REG-One Media iP Group Plc: Interim Results
10/07/2019 07:05
One Media IP Group Plc
("One Media" or “OMiP” or the "Group” or the Company")
Interim Results for the six-months ended 30 April 2019
One Media iP (AIM: OMIP), the digital media content owner which exploits
intellectual digital property rights around music, video and copyright
technology, announces its Interim Results for the six-month period ended 30
April 2019.
Financial Highlights
*
Revenue increased 31.6% to £1,585,687 (30 April 2018: £1,205,262)
*
Operating profit increased 23.9% to £284,360 (30 April 2018: £229,437)
*
EBITDA increased 18.6% to £404,715 (2018: £341,294)
*
Cash balances of £5,184,301 at 30 April 2019 (31 October 2018: £5,576,379)
Operational Highlights
*
Receipt of a recoupable advance against future digital earnings of US
$1,000,000 (January 2019)
*
Acquisition of the music catalogue of Spanish label, Locomotive Records, for
US $750,000 (February 2019)
*
Acquisition of a composition catalogue from Michael Dulaney, an American
country music songwriter, for US $850,000 (April 2019)
*
Continued success through synchronisation deals with multiple secured in the
first half of the year
*
Post-period end acquisitions of composition catalogues from Cole Taylor, an
American country music singer-songwriter, for up to US $290,000 and Daniel
Bashta, an American contemporary Christian singer and songwriter, for US
$725,000
*
Invested US $2.6m through the acquisition of 4 catalogues, on a blended
acquisition multiple of circa 7x
Ivan Dunleavy, Chairman of OMiP, stated: “The six-months to 30 April 2019
represented the first period on which we can report acquisitions arising from
the Company's enhanced strategy to acquire and own music rights. New music
rights contributed £135,448 and like-for-like revenues grew pleasingly by
20.3% in the period.
“With funds available to deploy, One Media is well placed to continue to
source and acquire music rights from our growing pipeline of such
opportunities.”
Michael Infante, CEO of OMiP, added: “We are pleased to have started 2019
with a succession of rights purchases and to be reporting results in line with
market expectations. Committed to scaling the business and strengthening our
catalogue of content, we were delighted to identify and complete a number of
great value acquisitions in genres that we see as having strong potential for
growth, as more people begin to use streaming as their primary method of
consuming music around the world. The global recorded music market shows no
signs of slowing, reporting growth of 9.7% in 2018, with streaming being the
driving force behind this, growing 34% in the same period.
“We now look to the remainder of 2019 with a solid pipeline of opportunities
for further acquisitions and confidence in our ability to capitalise and
strengthen our positioning within this growing market.”
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.
One Media iP Group Plc
Michael Infante - Chief Executive Ivan Dunleavy - Chairman www.omip.co.uk +44 (0)175 378 5501 +44 (0)175 378 5500
Cairn Financial Advisers LLP (Nominated Adviser) +44 (0)20 7213 0880
Liam Murray Jo Turner Ludovico Lazzaretti
Panmure Gordon (UK) Ltd (Broker) +44 (0)20 7886 2500
James Stearns
Yellow Jersey PR (PR & IR) +44 (0)20 3004 9512
Georgia Colkin Joe Burgess omip@yellowjerseypr.com
Operational Review
The Group has continued to make steady progress in the first half of the year
and was pleased to announce a series of catalogue purchases as part of its
stated acquisition programme. The Group has remained focused on seeking
catalogues of exceptional value, in a diverse range of genres where it sees
potential for large future growth in streaming revenues.
In February 2019, the Group announced it had acquired the catalogue of
Locomotive Records for US $750,000, broadening its music library with
contemporary Spanish progressive rock music, notably featuring a number of
tracks from the acclaimed band Mägo de Oz. A great addition to One Media’s
catalogue, the acquisition will enhance the Group’s growth of streaming in
territories including Spain, Latin America and the USA.
Following this, in April 2019 One Media was extremely pleased to announce the
acquisition of the publishing and songwriter’s rights to 93 songs written by
Grammy nominated country music songwriter, Michael Dulaney, for US $850,000.
Dulaney has been a prolific songwriter over the years and has had major hit
songs performed by the likes of Faith Hill and Jason Aldean.
Acquisition momentum continued post-period end, with further acquisitions
announced in May and July. In May 2019, the Group acquired the songwriter’s
share of a number of songs written by Cole Taylor, a country singer-songwriter
for a total consideration of US $260,000 at completion, and a maximum deferred
consideration based on financial performance of US $30,000 within 24 months.
The catalogue includes some of his major hits including two that reached No.1
in the Billboard Country charts.
In July 2019 One Media announced the acquisition of the income from the
publishing and songwriter’s share of the song ‘God’s not Dead’ by
Daniel Bashta for US $725,000. The song has become the signature tune to the
films of the same name ‘God's Not Dead’, ‘God’s Not Dead 2’ and
‘God’s Not Dead: A Light in Darkness’. The films have grossed close to
US $100m. The song was first released as a single on 12 October 2011, peaking
at No. 2 on 9 June 2012 after spending 22 weeks on the Billboard Hot
Christian Songs chart and then charting again when the film of the same name
was released in 2014.
To date, the four catalogues, acquired for a total of approximately US $2.6m,
represent a blended acquisition multiple of circa 7x. With these acquisitions
the Company has now broadened the breadth and depth of content in the One
Media library to include Spanish and Country music, areas which are seeing
tremendous growth in global consumption. Latin America has seen the highest
rate of music revenue growth globally for four consecutive years according to
research by the International Federation of the Phonographic Industry, and
Country music amassed almost 51 billion streams in 2018, a 46 percent growth
over the 2017 numbers according to Nielsen Music.
Whilst the Group has focused on securing key acquisitions it has also remained
committed to maximising the value of the existing catalogue. Over the last six
months, One Media has licenced songs for synchronisation deals with a number
of TV series such as Amazon Prime’s, ‘Too Old To Die Young’ and
Marvel’s ‘Cloak and Dagger’, as well as a TV advert for Unison, the
world’s first home co-investing company and Abercrombie & Fitch.
In addition, progress continues on TCAT, One Media’s Technical Copyright
Analysis Tool, and the work on digital fingerprinting is an exciting addition
to its development. The Group continues to service the requirements of a
major record label and distributor as previously announced. At the period end,
the carrying value for research and development in TCAT was £547,268.
Financial Review
The Group has continued to manage its financial position over the six-month
period to 30 April 2019 with profitable operations. Group consolidated revenue
was £1,585,687 for the six-months ended 30 April 2019 (30 April 2018:
£1,205,262).
Profit before tax amounted to £143,738 (30 April 2018: £213,144) and EBITDA
increased 18.6% to £404,715 (2018: £341,294). During the period, the Company
has not issued new shares as consideration for acquisitions and has used
existing cash resources as consideration. Cash balances at 30 April 2019 were
£5,184,301 (30 April 2018: £880,267).
Litigation
The Company is pleased to report that there are no current or pending
litigation issues.
Dividend
The Group continues to review the dividend policy in line with its cash
resources and requirements. No dividend is announced at this time.
Outlook
We have entered the second half of 2019 with a strong, expanding pipeline of
potential deals and we are confident that we will maintain this momentum as we
progress into the second half of the year.
Michael Infante
Chief Executive
10 July 2019
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2019
Unaudited Unaudited Audited
6 months ended 30 April 2019 6 months ended 30 April 2018 12 months ended 31 October 2018
£ £ £
Revenue 1,585,687 1,205,262 2,702,374
Cost of sales (843,177) (615,835) (1,325,448)
_________ _________ _________
Gross profit 742,510 589,427 1,376,926
Administrative expenses (458,150) (359,990) (738,168)
_________ _________ _________
Operating profit 284,360 229,437 638,758
Share based payments (39,728) (16,298) (115,061)
Finance costs (65,953) - (37,201)
Fund raise costs (35,017) - -
Finance income 76 5 8
_________ _________ _________
Profit on ordinary activities before taxation 143,738 213,144 486,504
Tax expense (24,436) (30,349) (81,488)
_________ _________ _________
Profit for period attributable to equity shareholders and total comprehensive income for the year 119,302 182,795 405,016
========= ========= =========
Basic earnings per share 0.10p 0.21p 0.44p
========= ========= =========
Unaudited Consolidated Statement of Financial Position
As at 30 April 2019
Unaudited Unaudited Audited
30 April 2019 30 April 2018 31 October 2018
£ £ £
Assets
Non-current assets
Intangible assets 4,684,070 3,387,479 3,351,304
Property, plant and equipment 11,844 16,100 12,221
_________ _________ _________
4,695,914 3,403,579 3,363,525
_________ _________ _________
Current assets
Trade and other receivables 804,944 588,031 680,960
Cash and cash equivalents 5,184,301 880,267 5,576,379
_________ _________ _________
Total current assets 5,989,245 1,468,298 6,257,339
_________ _________ _________
Total assets 10,685,159 4,871,877 9,620,864
========= ========= =========
Liabilities
Current liabilities
Trade and other payables 1,431,225 478,834 526,224
Deferred tax 58,133 46,795 58,574
_________ _________ _________
1,489,358 525,629 584,798
Borrowings 1,600,963 - 1,600,258
_________ _________ _________
Total liabilities 3,090,321 525,629 2,185,056
_________ _________ _________
Equity
Called up share capital 678,018 436,768 678,018
Share redemption reserve 239,546 239,546 239,546
Share premium account 4,314,220 1,786,895 4,314,220
Share based payment reserve 261,987 123,496 222,259
Retained earnings 2,101,067 1,759,543 1,981,765
_________ _________ _________
Total equity 7,594,838 4,346,248 7,435,808
_________ _________ _________
_________ _________ _________
Total equity and liabilities 10,685,159 4,871,877 9,620,864
========= ========= =========
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 April 2019
Share capital Share redemption reserve Share premium Share based payment reserve Retained earnings Total
equity
£ £ £ £ £ £
At 1 November 2016 355,268 239,546 1,457,645 107,198 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
________ _________ _________ _________ _________ _________
At 30 April 2018 436,768 239,546 1,786,895 123,496 1,759,543 4,346,248
Proceeds from the issue of new shares 241,250 - 2,653,750 - - 2,895,000
Fund raise costs - - (126,425) - - (126,425)
Profit for the six months to 31 October 2018 - - - - 222,222 222,222
Share based payment charge - - - 98,763 - 98,763
________ _________ _________ _________ _________ _________
At 31 October 2018 678,018 239,546 4,314,220 222,259 1,981,765 7,435,808
Profit for the six months to 30 April 2019 - - - - 119,302 119,302
Share based payment charge - - - 39,728 - 39,728
________ _________ _________ _________ _________ _________
Balance at 30 April 2019 678,018 239,546 4,314,220 261,987 2,101,067 7,594,838
======== ========= ========= ========= ========= =========
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 April 2019
Unaudited Unaudited Audited
6 months ended 30 April 2019 6 months ended 30 April 2018 12 months
ended 31 October 2018
£ £ £
Cash flows from operating activities
Profit before taxation 178,756 213,144 486,505
Amortisation 128,315 116,109 247,406
Depreciation 3,579 2,121 7,653
Share based payments 39,728 16,298 115,061
Finance income (76) (5) (8)
Finance costs 100,970 - 37,201
(Increase)/decrease in receivables (123,985) (30,210) (202,155)
(Decrease)/increase in payables 779,424 (157,382) (87,013)
Corporation tax paid (2,272) 23,072 27,104
_________ _________ _________
Net cash inflow from operating activities 1,104,439 183,147 631,754
_________ _________ _________
Cash flows from investing activities
Investment in copyrights / TCAT (1,461,080) (95,435) (215,113)
Investment in fixed assets (3,201) (1,251) (2,904)
Finance income 76 5 8
_________ _________ _________
Net cash used in investing activities (1,464,205) (96,681) (218,009)
_________ _________ _________
Cash flow from financing activities
Proceeds from the issue of new shares - 410,750 3,305,750
Share issue costs (35,017) - (126,425)
Loan notes 705 - 1,600,258
_________ _________ _________
Net cash inflow from financing activities (34,312) 410,750 4,779,583
_________ _________ _________
Net change in cash and cash equivalents (392,078) 497,216 5,193,328
Cash at the beginning of the period 5,576,379 383,051 383,051
_________ _________ _________
Cash at end of the period 5,184,301 880,267 5,576,379
========= ========= =========
Notes to the Interim Report
For the six months ended 30 April 2019
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 and 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 2018 are available from the Group’s website www.omip.co.uk.
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 2019. 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 2018.
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 2019 and the audited twelve months figures for the year
ended 31 October 2018.
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 2019 6 months ended 30 April 2018 12 months ended 31 October 2018
Profit for period attributable to equity shareholders 119,302 182,794 405,016
Weighted average number of shares in issue at period end 116,171,507 87,353,698 92,244,794
_________ _________ _________
Basic earnings per share 0.10p 0.21p 0.44p
========= ========= =========
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 2019 30 April 2018 31 October 2018
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
135,603,699 (2018: 135,603,699) ordinary shares of 0.5p each 678,018 436,768 678,018
========== ========== ==========
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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