In the first half of the year, One Media continued to make steady progress
against its key performance indicators compared with the same period in 2017.
The Group saw its revenues increase by 5% compared with the previous year,
reflecting the sustained growth of the industry as consumers continue to
increase their music consumption through streaming services. Overall, 80% of
the Group’s revenues were from its audio exploitation business, with video
licensing making up the balance.
In February 2018, the Group announced that a second major international music
company had signed to utilise the services of TCAT to monitor music conflicts
and potential copyright infringements. Revenues from the use of TCAT are still
relatively small, however, management expects that it will be rolled out to
other organisations in the future as well as being used to monitor the
Group’s own music business and thereby starting to make an additional
contribution to revenues.
In April 2018, the Board was pleased to appoint Ivan Dunleavy as the Chairman
and Lord Michael Grade as a Non-Executive Director. This followed their equity
investment of £375,000 in the Group.
The IFPI (International Federation of the Phonographic Industry) Global Music
Report 2018, stated that the global recorded music market grew by 8.1% in
2017, which is its third consecutive year of growth since the IFPI began
tracking the market in 1997 – reflecting the industry’s return to growth.
The report also highlighted that streaming remains the main driver of revenues
and, for the first time, has become the single largest revenue source with 176
million users of paid streaming services contributing to year-on-year
streaming growth of 41.1%. In 2017, streaming accounted for 38.4% of total
recorded music revenue, according to the report. The Directors believe that
this growth in the market gives the Group a significant opportunity to take
advantage of the growth in streaming services.
Financial Review
The Group has continued to successfully manage its financial position over the
6-month period to 30 April 2018 through its profitable operations. The
Group’s consolidated revenue was £1,205,262 (H1 2017: £1,147,131) and
gross margins improved to 48.9% (H1 2017: 45.3%). During the period, foreign
exchange movements had an adverse impact on reported revenue of £13,500
compared with a £400 loss in H1 2017.
Profit before tax amounted to £213,144 (H1 2017: £148,781). As a result of
the Group’s business model, with a relatively fixed cost base, an increase
in revenue results in an even higher contribution to profit.
EBITDA increased to £341,294 (H1 2017: £264,935) and basic earnings per
share amounted to 0.21p compared with 0.19p for the equivalent period last
year despite an increase in the issued share capital of the Group from
71,053,698 shares in issue at 30 April 2017 to 87,353,698 at 30 April 2018.
Cash balances at 30 April 2018 were £880,267 (H1 2017: £228,628). In
November 2017, Lord Michael Grade and Ivan Dunleavy made an equity investment
totalling £375,000 in One Media. The Group also had a cash inflow from
operations during the period of £183,147 (H1 2017: £6,659).
Outlook
The momentum of the first half of 2018/19 has been sustained into the second
half as the Group continues to build on the steady progress achieved to date
to re-position itself. With the return to growth in the music industry and
sustained global expansion in music streaming, the Board remains confident in
its ability to expedite the scale up of the business and deliver shareholder
value.
Unaudited Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months ended 30 April 2018 6 months ended 30 April 2017 12 months ended 31 October 2017
£ £ £
Revenue 1,205,262 1,147,131 2,337,624
Cost of sales (615,835) (628,093) (1,281,897)
_________ _________ _________
Gross profit 589,427 519,038 1,055,727
Administrative expenses (376,288) (370,352) (758,311)
_________ _________ _________
Operating profit 213,139 148,686 297,416
Finance income 5 95 185
_________ _________ _________
Profit on ordinary activities before taxation 213,144 148,781 297,601
Tax expense (30,349) (16,573) (30,829)
_________ _________ _________
Profit for period attributable to equity shareholders and total comprehensive income for the year 182,795 132,208 266,772
========= ========= =========
Basic earnings per share 0.21p 0.19p 0.38p
========= ========= =========
Unaudited Consolidated Statement of Financial Position
Unaudited Unaudited Audited
30 April 2018 30 April 2017 31 October 2017
£ £ £
Assets
Non-current assets
Intangible assets 3,387,479 3,394,925 3,383,597
Property, plant and equipment 16,100 5,230 16,970
_________ _________ _________
3,403,579 3,400,155 3,400,567
_________ _________ _________
Current assets
Trade and other receivables 588,031 447,690 478,804
Cash and cash equivalents 880,267 228,628 383,051
_________ _________ _________
Total current assets 1,468,298 676,318 861,855
_________ _________ _________
Total assets 4,871,877 4,076,473 4,262,422
========= ========= =========
Liabilities
Current liabilities
Trade and other payables 478,834 468,318 491,619
Deferred tax 46,795 22,532 34,397
_________ _________ _________
_________ _________ _________
Total liabilities 525,629 490,850 526,016
Equity
Called up share capital 436,768 355,268 355,268
Share redemption reserve 239,546 239,546 239,546
Share premium account 1,786,895 1,457,645 1,457,645
Share based payment reserve 123,496 90,979 107,198
Retained earnings 1,759,543 1,442,185 1,576,749
_________ _________ _________
Total equity 4,346,248 3,585,623 3,736,406
_________ _________ _________
_________ _________ _________
Total equity and liabilities 4,871,877 4,076,473 4,262,422
========= ========= =========
Unaudited Consolidated Statement of Changes in Equity
Share capital Share redemption reserve Share premium Share based payment reserve Retained earnings Total equity
£ £ £ £ £ £
At 1 November 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 based payment charge - - - 16,539 - 16,539
________ _________ _________ _________ _________ _________
At 30 April 2017 355,268 239,546 1,457,645 90,979 1,442,185 3,585,623
Profit for the six months to 31 October 2017 - - - - 134,564 134,564
Share based payment charge - - - 16,219 - 16,219
________ _________ _________ _________ _________ _________
At 31 October 2017 355,268 239,546 1,457,645 107,198 1,576,749 3,736,406
Profit for the six months to 30 April 2018 - - - - 182,794 182,794
Proceeds from the issue of new shares 81,500 - 329,250 - - 410,750
Share based payment charge - - - 16,298 - 16,298
________ _________ _________ _________ _________ _________
Balance at 30 April 2018 436,768 239,546 1,786,895 123,496 1,759,543 4,346,248
======= ======== ======== ======= ======== =======
Unaudited Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months ended 30 April 2018 6 months ended 30 April 2017 12 months ended 31 October 2017
£ £ £
Cash flows from operating activities
Profit before taxation 213,144 148,781 297,601
Amortisation 116,109 112,998 234,911
Depreciation 2,121 1,222 3,350
Share based payments 16,298 16,539 32,758
Finance income (5) (95) (185)
(Increase)/decrease in receivables (30,210) 15,884 (15,229)
(Decrease)/increase in payables (157,382) (288,670) (267,761)
Corporation tax paid 23,072 - -
_________ _________ _________
Net cash inflow from operating activities 183,147 6,659 285,445
_________ _________ _________
Cash flows from investing activities
Investment in TCAT (95,435) (113,790) (224,375)
Investment in fixed assets (1,251) - (13,868)
Finance income 5 95 185
_________ _________ _________
Net cash used in investing activities (96,681) (113,695) (238,058)
_________ _________ _________
Cash flow from financing activities
Proceeds from the issue of new shares 410,750 - -
_________ _________ _________
Net cash inflow from financing activities 410,750 - -
_________ _________ _________
Net change in cash and cash equivalents 497,216 (107,036) 47,387
Cash at the beginning of the period 383,051 335,664 335,664
_________ _________ _________
Cash at end of the period 880,267 228,628 383,051
========= ========= =========
Notes to the Interim Report
For the six months ended 30 April 2018
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 intellectual copyrights and
publishing for distribution through digital media and through traditional
media outlets.
One Media iP Group Plc is the Group’s ultimate parent company incorporated
in England and Wales under the Companies Act 2006. The registered office of
One Media iP Group Plc 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 2017 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 2018. 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
2017.
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-month
period ended 30 April 2017 and the audited twelve months for the year ended 31
October 2017.
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 ended 30 April 2018 6 months ended 30 April 2017 12 months ended 31 October 2017
Profit for period attributable to equity shareholders £182,795 £132,208 £266,772
Weighted average number of shares in issue 87,353,698 71,053,698 71,053,698
_________ _________ _________
Basic earnings per share 0.21p 0.19p 0.38p
========= ========= =========
The diluted earnings per share would be lower than the basic earnings per
share as the exercise of share options would be dilutive.
4. Share capital
Unaudited Unaudited Audited
30 April 2018 30 April 2017 31 October 2017
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
87,353,698 (2017: 71,053,698) ordinary shares of 0.5p each 436,768 355,268 355,268
========== ========== ==========
5. Share options
Michael Infante, a director of the Company, was granted an option over 500,000
shares in March 2011 that were scheduled to expire in March 2018. As Michael
Infante was unable to exercise the options without either making a mandatory
offer under Rule 9 of The Takeover Code or seeking a waiver from the
obligations of Rule 9, the Board decided in February 2018 to extend the
exercise period of these options until 31 March 2019. Due to an administrative
oversight, the extension was not notified at that time.
6. Interim statement
Copies of this statement are available from the Group’s website,
www.omip.co.uk, as well as from its registered office at: 623 East Props
Building, Goldfinger Avenue, Pinewood Road, Iver Heath, Buckinghamshire, SL0
0NH.
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