Company Announcements

29 March 2023

 

 

One Media iP Group Plc

("One Media", "the Company" or the "Group")

 

Audited results for the year ended 31 October 2022

 

Music rights continuing to deliver double digit growth

driven by active management of copyrights and supportive industry backdrop  

 

One Media (AIM: OMIP), the digital media content owner and manager which specialises in the active monetisation of music and video intellectual property rights, together with copyright protection technology, announces its audited results for the year ended 31 October 2022.

 

Financial highlights

 

·      17% increase in total revenue and 9% uplift in EBITDA to £5.1 million (2021: £4.4 million) and £1.8 million (2021: £1.6 million) respectively, driven by acquisition, organic growth and active management of the portfolio in line with strategy to maximise income from rights under ownership

·      Organic revenue growth in the year of 7% reflecting both the active management and the strength of underlying catalogue resulting from an investment strategy focused on evergreen music with lasting appeal

·      Compound average annual organic revenue growth of 15% over the last five years, reflecting the strong fundamentals of the Group's catalogue before its rights management expertise is applied to unlock latent income potential

·      20% uplift in net revenue (net of distribution charges, royalty and other costs) to £3.3 million (2021: £2.8 million)

·      Operating profit of £0.9 million (2021: £1.1 million) and EPS of 0.20p (2021: 0.24p), reflecting the Group level investment into TCAT in addition to costs relating to the refinancing completed with Coutts & Co.

·      Invested £1.7 million, including £1.2 million into new acquisitions identified as fitting the Company's appetite for proven, recurring income streams that have the potential to be further cultivated

·      Refinancing of £1.9 million of unsecured loan notes with a Coutts & Co. facility with more traditional lending terms and enabling greater operational flexibility

·      Healthy cash balance of £2.2 million (2021: £2.6 million) providing flexibility for strategic investment

·      IFRS NAV per Ordinary Share unchanged at 7p (2021: 7p)

·      Operative NAV per Ordinary Share of 18p ^⑴

·      Final dividend declared of 0.055p per share

Operational and post period highlights

 

·      Ongoing successful active management of catalogue of c. 240,000 recordings, including high profile synchronisation ("sync") placements, including on Netflix series Bridgerton and the Hulu/Disney+ series 'Only Murders in the Building', contributing to increased revenue performance

·      £1.2 million of investment into new rights at a blended multiple of below 11 times, including the licensing rights to a diversified music income rights catalogue featuring José Carreras, Jo Jo Adams, Irish Tenor Trio, Alexander O'Neal, Sid Vicious, Lee Perry, The Lambrettas, Suketu, Col Abram, Psy-Co-Billy, Rachel Porter's all female Orchestra

 

·      Strategic decision taken to continue to invest into anti-piracy software subsidiary TCAT to benefit from medium term value creation potential

·      TCAT business plan advanced with appointment of CEO Nick Stewart and investment into new skillsets

Board changes

 

·      Board further strengthened in October with the appointment of Mark Adams as an Independent Non-Executive Director

 

Positive market outlook, notwithstanding macroeconomic headwinds

 

·      Outlook for the music industry continues to be positive, with Goldman Sachs raising 2022 and 2023 global music forecasts and predicting 12% CAGR 2021-2023

·      Emerging opportunities, including in new territories and with new technology advances, providing increasing opportunities to license music and grow royalties

·      The current year's trading has started in line with our expectations.  The Group is well positioned for the year ahead and we continue to work hard on behalf of our shareholders to maintain our positive performance and to deliver secure and growing returns

 

⑴ Operative NAV is calculated by using the IFRS NAV, adjusting for the revaluation of catalogues assets to fair value and then adding back the catalogue amortisation

 

Michael Infante, CEO said: "The Group has delivered another positive performance in 2022, with the results testament to the underlying strength of our incredible catalogue and the care and expertise of the One Media team, who are stewards of the music we own. With the opportunities to grow the royalties from our existing music catalogue increasing internationally, these will be our ongoing focus for 2023. Alongside this, following the strategic decision taken to prioritise capital allocation to TCAT, given the potential this proprietary software has in meeting the expanding requirement for digital copyright infringement detection tools, we will look to escalate its operations and grow the business.

 

"Our dividend has been maintained and, with a strong balance sheet underpinning the Group as well as a supportive outlook for the music industry, we are well placed for 2023 and to continue to deliver positively on behalf of our shareholders."

 

This announcement contains inside information for the purposes of UK Market Abuse Regulation. The person who arranged the release of this information is Michael Infante, Chief Executive Officer of the Company.

 

 

For further information, please contact:

 

One Media IP Group Plc
Michael Infante	Chief Executive Tel: +44 (0)175 378 5500
Claire Blunt	Chairman Tel: +44 (0)175 378 5500
Cairn Financial Advisers LLP	Nominated Adviser
Liam Murray / Jo Turner / Ludovico Lazzaretti	Tel: +44 (0)20 7213 0880
Cenkos Securities plc	Broker
Max Gould / Giles Balleny, (Corporate Finance) Michael Johnson (Sales)	Tel: +44 (0)20 7397 8900
Claire Turvey, Fourth Pillar claire@thefourthpillar.co.uk	Financial PR Tel: +44 (0)7850 548 198

 

About One Media iP Group Plc 

One Media is a digital music rights acquirer, publisher and distributor with a diversified catalogue of over 240,000 music tracks independently valued at £34.8 million (as at April 2022). The Group specialises in purchasing and monetising intellectual property rights with proven, repeat income streams.  One Media adds value to its content by maximising its availability in over 600 digital stores globally, including Apple Music, YouTube, Amazon and Spotify.

One Media's music is also widely used for synchronisation in film and TV whilst its video content is primarily viewed on YouTube, where One Media operates over 20 channels as a certified partner. Additionally, its copyright infringement and digital music audit tool software TCAT is used by major record labels and the world leading digital international distributor. Men & Motors, the Company's branded car channel, is now available via YouTube www.youtube.com/channel/UCNLiybn_9jgQaV0NZlSRwCg

One Media is listed on the AIM Market of the London Stock Exchange under the ticker 'OMIP'.

For further information, please visit www.omip.co.uk and www.harmonyip.com/ 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chairman's Statement

 

Once again, we are reporting another positive set of results, driven by the Group's focus and long track record in increasing income from digital copyrights, while at the same time growing their capital value. The team's specialist expertise in this sector has helped deliver a 17% increase in total revenue to £5.1 million (2021: £4.4 million) and a 9% uplift in EBITDA to £1.8 million (2021: £1.6 million).

These results, underpinned by a positive industry backdrop, have given the Board the confidence to declare an annual dividend of 0.055p per share, subject to shareholder approval at the Company's forthcoming Annual General Meeting.

With the core business continuing to perform positively and in line with expectations, during 2022 the Group spent time strategically evaluating the investment into its proprietary anti-piracy software, TCAT (Technical Copyright Analysis Tool). TCAT is delivering an important and much needed service to music rights holders (including One Media) and to the creative community by providing protection from and detection of copyright infringement and loss of due income through the illegal activities of others. During the period, TCAT signed additional industry contracts and trials for its proprietary software and it continues to gain traction internationally with both major and independent labels.

As set out in the Group's half year results on 19 July 2022, the Board, together with the newly formed TCAT board, had been exploring independent funding options for TCAT. However, as we communicated in the Group's trading update on 6 January 2023, the Board subsequently undertook a further assessment of the strategic position of the TCAT business, in conjunction with the Group's advisers and alongside consultation with major shareholders. This included a consideration of both the external and internal funding options available, given the strength of the Group's balance sheet. As a result of this process and consultation, the Board concluded that, in its opinion, greater value can be captured by retaining TCAT within the Group and supporting TCAT in reaching its next level of growth.

The Board continues to believe that, against the positive industry growth trajectory, the TCAT business presents a significant, scalable opportunity with exciting potential.  The Group will therefore continue to use its cash resources to invest into TCAT's operations, as it has done to date, with a view to benefitting from the medium-term value creation potential of the business.

In October, we welcomed Mark Adams to the Board as an Independent Non-Executive Director . As part of his role, he also chairs the Audit Committee. In the short time since his arrival, Mark has already made a significant contribution to the Group. With a nearly 30-year career working in senior finance roles across a range of high profile, listed companies, Mark brings extensive complementary experience to the Company's Board, with a particular focus on financial strategy and transactions, including M&A and fundraising, as well as best practice corporate governance. Mark's appointment further improves our corporate governance and provides us with important strategic insight built on an extensive track record of successfully operating in the listed sector at the highest levels.  To have someone of his calibre as part of our team is a strong endorsement of the Group's potential as we continue our journey to deliver shareholder value.

Looking at the economic and political backdrop, the last year has been a challenging one for many businesses and people across the world, for many different reasons. We are all having to navigate rising interest rates and inflation, which are contributing to a cost-of-living crisis; while it is very sad that, twelve months on, war is continuing in Europe. Our hearts and minds continue to stand with the people of Ukraine. 

Despite these difficulties, the music industry outlook remains positive. The growing popularity of streaming services and the technological changes that are creating some incredible new opportunities for content licensing offer significant potential for rightsowners such as One Media to proactively grow their income.

 

The Group's ongoing positive performance against this encouraging industry backdrop leaves us optimistic about the year ahead, including the business plan for TCAT and, importantly, the opportunities that will be available for the Group to continue to showcase its deep expertise in driving revenues from digital copyrights.

 

Claire Blunt

Non-Executive Chairman

 

Chief Executive's Statement

 

Strategy overview

 

One Media is an owner, publisher and distributor of digital music copyrights with previously proven income streams, which our specialist team grows further through active monetisation. We derive the majority of our revenue from royalties collected from the licensing and use of the Company's content, which we enhance by actively seeking out and leveraging a range of opportunities around the world. These include improving its availability globally across over 600 streaming stores (also known as Digital Service Providers ("DSPs")) including Apple Music, YouTube, Amazon Music and Spotify, while also working to identify opportunities to drive royalty revenue via the placement of our music in films, adverts and television series.

 

Royalty returns are largely uncorrelated to the performance of the equity markets, they are predictable and generate an annuity-like income for investors, which is at the core of our investment case. Additionally, One Media tends to focus on more mature compositions with proven durability, underpinning the delivery of reliable revenues.

 

We are custodians of an extensive catalogue of over 240,000 music tracks, diversified across a range of genres including pop, rock, country and classical, which deliver long term, growing and secure income, around 97% of which is recurring. Our catalogue includes different types of copyrights associated with high profile artists, including producer's royalties from certain recordings by Take That, Culture Club, Heatwave, and Kid Creole. We also own master rights (recordings) and writers' royalties (compositions) for Don Williams, Mago De Oz, Philip Wesley, as well as thousands of other income producing royalties derived from our global exploitation of music via our many distribution partners in both audio and video.

 

Leveraging its expansive industry relationships, the Company is able to identify proven content which it believes is undervalued or has latent potential, which we then seek to crystallise on behalf of shareholders. The Group also comprises complementary initiatives that support the delivery of our core strategy while also providing additional, diversified sources of revenue.

 

Harmony IP was established in 2020 and enables composers and master rights owners to release portions of equity from their music, giving artists greater flexibility to access future earnings while retaining majority ownership of their much-loved intellectual property. From a One Media perspective, it supplements our existing revenue streams and creates opportunities for us to build strongly aligned partnerships and relationships with rights owners, putting us in a favourable position to increase our exposure to their assets further down the line. Over £5.4 million has been deployed since Harmony IP's inception, allowing the Group to purchase selective portions of legacy catalogues.

 

Finally, the Group's Technical Copyright Analysis Tool ("TCAT"), is a software as a service ("SaaS") platform - accessed via an online portal on an ongoing subscription basis centrally hosted by TCAT using AWS in the cloud.  Developed by One Media, it is a proprietary, specialist anti-piracy tool which identifies illegal or unlicensed use of digital music (copyright infringement), helping to maximise revenue for record labels and also for One Media. Collecting and viewing data in real time and storing said data for data searches on behalf of its clients to be used by them on a request by request basis, TCAT's data searches assists clients in supporting both our acquisition strategy, tracks audit usage and further de-risking our investment process.

 

Financial performance

 

In April 2022, our content catalogue was independently valued at £34.8 million, representing an implied value of 16.1p per share and, importantly, the fair value of the portfolio that has been carefully assembled over the last 16 years.

 

Our catalogue has been instrumental in the Group delivering double digit growth once again this year, with revenue up 17% to £5.1 million (2021: £4.4 million) and EBITDA up 9% to £1.8 million (2021: £1.6 million).

 

 

This continued growth is a reflection of our selective acquisition strategy, which is focused on investing into evergreen content that has proven incomes profiles; the active asset management of our rights by the Group's specialist team; and the supportive industry backdrop, underpinned by the ongoing positive trajectory of the music streaming sector.

 

Net revenue increased by 20% to £3.3 million (2021: £2.8 million), which is indicative of the strong underlying performance of our catalogue as well as acquisitions undertaken during the year. With c. 80% of Group income denominated in US dollars, revenues were also supported by favourable foreign exchange rates. Management keeps a close eye on currency exchange markets and takes a nimble approach to forex decisions to take advantage of beneficial movements. 

 

Operating profit and earnings per share were down on 2021, to £0.9 million (2021: £1.1 million) and 0.20p (2021: 0.24p) respectively, as a result of the impact of the Group's investment into TCAT, as well as costs relating to the refinancing completed with Coutts & Co.

 

In September, we refinanced £1.9 million of outstanding unsecured loan notes held by British Growth Fund, which carried a fixed interest rate of 7%. The refinancing was undertaken by way of a secured facility from Coutts & Co. priced at base rate plus 3.5%, amortising on a straight-line basis over five years. Whilst secured, the new Coutts facility is on more traditional bank lending terms and contains fewer restrictions on the operations of the business, giving us greater flexibility in executing our strategy.

 

Following an in-depth strategic review, TCAT will remain within the One Media Group, with a view to benefitting from the medium-term value creation potential of the business. We will therefore continue to use the Group's cash resources to invest into TCAT's operations, as we have done to date. The net cash investment is expected to be up to c. £1.4 million in the current financial year (up from c. £0.8 million in FY22) but it is not expected to impact on the Group's dividend policy. However, whilst the Group invests in TCAT, we have stated that there will be reduction in cash resources available to the Group for potential content acquisitions.

At the end of the period, our cash balance was £2.2 million (2021: £2.6 million), meaning our business continues to be supported by a healthy balance sheet giving the Group capacity to take advantage of investment opportunities, as well as accretive reinvestment into the Group.

 

As a result of the positive performance in the year, a final dividend of 0.055p per share has been declared by the Board, pending shareholder approval at the Annual General Meeting.

 

Operational update

 

During the year, we invested £1.7 million, including into new acquisitions that we identified as fitting our appetite for proven, recurring income streams that have the potential to be further cultivated. This means curating, repurposing, restoring and, importantly, policing our content with all the care that the original writers and performers value and now rely on.

 

We are focused on content that is older and more established, meaning it can often be overlooked or undervalued, but almost always recognisable by tune or artist. We take these pieces of music and nurture them carefully through our in-house team of expert Creative Technicians, improving the chances of rediscovery through precise metadata to reach consumers via DSPs across over 200 territories and growing their exposure through licensing opportunities.

 

We also take measures to prevent the piracy or copyright infringement of our music, which results in lost revenues for rights owners, through the deployment of TCAT. Piracy purportedly costs the global music industry approximately £9 billion per annum in lost revenues, over £300 million of which is lost from the UK music industry's rightsholders, while 38% of global music and video streaming listeners acquire music through illegal exploitation, often without the consumer even knowing it.

 

TCAT detects copyright infringement across the legitimate DSPs by alerting rightsowners to instances of corrupted data, facilitating the removal or correct monetisation of offending tracks.

 

During the year, the TCAT business plan was progressed under the stewardship of Nick Stewart, following his appointment as CEO in February 2022. Nick has over 40 years of music industry experience, having held senior roles at Universal Music and Warner Music among others. Since stepping into the role, he has been leveraging his network and industry knowledge to further establish the TCAT brand and develop its customer base.

 

We believe that TCAT has significant potential and, given industry needs, can become the 'go to' anti-piracy software for the music industry. Following the Board's strategic decision, taken alongside advisors and shareholders, to retain TCAT within the One Media Group, we will continue to oversee and fund its growth with caution, with a view to unlocking further value from its medium-term potential. TCAT's unique set of features position it well for industry leadership, with the right investment and guidance. We believe that its technology offers a solution to many who are not only struggling to battle copyright infringement of their assets, but also to improve the digital fingerprints - or metadata - of their catalogues and recoup the full value of what they have created or own.

 

To help us on this journey, we have invested in our headcount to ensure that we have the right level and type of skillset in software development. As a result, our team across the Group, including TCAT, has increased to 21. The TCAT team's focus for the year will be on continuing to develop the product to ensure that it is on a path to industry leadership, energising the brand and progressing sales initiatives, especially among the major and independent record label community.

 

Finally, at board level, Mark Adams joined us as an independent Non-Executive Director. Mark's background of significant experience in the listed sector and capital markets has already proven invaluable to the business and he is a welcome addition to the Group.

 

Investments and rights management

 

The Company raised £5.6 million of equity (net of costs) in August 2020, of which £5.4 million has so far been invested into the acquisition of eight portfolios of music rights.  These transactions have been completed at an attractive blended multiple of 9 times and have generated an annualised yield of 12% since we acquired them.

 

Where we have made catalogue acquisitions in the year under review, we have maintained our usual disciplined approach resulting in a blended investment multiple of below 11 times.

 

In March 2022, we announced that we had acquired the licensor's share of the royalty income to the Orbital Digital Ltd catalogue of rights, which contains several thousand recordings. Orbital/Rapier Music features more than 40 branded labels across multiple digital platforms including African Lives, All About Blues, Travelscape Records, The Music Shed, Rapier Music, and Sunflash. The catalogue ranges from classical through to dance/hip hop and features a wide array of artists such as José Carreras, Jo Jo Adams, Kool & the Gang, Irish Tenor Trio, Alexander O'Neal, Joe Strummer, Sid Vicious, Chic, Lee Perry, The Lambrettas, Dread Filmstone, Sex Pistols, Suketu, Col Abram, Psy-Co-Billy, Rachel Porter's all female Orchestra and Ebn Ozn. 

 

Whilst the strategic decision has been taken at Group level to prioritise investment into TCAT, our core business of music monetisation remains key.  We view the coming months as an opportunity to consolidate and focus on our existing catalogue of 240,000 recordings, including the global positioning and continued exploitation of these tracks via our partners, The Orchard; wider third party opportunities such as YouTube; and sync licensing of our content for film and television use.

 

Our day-to-day work is largely focused on this aspect of the business, which is how we generate the majority of revenues and deliver value for shareholders. It is a highly specialist skill that requires knowledge of the copyright and rights management landscape, a detailed understanding of the growing opportunities that are available for music and content placement and, importantly, a network of trusted contacts in various roles across the media business and beyond, which gives us early sight of opportunities to monetise our catalogue.

 

The massive growth of television streaming over recent years continues to offer an increasing number of opportunities to secure sync deals, where we agree an initial payment for the licensing of the tracks for use, as well as ongoing payments for any subsequent airing. Our Point Classics catalogue, which is a world leading library of classical music, is a good example of where we agreed several high-profile sync licensing deals during the year, including on Netflix's 'Bridgerton' and the Hulu/Disney+ series 'Only Murders in the Building'. Our classical catalogue was also used by HBO Max, ABC and Amazon Prime.

 

We are always exploring new ways to further maximise the availability of our tracks for commercial use and deepen our relationships with music supervisors, whose role in the industry is to select music for film, TV, adverts, brand partnerships and video games. To date, the sector has lacked an affordable, simple solution for clearing music for film, TV and other uses, including music projects in school and universities. To this end, One Media launched a new annual subscription model for our sync platform, Syncphonnix. Working in a similar way that Shutterstock does for photography and image rights, Syncphonnix reduces time spent on administration and track by track negotiations, providing a regular and more efficient income stream for One Media. It also enables music supervisors to more easily access readily licensed music for their projects, a guarantee not always afforded by larger rightsowners.

 

Via Syncphonnix, tailored annual rates are offered to each customer, based on their sector (film production, education, advertising) and the intended usage. Initially, users will have access to copyright-cleared popular classical music by Mozart, Handel, Bach, Vivaldi, Tchaikovsky, Chopin and others. Subscribers will be able to create and tailor projects via the website app and download broadcast quality files in full, or in specially edited 30-second and five-second stings. The intention is to broaden the platform out to provide tracks through subscription across all genres, including One Media's wider catalogue.

Another major income stream for One Media's digital rights is music streaming. As an illustration of our innovative approach, for World Mental Health Month and World Mental Health Day, One Media partnered with consultant chartered psychologist, Marie-Clare Mendham at UK Psychology Ltd. Together we created a series of five specialist playlists, including calming music for anxiety relief, brain stimulation and music to aid sleeplessness, to mark the day and offer expertly selected music through Spotify.

Maximising the availability of our music to audiences, including through specialist playlists, helps to improve its exposure, increases the number of streams and directly translates into revenues.

 

Market backdrop and outlook

 

Despite economic and political difficulties being felt, unfortunately, around the world, including the ongoing war in Ukraine and the challenges presented by the cost of living, indicators for the music industry remain supportive. Research from the International Federation of the Phonographic Industry ("IFPI") suggests that global recorded music revenues grew for the seventh consecutive year in 2021, increasing by 18.5%.

 

Goldman Sachs, in its annual 'Music in the Air' report, backs this narrative. In June last year, it announced that it had raised its 2022 and 2023 global music forecasts by 7% and 5% respectively. While we have seen redundancies announced across the tech sector and questions around how the cost-of-living crisis might impact discretionary spend, the consensus is that music streaming is unlikely to be affected to any discernible degree. Indeed, Goldman Sachs last year predicted that it would deliver a 12% CAGR over the 2021-2023 period, driven by volume, price and additional emerging opportunities.

 

Moreover, as we have highlighted in the past, the digital marketplace is still a relatively young forum and the format of monetised streaming is less than 15 years old.  There is significant road to run as platforms continue to expand their reach and technological innovations improve access to and recognition of intellectual property rights. In addition, there is a host of burgeoning opportunities across the digital marketplace, including those being created by companies like Meta and Peloton, or, more broadly, Web3, the Metaverse and the growth of non-fungible tokens ("NFTs") and now ChatGPT, OpenAI's latest tool in data research. Our Creative Technicians are already experimenting with where and how the Group's opportunities for further content discovery by consumers will be enhanced by greater technology reducing searching times, linking music to other searched categories during daily interrogation on search engines and greater opportunities to increasingly monetise existing Group owned content. 

 

We remain confident that our model for steady growth and continual investment in copyrights is a proven, recurring cash generative business and the Board and management remain strongly aligned with investors through their 12% shareholding in the Company.

 

The current year's trading has started in line with our expectations.  The Group is well positioned for the year ahead and we continue to work hard on behalf of our shareholders to maintain our positive performance and to deliver secure and growing returns.

 

 

 

 

Michael Infante

Chief Executive and Founder

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Comprehensive Income

For the year ended 31 October 2022

 

 

	Note		Year ended  31 October 2022		Year ended  31 October 2021
			£		£
Revenue	2		5,128,840		4,389,581
Distribution charges			(1,090,703)		(1,107,127)
Royalty costs			(459,115)		(435,386)
Other costs			(253,334)		(66,542)
Net revenue			3,325,688		2,780,526
Amortisation of catalogues			(806,082)		(599,308)
Administration expenses			(1,604,863)		(1,040,706)
Foreign exchange gains/(losses)			34,365		(64,554)
Operating profit			949,108		1,075,958
Share based payments			-		(77,178)
Finance costs			(384,416)		(184,045)
Finance income			-		1
Profit from continuing activities			564,692		814,736
Assets disposal			-		(93,939)
Profit on ordinary activities before taxation			564,692		720,797
Tax expense	3		(126,442)		(176,222)
Profit for period attributable to equity shareholders and total comprehensive income for the year			438,250		544,575
Basic earnings per share	5		0.20p		0.24p
Diluted earnings per share	5		0.16p		0.20p

 

 

The Consolidated Statement of Comprehensive Income has been prepared on the basis that all operations are continuing activities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

For the year ended 31 October 2022

 

 

	Share Capital	Share redemption reserve	Share premium	Share based payment reserve	Retained earnings	Total equity
	£	£	£	£	£	£
At 1 November 2020	1,109,731	239,546	9,473,327	427,221	2,995,824	14,245,649
Proceeds from the issue of new shares	2,500	-	11,250	-	-	13,750
Share based payment charge	-	-	-	77,178	-	77,178
Profit for the year	-	-	-	-	544,575	544,575
Dividends paid	-	-	-	-	(122,345)	(122,345)
At 1 November 2021	1,112,231	239,546	9,484,577	504,399	3,418,054	14,758,807
Proceeds from the issue of new shares	-	-	-	-	-	-
Share based payment charge	-	-	-	-	-	-
Profit for the year	-	-	-	-	438,250	438,250
Dividends paid	-	-	-	-	(122,345)	(122,345)
At 31 October 2022	1,112,231	239,546	9,484,577	504,399	3,733,959	15,074,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Consolidated Statement of Financial Position

At 31 October 2022

 

	Note		At 31 October 2022		At 31 October 2021
			£		£
Assets
Non-current assets
Intangible assets	7		14,438,031		13,484,077
Property, plant and equipment	8		12,998		44,007
			14,451,029		13,528,084
Current assets
Trade and other receivables			1,472,369		1,481,077
Cash and cash equivalents			2,175,663		2,565,813
Total current assets			3,648,032		4,046,890
Total assets			18,099,061		17,574,974
Liabilities
Current liabilities
Trade and other payables			993,646		937,622
Deferred tax			158,253		132,830
Total current liabilities			1,151,899		1,070,452
Borrowings			1,872,450		1,745,735
Total liabilities			3,024,349		2,816,187
Equity
Called up share capital			1,112,231		1,112,231
Share redemption reserve			239,546		239,546
Share premium account			9,484,577		9,484,577
Share based payment reserve			504,399		504,399
Retained earnings			3,733,959		3,418,054
Total equity			15,074,712		14,758,807
Total equity and liabilities			18,099,061		17,574,974

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated and Company Cash Flow Statement

For the year ended 31 October 2022

 

	Year ended  31 October 2022 Group		Year ended  31 October 2021 Group		Year ended  31 October 2022 Company		Year ended  31 October 2021 Company
	£		£		£		£
Cash flows from operating activities
Operating profit/(loss) before tax	564,692		720,798		(49,801)		(418,586)
Amortisation	806,082		599,169		-		369,263
Depreciation	40,577		50,509		-		-
Share based payments	-		77,178		-		77,178
Finance income	-		(1)		-		(1)
Finance costs	384,416		184,045
(Increase)/decrease in receivables	(24,879)		(313,783)		(414,111)		- (4,070,290)
Increase/(decrease) in payables	(175,323)		(69,144)		23,402		144,017
Corporation tax paid	(14,926)		(72,063)		-		-
Net cash inflow/(outflow) from operating activities	1,580,639		1,176,708		(440,510)		(3,898,419)
Cash flows from investing activities
Investment in intellectual property rights and TCAT	(1,760,036)		(5,199,087)		-		-
Investment in property, plant and equipment	(9,569)		(3,257)		-		-
Finance income	-		1		-		1
Net cash used in investing activities	(1,769,605)		(5,202,343)		-		1
Cash flows from financing activities
Net proceeds from the issue of new shares	-		13,750		-		13,750
Finance cost paid	(205,554)		(114,873)		-		(114,873)
Bank loan	1,900,000		-		1,900,000		-
Loan notes repayment	(1,900,000)		-		(1,900,000)		-
Loan notes	126,715		48,492		126,715		48,492
Dividend paid	(122,345)		(122,345)		(122,345)		(122,345)
Net cash inflow/(outflow) from financing activities	(201,184)		(174,976)		4,370		(174,976)
Net change in cash and cash equivalents	(390,150)		(4,200,611)		(436,140)		(4,073,394)
Cash at the beginning of the year	2,565,813		6,766,424		2,314,653		6,388,047
Cash at the end of the year	2,175,663		2,565,813		1,878,513		2,314,653

 

 

 

 

Notes to the Preliminary Results

 

1.   Basis of preparation

 

The Company is a public limited company incorporated and domiciled in England under the Companies Act 2006. The Board has adopted and complied with International Financial Reporting Standards (IFRS) as adopted by the European Union. The Company's shares were admitted for trading on the AIM market of the London Stock Exchange on 18 April 2013.

 

2.  Segmental Analysis

 

IFRS 8 'Operating Segments' requires the Group's segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker to allocate resources to the segments and to assess their performance. The Chief Operating Decision Maker is considered to be the Chief Executive Officer of One Media IP Group Plc.

 

The Chief Operating Decision Maker receives and reviews segmental operating profit. Certain central administrative costs including Group Directors' salaries are included within the Group's Licenses result. This is consistent with the results as reported to the Chief Operating Decision Maker.

 

Each segment is shown net of intercompany transactions and balances within that segment. The eliminations remove intercompany transactions and balances between the different segment which primarily relate to the net draw down of loans and short-term working capital funding provided by One Media IP Group Plc to the other company in the Group. Inter-segment transactions are undertaken in the ordinary course of business on arm's length terms.

 

Information regarding the Group's reportable operating segments for the year ended 31 October 2022 is shown below:

 

Income statement	Licenses £	TCAT £	Total £
Revenue	4,761,943	366,897	5,128,840
Distribution charges	(1,090,703)	-	(1,090,703)
Royalty costs	(459,115)	-	(459,115)
Other costs	(78,730)	(174,604)	(253,334)
Net revenue	3,133,395	192,293	3,325,688
Amortisation	(720,635)	(85,447)	(806,082)
Administration expenses	(1,146,172)	(458,691)	(1,604,863)
Foreign exchange gains	25,804	8,561	34,365
Operating profit	1,292,392	(343,284)	949,108
Finance costs	(356,732)	(27,864)	(384,416)
Profit / (loss) before taxation	935,660	(370,968)	564,692
Tax expense			(126,442)
Profit for the period			438,250

 

 

 

Total assets and liabilities	Licenses £	TCAT £	Eliminations £	Total £
Total assets	18,318,839	1,458,896	(1,678,674)	18,099,061
Total liabilities	(2,930,914)	(1,772,109)	1,678,674	(3,024,349)
Total segment net assets/ (liabilities)	15,387,925	(313,213)	-	15,074,712

 

 

 

 

 

 

Geographical information

 

Revenue is the amount attributable to the Group's principal activity undertaken in the United Kingdom. The geographic split of Group revenue is as follows:

 

Revenue			Year ended  31 October 2022		Year ended  31 October 2021
			£		£
United Kingdom			345,121		148,866
North America & rest of world			4,244,479		3,909,097
Europe			539,240		331,618
			5,128,840		4,389,581

 

The Group considers it has two business segments with its Profit from the acquisition and exploitation of mixed media intellectual property rights for distribution and a SAAS platform, ultimately earned from its sole activity in the United Kingdom.

Revenue by segment					Year ended  31 October 2022		Year ended  31 October 2021
					£		£
Licenses and other media intellectual property					4,761,943		4,243,787
TCAT					366,897		145,794
					5,128,840		4,389,581

 

Included in revenues for the year ended 31 October 2022 it is estimated that £819,000 (2021: £867,000) is from its largest ultimate customer and £410,000 (2021: £412,000) from its second largest ultimate customer. Together these represent 24% (2021: 29.1%) of the total Group revenue for the year. In addition, the company relies on a distribution aggregator (The Orchard) who channels approximately 51% (2021: 63%) of the Group's turnover.

 

 

3.  Taxation

 

			Year ended  31 October 2022		Year ended  31 October 2021
			£		£
Analysis of the charge for the year
UK corporation tax charge			105,703		171,122
Deferred tax			20,739		5,100
			126,442		176,222

The standard rate of tax for the year, based on the UK standard rate of corporation tax is 19% (2021: 19%). The actual tax charge for the periods is different than the standard rate for the reasons set out in the following reconciliation:

 

Reconciliation of current tax charge			Year ended  31 October 2022		Year ended  31 October 2021
			£		£
Profit on ordinary activities before tax			564,692		814,737
Tax on profit on ordinary activities at 19% (2021: 19%)			107,292		154,800
Effects of:
Non-deductible expenses			13,619		18,071
Adjustments to tax charge in respect of previous periods			-		-
Fixed asset timing differences			8,225		5,100
Depreciation in excess of capital allowances			5,719		8,768
Research and development			(8,413)		(10,517)
Total tax charge			126,442		176,222

 

4. Employee information

 

			Year ended  31 October 2022		Year ended  31 October 2021
			£		£
Directors' emoluments - excluding applicable share option and pension charges			485,292		390,565
Fees paid to directors			69,274		59,688
Share option charge			-		77,178
TCAT staff payroll and expenses			752,701		534,894
Wages and salaries			188,589		158,439
Social security			46,540		58,679
Pension			8,340		7,011
Benefit in kind			-		1,068
			1,550,736		1,287,522

The average monthly number of Group employees (excluding non-executive directors) during the year was as follows:

 

			Year ended  31 October 2022		Year ended  31 October 2021
Technical, creative technicians and management			12		11
Developers and management (TCAT Ltd)			9		7

 

 

5.  Earnings per share

 

The weighted average number of shares in issue for the basic earnings per share calculations is 222,446,249 (2021: 222,446,249) and for the diluted earnings per share assuming the exercise of all warrants and share options is 267,779,582 (2021: 267,606,979).

 

The calculation of basic earnings per share is based on the profit for the period of £438,251 (2021: £544,575). Based on the weighted average number of shares in issue during the year of 222,446,249 (2021: 222,446,249) the basic earnings per share is 0.20p (2021: 0.24p). The diluted earnings per share is based on 267,779,582 shares (2021: 267,606,979) and is 0.16p (2021: 0.20p).

 

6.  EBITDA

 

Profit from continuing activities before interest, tax, depreciation and amortisation for the twelve months ended 31 October 2022 was £1,795,768 (2021: £1,648,459).

 

7.  Intangible assets - Group

 

			Licenses and other intangibles		TCAT		Total Intangible assets
			£		£		£
Cost
At 1 November 2020			11,214,491		-		11,214,491
Additions			4,438,554		854,472		5,293,028
Disposals			(93,939)		-		(93,939)
At 31 October 2021			15,559,106		854,472		16,413,578
Additions			1,225,577		534,459		1,760,036
Disposals			-		-		-
At 31 October 2022			16,784,683		1,388,931		18,173,614
Amortisation
At 1 November 2020			2,330,332		-		2,330,332
Charge for the year			553,369		45,800		599,169
Disposals			-		-		-
At 31 October 2021			2,883,701		45,800		2,929,501
Charge for the year			720,635		85,447		806,082
Disposals			-		-		-
At 31 October 2022			3,604,336		131,247		3,735,583
Net book value
At 31 October 2022			13,180,347		1,257,684		14,438,031
At 31 October 2021			12,675,405		808,672		13,484,077

 

 

8.  Property, plant and equipment - Group

 

	Office equipment		Fixtures and fittings		Right of Use assets		Total
	£		£		£		£
Cost
At 1 November 2020	70,580		11,294		98,692		180,566
Additions	3,256		-		-		3,256
Disposals	-		-		-		-
At 31 October 2021	73,836		11,294		98,692		183,822
Additions	9,569		-		-		9,569
Disposals	-		-		-		-
At 31 October 2022	83,405		11,294		98,692		193,391
Depreciation
At 1 November 2020	65,723		11,096		12,487		89,306
Charge for the year	3,351		198		46,960		50,509
Disposals	-		-		-		-
At 31 October 2021	69,074		11,294		59,447		139,815
Charge for the year	4,190		-		36,388		40,578
Disposals	-		-		-		-
At 31 October 2022	73,264		11,294		95,835		180,393
Net book value
At 31 October 2022	10,141		-		2,857		12,998
At 31 October 2021	4,762		-		39,245		44,007

 

Directors' responsibilities

 

The Annual Report, including the financial information contained therein, is the responsibility of, and was approved by the directors on 28 March 2023.

 

Availability of Report and Accounts

 

Copies of the Company's Report and Accounts will be posted to shareholders shortly. Copies of the Company's Report and Accounts will also be available at the registered office of the Company and can be viewed on the Company's website, www.omip.co.uk.

 

Caution regarding forward looking statements

 

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities.