One Media Regulatory News (OMIP)

19th February 2014 One Media IP Group Plc ("One Media" or the "Group") Preliminary Results Strong Performance with Profit from continuing operations up 22.4% and Turnover up 26.8% One Media iP (AIM: OMIP), the digital media content provider which exploitsintellectual digital property rights around music, video and spoken word, ispleased to announce its Preliminary Results for the year ended 31st October2013, the Group's maiden results statement to shareholders since moving to theAIM market in April 2013. Financial Highlights * Revenue up 26.8% to £2,649,130 (2012: £2,089,841); * Profit before tax from continuing operations, excluding AIM flotation and associated costs, up 22.4% to £523,648 (2012: £427,674); * Cash balances of £1,688,093 at 31st October 2013 (2012: £368,655); * Dividends paid in year ending 31st October 2013, totalling £70,135 (2012 £ 70,974), the first on the 29th November 2012 at 0.037p per share and a further Dividend on the 9th July 2013 of 0.078p per share; * Successful listing and Placing on AIM in April 2013 raising £750,000 at 8p per share; and * USD$2.5m (GBP£1.6m) advance against royalties received from The Orchard, the Group's digital distributor. Operational Highlights * Acquisition of Men & Motors catalogue of rights from Granada/ITV, and subsequent launch as a YouTube channel alongside 15 other YouTube channels, including music and special interest, children's content and comedy; * USD $100,000 acquisition of video catalogues, including `The Adventures of Skippy'; `Alien Autopsy' and an extension of its existing rights and terms to a previously acquired catalogue of over 400 hours of music documentaries; * USD $122,550 acquisition of over 300 children's animal documentaries, a selection of `Keep Fit' video content and a contribution to buying out various royalty streams that will improve Group margins on digital sales of previously acquired content; and One Media CEO & Executive Chairman, Michael Infante, commented: "The Board is pleased with the strong performance of the Group in the periodunder review. One Media is a profitable, debt free and cash resourced mediabusiness with a continuing and sustainable dividend policy in place. The Boardlooks forward to enhancing both shareholder value and consumer digitalexperiences in 2014 and beyond, capitalising on its new listing on AIM andgrowing underlying value. I would like to thank all of the One Media team for their support alongside ouradvisers and shareholders." The financial information set out in this Preliminary announcement has beenextracted from the audited Report and Financial statements and does notconstitute the Company's statutory accounts for the year ended 31 October 2013. The report of the auditor on the Report and Financial Statements for the yearended 31 October 2013 is unqualified. The Group's Preliminary results announcement for the year ended 31 October 2013can be viewed on the Company's website, www.onemediaip.com, with effect fromWednesday 19th February 2014. For further information, please contact: One Media Publishing 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 Tel: +44(0)7799 003 220Ranger CEO & Executive Chairman's Statement 2013 was a transformational year for the Group as One Media continued to buildon its strong foundation of solid profitability and commercial expertise. This year under review marks the end of a highly productive and busy period forOne Media: achieving key financial targets, successfully listing the Group onAIM and maintaining growth. The Board is pleased with the Group's financialperformance and sees its dividend policy to be continuing and sustainable. Following a period of uncertainty surrounding the future of the ICAP Securities& Derivatives Exchange ("ISDX"), the Board concluded that the time wasopportune for One Media to move to AIM to further grow and protect shareholdervalue. This was achieved in April 2013 following a successful placing. Thedecision to move markets followed months of careful planning and resulted in aswift, cost effective and well-publicised transaction where Group shares wereplaced to a `core' number of institutional investors raising £750,000. The total cost of the listing was completed at acomparatively low cost of £247,060 of which £196,559 is in the profit and lossaccount and £50,501 set against the share premium account. I would like to thank management, staff and our advisory teams for all theirhard work during this intensive period. The Group, which remains profitable,debt free and cash resourced, is well positioned to pursue its acquisitivepolicy of intellectual copyrights and growth. Financial Overview Once again this year we have seen our revenue grow with a final reported figureof £2,649,130, an increase of 26.8% on the £2,089,841 last year. Profit fromcontinuing operations, before the £196,599 spent on the AIM float, is reportedat £523,648, a 22.4% improvement on the equivalent figure of £427,674 for 2012.On a "like for like" basis, profit after tax from continuing operations in 2013is, after an estimated tax charge of £104,683 (2012: £88,668), up 24.3% at £421,765 from the reported £339,220 for the financial year ended in October2012. The profit after tax attributable to equity shareholders of £238,909 (2012: £339,220), reported for the financial year, is after costs of £196,559 relatingto the AIM float (2012: £nil) and a tax charge of £90,980 (2012: £88,668). At the end of the year we have cash balances of £1,688,093 (2012: £368,655),having raised in the Placing on AIM a gross amount of £750,000, which, afterall costs, revenue and capital, resulted in a net fundraising of £502,940. Inaddition, during the year employees exercised at various times, options andwarrants raising a further £23,000. Operationally we received from The Orchard,the Group's digital distributor, an advance of USD$2.5m (GBP£1.6m) againstroyalties. Finally two dividends paid in the year totaled £70,135 (2012 £70,974). Thefirst was paid on the 29th November 2012 at 0.037p per share and the second on9th July 2013 of 0.078p per share. Content and Rights Acquisition Historically, the Group has regularly reported its various catalogueacquisitions and marketing initiatives via the Regulated News Service (RNS)system. As part of our AIM strategy this will be reserved for price sensitiveinformation and key corporate news. We will be using the RNS Reach services fornon-price sensitive information and followers of One Media will find us veryproactive on both Twitter and Facebook together with our web sitewww.onemediaip.com for more day to day information. Before I expand into the content and rights acquisitions of the past financialyear, I would firstly like to address One Media's corporate strategy and how itmonetises content is outlined below. There are many misnomers on how money isearned when it comes to consuming content on legitimate, free-to-view websites. It is obvious when it comes to `downloading' an audio track from anonline retailer such as iTunes, the consumer pays a set fee for a music track/video and receives the content to their device. So how do YouTube and otherfree streaming sites work for us? Advertising revenues or `Ad-funded' as it is known, achieves this. For everysecond that a track/video is streamed One Media receives a portion of theadvertising revenues paid by the advertisers that appear either within the film(as a banner) or on the `side bars' of a screen or as pre-roll adverts that theconsumer must view prior to engaging in the chosen video. Additional revenue isearned should the consumer `click through' for further information on aparticular advert. On some sites there is additionally a subscription to pay inwhich the content provider becomes a share participant based on the number oftracks/minutes consumed. Video content During the period under review, the Board made some significant investmentsinto both audio and video to enhance One Media's content libraries. Our intention to focus primarily on video content was spearheaded by the dealsecured with Granada/ITV; following Granada's decision to take the Men & MotorsTV Channel off air in 2010 to make way for their High Definition (HD) broadcastchannels, One Media acquired the 3,000+ episodes for its `on-line' digitallydelivered initiative via YouTube and other similar sites. The first task was todisseminate the original broadcast tapes into a digital format that could beeasily manipulated into a data friendly format, compatible with the Group'sinternal music management system, so that our Creative Technicians couldrepackage/repurpose the shows. Utilising the services available here at Pinewood Studio it is pleasing to seein a short time we have converted all of the 3,000 programs and created afurther 12,500 short excerpts from the original programs within the first year.The excerpts are predominantly short two to three minute clips from the showsthat have been deemed entertaining for digital broadcast via YouTube for homeor mobile entertainment. These have been well received and we are creating astrong following of digital video viewers. In addition, the Group is indiscussions with third parties for further usage of the Men & Motors brand andcontent and we look forward to bringing you more news on this in the future. To further the Group's initiative of focusing on nostalgic videos, One Mediaacquired control under license of a variety of TV shows. In November 2012, the Group acquired the classic Sooty TV shows. This includedeight TV shows presented by Sooty's creator, Harry Corbett. The shows date backto the original Sooty episodes of the 1950s through to the 1970s including suchclassics as `The Sooty Olympics' and `Sooty's Birthday'. The popularity of theSooty brand, which we believe is a British media icon, remains popular withtoday's `pre-school' groups. In the first half of this financial year, One Media acquired under license `TheAdventures of Skippy', as well as `Skippy the Movie', that were first producedin the 1990s. These episodes follow on from the original `Skippy' series of the1960s, and developed a widespread following when first broadcast. These havebeen made available for viewing on the Group's YouTube, `Skippy Channel'. During this period, the Group also acquired the footage of an `Alien Autopsy'and the documentaries relating to the 1990s autopsy on the body of anextra-terrestrial purported to have been recovered from the crash of a UFO nearRoswell, New Mexico. The Group's acquisition initiative often involves revisiting previouslycompleted deals to either extend or improve the terms of agreement. The Boardis pleased to report that it has secured exclusive digital rights to acatalogue of video programs first licensed to the Group in September 2011.Containing over 400 hours of content, the 200+ music video-documentariesfeature behind-the-scenes and `fan-based special feature' looks at artists suchas; David Bowie, the Rolling Stones, Marc Bolan, Limp Bizkit, Lennon & Harrison(the Guitars that Gently Weep), Thin Lizzy, Elvis, Bob Marley, The RoyalPhilharmonic Orchestra, Andy Williams and the late Tony Bennett. Along with extending licensing deals One Media is also committed to profitmargin improvement. The Board does not hesitate to use the Group's cashresource to invest in content that has a proven track record under ourstewardship. This was demonstrated by the USD$122,550 used to buy-out variousonward royalty commitments on past deals, which the Group believes to be asound investment. Finally, at the end of October 2013, we acquired under license the videodistribution rights for over 300 `Animal video documentaries' targeted atyounger viewers, `Keep Fit' video material for the health conscience and`Underground Breakdance' video content for the acrobatic. This has furtherdiversified our portfolio of video offering, which we believe is essential ingrowing our market share. Market Overview The digital world is evolving at a fast pace and we are making sure that wekeep up with the developments. iTunes and Amazon remain the largest digitaldownload retailers but the `streaming stores' such as Spotify and Deezer andare becoming increasingly important as the digital markets mature. The Boardanticipates these models becoming stronger over the coming years with newstreaming services such as `Beats Music', `Apple Radio' and the anticipatedlaunch of `YouTube Music' set to enhance this growing sector. It is still tooearly to analyse the worldwide music industry digital data for Calendar year2013 on the growth of digital music, but what we do know is that according toNielson (an industry data source), in the USA, music streaming grew 32% to118bn transactions. "Despite shifts in how music is consumed, we see continued growth in overallmusic consumption," reported Nielsen, "the industry remains vibrant asconsumption continues to change and expand." As a cautious management team, we carefully analyse the impact of streamingover downloading as part of our day-to-day business. We greet the streamingmodels with enthusiasm and anticipate their importance to the digital marketwill be as important as the introduction of downloading changed the marketsback in 2006 when One Media first started and physical product had the lion'sshare of the market. We also see social media playing a far greater role in the marketing of theGroup's content via the many digital stores with which we trade. We havededicated Twitter and Facebook pages which can be accessed via our website andare used to further our interaction with the market. Broadband providers with their increasing band width now cater for film in highdefinition to be streamed to every device, whether static or on the move andthe advent of `Smart TVs will completely change the way we engage with ourvideo entertainment. A `Smart TV' is now fully enabled to receive more thanjust the programming broadcasted by either terrestrial or satellitebroadcasters constrained within our shores, but also Wi-Fi. Furthermore, thenew world of `Apps' gives access to both national and international viewing viaWi-Fi from ones broadband supplier. This will allow content delivery servicesto supply the public with `genre friendly content' tailored to their individualviewing requirements and made available as and when the consumer is ready toview. In the same way that web pages work, `Play listing' and recommendationsfrom your previous viewing experiences are immediately `on hand' to guide youthrough the millions of hours now available on-line to view. At present YouTubeleads this advance but we expect many more `free-to-view' platforms to launchwithin the near future. One Media believes this will significantly increase theamount of content that users are consuming on a daily basis. The new challenge facing viewers is how to find time to watch everything thatis available. From the home entertainment revolution, as aforementioned,coupled with the in-car revolution, with cars moving to `Bluetooth' and `4G',One Media anticipates a growing demand of content, both old and new, to meetthis new technologically savvy audience. Employees As Chairman and Chief Executive, and on behalf of my fellow Board members, Iwould like to formally thank our staff for the contribution they have made in ayear where we have continued to grow our business successfully. It is our aimto become a leading player within our space. It is the enthusiasm, dedicationand creativity of our wider team that realises the delivery of our strategyeach year. Our staff remains motivated and are committed to the achievement ofour agreed 2014 business plan, which projects further growth across all aspectsof the Group. Outlook The Group's modus operandi of supplying all routes to market with nostalgiccontent is now well established within the digital community; `Content is King'remains our basic mantra. We are repurposing our vast library of content tosuit consumer requirements, whether it be for a three minute clip for a mobiledevice or a full length version of a programme for television. This will be keyin our success in light of the developments we have identified in the marketoverview above. One Media's team of Creative Technicians remain diligent in the preparation ofboth audio and visual content in defining the metadata, our digital DNA, whichremains key to identifying and finding One Media content online and adhering tothe moving pace of the digital stores individual `style guides'. This is the`hub' of One Media's marketing initiative. The Board anticipates furtherexpansion and investment in the Group's expansive library of content in thecoming period. One Media invests time and expertise to fully understand the changing natureand viewing habits of its consumers, in order to adapt content to matchconsumer routines. With the considerable amount of content being input intocyberspace on the increase, our teams are trained to not only monitor thecontent being produced but also further promote and market our content throughall aspects of social media. We believe 2014 will continue to be a progressive year for One Media. Thedigital music and video industry remains in a state of evolution and yourCompany will continue to exploit and develop its model to meet the demands ofthese changes as it has done since its launch in 2006. One Media has continuedto acquire further content, within our digital arena, enhancing our catalogueand library of rights. The Group retains a strong cash position; is debt free;profitable and is paying a healthy dividend. The digital music and video industry remains in a state of evolution and yourCompany will continue to exploit and develop its model to meet the demands ofthese changes as it has done since its launch in 2006. We are focusing ongreater exploitation combined with our growing industry market knowledge todeliver more shareholder-enhanced value within the sectors in which we operate. The Board looks forward to enhancing both shareholder value and consumerdigital experiences in 2014 and beyond, capitalising on its new listing on AIMand growing underlying value. Michael Infante JP Chairman and CEO 19TH February 2014 Consolidated Statement of Comprehensive Income For the year ended 31 October 2013 Year ended Year ended 31 October 31 October 2013 2012 £ £ Revenue 2,649,130 2,089,841 Cost of sales (1,273,592) (983,374) Gross profit 1,375,538 1,106,467 Administration expenses (851,890) (678,793) Profit from continuing 523,648 427,674operations Other expenses -AIM float (196,559) -and associated costs Operating profit 327,089 427,674 Finance income 2,800 214 Profit on ordinary 329,889 427,888activities beforetaxation Tax expense (90,980) (88,668) Profit for period 238,909 339,220attributable to equityshareholders Basic adjusted earnings 0.70p 0.73pper share Diluted adjusted earnings 0.61p 0.62pper share Basic earnings per share 0.40p 0.73p Diluted earnings per 0.35p 0.62pshare The Consolidated Statement of Comprehensive Income has been prepared on thebasis that all operations are continuing activities. Consolidated Statement of Changes in Equity For the year ended 31 October 2013 Share Share Share Share Retained Total Capital redemption premium based earnings equity reserve payment reserve £ £ £ £ £ £ At 1 November 2011 218,143 239,546 643,271 4,791 119,537 1,225,288 Proceeds from the 55,000 - 75,000 - - 130,000issue of newshares Share based - - - 7,625 - 7,625payment charge Profit for the - - - - 339,220 339,220year Dividends - - - - (70,974) (70,974) At 1 November 2012 273,143 239,546 718,271 12,416 387,783 1,631,159 Proceeds from the 51,625 - 670,874 - - 722,499issue of newshares Share based - - - 13,776 - 13,776payment charge Profit for the - - - - 238,909 238,909year Dividends - - - - (70,135) (70,135) At 31 October 2013 324,768 239,546 1,389,145 26,192 556,557 2,536,208 The following share capital transactions were undertaken: For the year ending 31 October 2012: * During the year a total of 11,000,000 warrants were exercised by Directors and Employees between June and September 2012. As summarised above, the nominal value of the warrants exercised was £55,000 and the Share premium arising was £75,000. . For the year ending 31 October 2013: * During the year a total of 9,375,000 ordinary shares of 0.5p each were issued at 8p pursuant to the Placing on the AIM market, a total of £750,000 being raised with costs associated with the issue at £50,501. * In addition Employees exercised, at various time during the year, a total of 700,000 options at 2.75p a share and 250,000 warrants at 1.5p a share over ordinary shares of 0.5p each. The total raised as a result of these exercises was £23,000. Consolidated Statement of Financial Position at 31 October 2013 Year ended Year ended 31 October 31 October 2013 2012 £ £ Assets Non-current assets Intangible assets 1,808,535 1,442,140 Property, plant and equipment 26,439 47,755 1,834,974 1,489,895 Current assets Trade and other receivables 481,453 405,762 Cash and cash equivalents 1,688,093 368,655 Total current assets 2,169,546 774,417 Total assets 4,004,520 2,264,312 Liabilities Current liabilities Trade and other payables 1,468,312 633,153 Total liabilities 1,468,312 633,153 Equity Called up share capital 324,768 273,143 Share redemption reserve 239,546 239,546 Share premium account 1,389,145 718,271 Share based payment reserve 26,192 12,416 Retained earnings 556,557 387,783 Total equity 2,536,208 1,631,159 Total equity and liabilities 4,004,520 2,264,312 Consolidated Company Cash Flow Statement For the year ended at 31 October 2013 Year ended Year ended 31 October 31 October 2013 2012 Group Group £ £ Cash flows fromoperating activities Operating profit 329,889 427,888before tax Amortisation 118,959 98,296 Depreciation 27,389 25,106 Share based payments 13,776 7,625 Finance income (2,800) (214) (Increase) in (75,691) (102,229)receivables Increase/(decrease) in 819,873 210,176payables Corporation tax paid (75,694) (82,410) Net cash inflow from 1,155,701 584,238operating activities Cash flows frominvesting activities Investment in (485,354) (643,431)intellectual propertyrights Investment in (6,073) (41,162)property, plant andequipment Finance income 2,800 214 Net cash used in (488,627) (684,379)investing activities Cash flows fromfinancing activities Proceeds from the 773,000 130,000issue of new shares Share issue costs (50,501) - Dividends paid (70,135) (70,974) Net cash inflow 652,364 59,026(outflow) fromfinancing activities Net change in cash and 1,319,438 (41,115)cash equivalents Cash at the beginning 368,655 409,770of the year Cash at the end of the 1,688,093 368,655year Notes to the Preliminary Results Basis of preparation The Company is a limited company incorporated and domiciled in England underthe Companies Act 2006. The board has adopted and complied with InternationalFinancial Reporting Standards (IFRS's) as adopted by the European Union. TheCompany's shares are listed on the ICAP ISDX market. Earnings per share The weighted average number of shares in issue for both the basic earnings pershare calculations is 59,999,725 (2012: 46,769,794) and for both the dilutedearnings per share assuming the exercise of all warrants and share options is69,244,109 (2012: 54,639,657). * The calculation of adjusted earnings per share, on profit after tax from continuing activities, is based on the profit for the period of £329,889, after adding back Other expenses - AIM float and associated costs of £ 196,559 and adjusting for a tax charge of £104,683 to reflect the underlying profit. A profit after tax of £421,765 results, which is directly comparable with the previously reported figure for 2012 of £ 339,220. Based on the weighted average number of shares in issue during the year of 59,999,725 (2012: 46,769,794) the basic earnings per share is 0.70p (2012: 0.73p). The diluted earnings per share is based on 69,244,109 shares (2012: 54,639,657) and is 0.61p (2012: 0.62p). * The calculation of the basic earnings per share is based on the profit for the period of £238,909 (2012: £339,220) divided by the weighted average number of shares in issue of59,999,725 (2012: 46,769,794), the basic earnings per share is 0.40p (2012:0.73p). The diluted earnings per share, assuming the exercise of all warrantsand options is based on 69,244,109 (2012: 54,639,657) shares and is 0.35p(2012: 0.62p). EBITDA Profit from continuing activities before interest, tax, depreciation andamortisation for the twelve months ended 31 October 2013 was £669,996 (2012: £551,076). Directors' responsibilities The Annual Report, including the financial information contained therein, isthe responsibility of, and was approved by the directors on 12th February 2014. Availability of Report and Accounts and Notice of the Annual General Meeting Copies of the Company's Report and Accounts together with the Notice of theAnnual General Meeting, to be held at 11.00a.m on Thursday 27th March 2014 atPinewood Studios, were posted to shareholders on 18th February 2014. Copies ofthe Company's Report and Accounts will also be available at the registeredoffice of the Company and can be viewed on the companies website,www.onemediaip.com 623 East Props BuildingPinewood StudiosPinewood RoadIver HeathBuckinghamshireSL0 0NH