One Media iP Group Plc
("One Media", the "Group" or the "Company")
UNAUDITED INTERIM RESULTS
Profit before taxation up 31.5%, turnover up 13% and interim dividend of 0.071p
ence declared
USD$2 million advance agreed with The Orchard
One Media iP Group plc (AIM: OMIP), the 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 2014 and an
interim dividend.
Highlights:
* Turnover up 13% to £1,492,412 (2013: £1,325,119);
* Profit before tax up 31.5% to £344,865 (2013: £262,180);
* Cash balances of £1,411,305 at 30 April 2014 (2013: £1,919,668);
* Dividend of 0.077p per ordinary share paid in November in respect of the
year ended 31 October 2013; and
* Interim dividend of 0.071p per ordinary share declared in respect of the
six month period ended 30 April 2014.
As announced on 10 June 2014, a USD$2,000,000 advance against future royalties
was agreed with the Company's distributor, The Orchard.
Michael Infante, Chairman and CEO, commented: "I am very pleased with our
ongoing progress and today's published results and post-balance sheet events.
The Group continues to deliver shareholder value, both through improved
financial performance and the acquisition of content, which the Board believes
adds considerable value to One Media setting the Company apart. We do face
challenges however in our digital world and the Board recognises that there is
no room for complacency. Streaming music sites such as Spotify and YouTube are
beginning to dominate what was, only a short time ago, the majority 'selling
space' held by the traditional digital stores such as iTunes"
"We embrace all forms of digital exploitation but the shifts in digital models
today are demanding and require us to keep ahead of the curve on all our
distribution services. We are constantly monitoring trends and keep ahead by
training our team in new methods of digital marketing utilising social media.
We are confident that your Company is correctly positioned to meet the many
demands within the industry."
For further information, please contact:
One Media iP Group Plc Chairman and Chief Executive
Michael Infante Tel: +44 (0)175 378 5500
Cairn Financial Advisers LLP Nominated Adviser
Liam Murray / Jo Turner Tel: +44 (0)20 7148 7900
Charles Stanley Securities Limited Broker
Mark Taylor Tel: +44 (0)20 7149 6000
Yellow Jersey PR Limited Financial PR
Kelsey Traynor/Dominic Barretto/Philip Ranger Tel: +44(0)7799 003 220
CHAIRMAN & CHIEF EXECUTIVE STATEMENT
The Group has continued to show good progress in the six months period to 30
April 2014 with growth in both turnover and profit before taxation and has
continued to develop its content portfolio with a number of small acquisitions
of content and rights. Results for the six months ended 30 April 2014, the
Group's consolidated turnover increased by 13% to £1,492,412 (2013: £1,325,119)
and, an increase of 13% on the equivalent period last year when £1,325,119 was
reported.
Profit before tax and interest increased by 31.5% to £344,865 is reported for
the six months, up 31.5% on the equivalent figure of (2013: £262,180).
The Group continued to invest in intellectual property and copyrights, spending
a further £375,901 in this area during the period.
Following the exercise in November 2013 of employee share options and the
exercise of warrants by directors and an institutional investor in April 2014 a
total of £92,500 was raised in new equity.
Cash balances at 30 April 2014 continued to remain strong at £1,411,305.
As announced on 10 June 2014, a USD$2,000,000 advance against future royalties
was agreed with The Orchard, the Company's primary digital distributor.
The Group receives the majority of its income in US Dollars. Recent shifts in
exchange rates have not favoured us and the Board is conscious to carefully
monitor exchange rates to ensure best conversion deals from time to time. One
Media deals in a worldwide market and we have to convert our digital income
from the many territories currencies in which we deal on a monthly basis. All
of these local currencies are converted to US Dollars which are ultimately are
reported in Pounds Sterling.
Dividend
Pursuant to the dividend payment of 0.077p per share in November 2013, the
Group is pleased to announce that it intends to pay an interim dividend of
0.071p per ordinary share in respect of the 6 month period ended 30 April 2014.
The ex-dividend date of this payment is 25 June 2014, the record date is 27
June 2014 and the expected payment date 8 July 2014.
Contents and Acquisitions
During the period, the Company has not issued new shares as consideration for
acquisitions and has used existing cash resources as consideration. In December
2013, One Media acquired various rights for a consideration of USD$100,000 for
several back catalogues of music and video.
The first of four was for the Irish singer 'Rose-Marie'. This exclusive deal
includes over 160 tracks (24 albums) of Irish and standard ballads. Rose-Marie
is a prolific Irish performer well known within the cabaret, TV and recording
circles. The catalogue includes a host of standards including Danny Boy, Ave
Maria and Abide with Me.
The second was for the exclusive license with an on-going royalty for certain
titles taken from the 'Delta Leisure Group' video library for digital
exploitation. Over 250 programmes of trains, planes and automobiles and various
special interest content including cookery, sports, fishing and keep fit
instructional videos were included. All of the content will be made available
through One Media's emerging video channels on YouTube and other advertising
funded broadcast mediums.
The third was for the exclusive audio book rights to the 'Lost Elvis Diaries'
written and edited by Aubrey Malone. The book which is a recreation of Elvis's
life is written in diary form. This audio-visual digital book deal which
contains many previously unpublished photographs from Elvis's life will be
offered in all formats including: electronic written publication ('Kindle'
style) and via download in spoken word format for all the Group's digital
stores such as iTunes, Amazon, Spotify and serialised on YouTube.
The fourth deal concluded was a revisit to one of One Media's original
licensors and royalty partners. One Media invested in the High Energy/Northern
Soul/Motorcity catalogues (Tropicana) originally in 2006. This deal was
extended in 2010 for a period of 25 years. The Group can now report that it has
taken ownership of the 2,500 soul/dance music tracks and associated videos. The
catalogue contains 80s chart topping artists like 'Evelyn Thomas' performing
her number one hit 'High Energy', performances from 'Johnny Bristol', 'Barbara
Pennington', 'Martha Reeves', 'Marv Johnson' and the 'Former Ladies of the
Supremes' just to mention a few of the 200 artists featured within the
catalogue.
In January 2014, One Media consolidated a long term licensor's agreement for
their audio rights for a consideration of USD75,000. We continue to actively
pursue 'buy-out' deals with our royalty partners as they impact positively on
profitability but of course have no effect on turnover.
Subsequent to the balance sheet date in May 2014, One Media announced that it
had acquired, under an exclusive license with an on-going royalty, the 'Rock
and Roll Palace' and 'Church Street Station' music-video catalogues; this deal
was concluded with the 'Henry Hadaway Organisation' ("HHO") for a total
consideration of £300,000 plus VAT. The two catalogues contain hundreds of
music-video performances by various artists such as; 'Tammy Wynette', 'Charlie
Rich', 'George Jones', 'Lynn Anderson', 'Mickey Giley', 'Tanya Tucker', 'The
Bellamy Brothers', 'The Osmonds', 'Del Shannon', 'The Platters', and the
'Shirelles' to name just a few.
Directors Share Trading
The Group announced that on 9 April 2014, and to satisfy investor demand, the
directors of the Company sold their warrants to institutional investors.
A total of 5,250,000 warrants were realised in the Directors' Dealings. There
are no outstanding warrants issued to the directors. We saw this as a tidying
up event to remove the 'overhang' and to increase liquidity within the market
place.
The Market
At the beginning of this financial year (November 2013 to April 2014) the Board
implemented several changes within the Group's internal technical operations,
to ensure we keep 'current' with digital market forces. As digital 'streaming'
begins to have greater traction in both our video and audio markets, we have
commenced a series of cross-training exercises with our team of in-house
creative technicians. As you may recall, I stated that we would be focused on
investing in people this time last year to facilitate video. The day-to-day job
of delivering both music and video to over 600 digital stores has advanced in
line with industry changes. Our foresight and investment over the last nine
years has made our systems, eminently flexible. Our bespoke ingestion system,
developed in-house, caters for our needs and has been handling upwards of 20
million digital transactions per month. Couple this with the arrival of the
monetisation and managing our emerging YouTube channels - there is a lot of
data to monitor.
What is changing is the diverse consumer choice between the iTunes
(downloading) model and that of the Spotify 'streaming' model. I have long
believed - if one can say that in an industry less than ten years old- that
'streaming' will be the driving force in both video and audio consumer
preference. Liberating a consumer's chosen device's hard drive from having to
contain 'terabytes' and potentially 'petabytes' of data is far too restrictive
and not necessary. Therefore 'streaming' and 'on-demand' services will be the
way forward.
Additionally, sound purists will tell you that music and video can stand only
so much 'compression' before the quality of the content is challenged. As
broadband becomes broader and more widely accessible via the static delivery of
your home phone line or via the roaming services of 4G, more data is being
delivered into our daily lives than ever before. It is therefore an engineering
challenge (even with micro-chips and hard drives being miniscule) to store the
quantity of data now required for the longer term onto your chosen device. This
data (whether it be music or video) is available at any time anywhere in the
world via a streaming service. The 'Cloud' has no limits. This makes hardware
cheaper and processors faster.
There is the additional benefit to content owners and artists alike that the
'streaming' model offers. Young consumers that do not have the ability of using
credit cards to purchase music online are drawn to free illegal download sites.
Many of these sites, and the various illegal torrent stores or file sharing
sites offer vast amounts of music and video at no charge. If consumers can
access safely and legitimately and without fear of 'bugs' and 'viruses' and/or
at low subscription prices a legitimate music store (and sometimes free via
ad-funded revenue sharing schemes), why risk the pirate sites. Additionally
telecom companies (such as Vodafone) have offered subscription memberships to
music stores as part of their monthly mobile tariffs. These initiatives I see
as growing and ultimately good for the industry in the fight against piracy and
growing legitimate continual revenue streams.
Outlook
A recent report by PriceWaterhouseCoopers ("PwC") has predicted that global
streaming music revenues will see compound growth of 13.4% over the next five
years, but that music downloads will still grow as well, albeit by just 3.3%.
PwC thinks that the global media and entertainment industry will grow at a 5%
compound annual growth rate to USD2.15 trillion by 2018, with digital spending
growing at 12.2%, and accounting for 65% of the overall revenue growth in that
period. By 2018, the report suggests that China, Brazil, Russia, India, Mexico,
South Africa, Turkey, Argentina and Indonesia will account for 21.7% of global
revenues.
The first half of our year emulates the trend above in turnover. Stores such as
iTunes are being repositioned by the competiveness and the affordability of
streaming stores such as Spotify, Deezer and YouTube. Whilst we are not seeing
a drop in revenues from the downloading stores such as iTunes we are seeing a
slowing of growth in their model. Conversely we have seen enlarged growth in
the "streaming' stores model as they ingratiate themselves with consumers. A
final word on growth, not all consumers both here in the UK and the rest of the
world have yet switched to digital consumption. We must not forget, albeit your
Group does not trade in it, that physical product still exists in the form of
CD and DVD. We are still only experiencing approximately 37% of music and video
consumers worldwide who have embraced the digital medium so far, so with a
headroom of circa 63% of worldwide consumers yet to discover digital music and
video, we are very much still in a growth market.
MICHAEL INFANTE
CHAIRMAN AND CHIEF EXECUTIVE
17th June 2014
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 April 2014
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended 31
30 April 2014 30 April 2013 October 2013
£ £ £
Revenue 1,492,412 1,325,119 2,649,130
Cost of sales (712,822) (628,384) (1,273,592)
_________ _________ _________
779,590 696,735 1,375,538
Administrative expenses (434,725) (434,555) (851,890)
_________ _________ _________
Profit from continuing 344,865 262,180 523,648
activities
Other expenses - Aim float - (196,559) (196,559)
and associated costs
_________ _________ _________
Operating profit 344,865 65,621 327,089
Finance income 705 1,046 2,800
_________ _________ _________
Profit on ordinary activities 345,570 66,667 329,889
before taxation
Taxation (21,000) (49,200) (90,980)
_________ _________ _________
Profit for period 324,570 17,467 238,909
attributable to equity
shareholders
========= ========= =========
Basic adjusted earnings per 0.49p 0.031p 0.40p
share
========= ======= =========
Unaudited Consolidated Statement of Financial Position
As at 30 April 2014
Unaudited Unaudited Audited
30 April 2014 30 April 2013 31 October 2013
£ £ £
Assets
Non-current assets
Intangible assets 2,108,759 1,661,416 1808,535
Property, plant and 18,547 38,388 26,439
equipment
_________ _________ _________
2,127,306 1,699,804 1,834,974
_________ _________ _________
Current assets
Trade and other 585,119 435,198 481,453
receivables
Cash and cash 1,411,305 1,919,668 1,688,093
equivalents
_________ _________ _________
Total current assets 1,996,424 2,354,866 2,169,546
_________ _________ _________
Total assets 4,123,730 4,054,670 4,004,520
========= ========= =========
Liabilities
Current liabilities
Trade and other payables 1,206,414 1,720,339 1,468,312
_________ _________ _________
_________ _________ _________
Total liabilities 1,206,414 1,720,339 1,468,312
_________ _________ _________
Equity
Called up share capital 353,518 320,018 324,768
Share redemption reserve 239,546 239,546 239,546
Share premium account 1,452,895 1,370,895 1,389,145
Share based payment 40,629 18,835 26,192
reserve
Retained earnings 830,728 385,037 556,557
_________ _________ _________
Total equity 2,917,316 2,334,331 2,536,208
_________ _________ _________
_________ _________ _________
Total equity and 4,123,730 4,054,670 4,004,520
liabilities
========= ========= =========
Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 April 2014
Share Share Share Share Retained Total
capital redemption premium based earnings equity
reserve payment
reserve
£ £ £ £ £ £
At 1 November 273,143 239,546 718,271 12,416 387,783 1,631,159
2012
Issue of share 46,875 - 703,125 - - 750,000
capital
Costs of share - - (50,501) - - (50,501)
issue
Profit for the - - - - 17,467 17,467
six months to
30 April 2013
Share option - - - 6,419 - 6,419
charge
Dividends - - - - (20,213) (20,213)
________ _________ _________ _________ _________ _________
At 30 April 320,018 239,546 1,370,895 18,835 385,037 2,334,331
2013
Issue of share 4,750 - 18,250 - - 23,000
capital
Profit for the - - - - 221,442 221,442
six months to
31 October 201
3
Share option - - - 7,357 - 7,357
charge
Dividends - - - - (49,922) (49,922)
________ _________ _________ _________ _________ _________
At 31 October 324,768 239,546 1,389,145 26,192 556,557 2,536,208
2013
Issue of share 28,750 - 63,750 - - 92,500
capital
Profit for the - - - - 324,570 324,570
six months to
30 April 2014
Share option - - - 14,437 14,437
charge
Dividends - - - - (50,399) (50,399)
________ _________ _________ _________ _________ _________
Balance at 30 353,518 239,546 1,452,895 40,629 830,728 2,917,316
April 2014
======== ========= ========= ========= ========= =========
On 8 November 2013 500,000 employee share options, over ordinary shares of 0.5p
each, were exercised at 2.75p per share. Further, as announced on 10 April
2014, Michael Infante sold 1,800,000 warrants in ordinary shares of 0.5p each,
with an exercise price of 1.5p directly to one institutional investors. The
investor immediately exercised the warrants over 1,800,000 new ordinary shares.
Also a further 3,450,000 million warrants, over ordinary shares of 0.5p each,
with an exercise price of 1.5p were exercised by directors.
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 April 2014
Unaudited Unaudited Audited
6 months 6 months 12 months ended
ended ended 31 October 2013
30 April 2014 30 April 2013
£ £ £
Cash flows from operating
activities
Profit before taxation 345,570 66,667 329,889
Amortisation 75,677 53,933 118,959
Depreciation 10,557 13,267 27,389
Share based payments 14,437 6,419 13,776
Finance income (705) (1,046) (2,800)
(Increase)/decrease in (103,666) (29,436) (75,691)
receivables
(Decrease)/increase in payables (282,898) 1,037,986 819,873
Corporation tax paid - - (75,694)
_________ _________ _________
Net cash inflow from operating 58,972 1,147,790 1,155,701
activities
_________ _________ _________
Cash flows from investing
activities
Investment in copyrights (375,901) (273,209) (485,354)
Investment in fixed assets (2,665) (3,900) (6,073)
Finance income 705 1,046 2,800
Corporation tax paid
_________ _________ _________
Net cash used in investing (377,861) (276,063) (488,627)
activities
_________ _________ _________
Cash flow from financing
activities
Proceeds from the issue of new 92,500 750,000 773,000
shares
Share issue costs - (50,501) (50,501)
Dividend paid (50,399) (20,213) (70,135)
_________ _________ _________
Net cash outflow from financing 42,101 679,286 652,364
activities
_________ _________ _________
Net change in cash and cash (276,788) 1,551,013 1,319,438
equivalents
Cash at the beginning of the 1,688,093 368,655 368,655
period
_________ _________ _________
Cash at end of the period 1,411,305 1,919,668 1,688,093
========= ========= =========
Notes to the Interim Report
For the six months ended 30 April 2014
1. Nature of operations and general information
One Media iP Group Plc and 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 2013 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 2014. 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 2013.
This unaudited interim statement has not been subject to a review by the
Group's auditors James Cowper LLP.
Comparatives
The comparative periods represent the unaudited results for the six months
period ended 30 April 2013 and the audited twelve months figures for the year
ended 31 October 2013.
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 6 months ended 6 months ended 12 months ended
share
30 April 2014 30 April 2013 31 October 2012
Profit for period 324,570 17,467 238,909
attributable to equity
shareholders
Weighted average number 66,037,498 55,716,405 59,999,725
of shares in issue at
period end
_________ _________ _________
Basic earnings per 0.49p 0.031p 0.40p
share
========= ========= =========
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 2014 30 April 2013 31 October 2013
Group and company £ £ £
Authorised:
200,000,000 ordinary shares of 1,000,000 1,000,000 1,000,000
0.5p each
========== ========== ==========
Issued:
Ordinary shares of 0.5p each
70,703,698 at 30 April 2014 , 353,518 320,018 324,768
64,003,698 at 30 April 2013 and
64,953,698 at 31 October 2013
ordinary shares of 0.5p each
========== ========== ==========
5. Dividend
The Directors are delighted to announce a second divided for the year of £
50,200 (0.071p per share) following the earlier dividend of £50,399 (0.077p per
share). Our intention is to reward those investors that have been loyal and to
further demonstrate that One Media is an investment opportunity providing a
return that we believe we will enhance shareholder value.
6. 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.
Notes to Editors:
One Media is a digital music and video rights owner. The consumer led but B2B
(Business-to-business) operation looks to exploit its catalogue of over 200,000
music tracks and over 7,000 hours of video by recompiling the content for sale
through over 600 digital music and video stores worldwide. The Company has a
team of Creative Technicians who digitise the content, create the metadata and
re-compile and prepare the digital music & video releases using bespoke in-house software.
Additionally, One Media makes its library of content available for TV shows,
movies, adverts, games and websites. One Media operates an online sync database
system that enables music supervisors to explore the library and select tracks
for music briefs.
One Media focuses on music performed by well known artists from every genre,
including; pop, rock, reggae, R&B, children's music, karaoke, jazz, soul,
blues, rap, hip-hop, gospel, world-music, plus stand-up comedy, spoken-word and
over 1,000 hours of classical music.
One Media is eligible for Enterprise Investment Schemes ("EIS") and Venture
Capital Trusts ("VCT")© 2014 PR Newswire
