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.