The March results for this refunded music IP group should show a very positive outlook.
For music buffs – I am setting a question: What do George McCrae, Merle Haggard, Ricky Valance, Edwin Starr, Evelyn Thomas, Mungo Jerry, Eric Burdon, the Troggs, Marv Johnson and the Royal Philharmonic Orchestra have in common?
| Master Investor Magazine
Never miss an issue of Master Investor Magazine – sign-up now for free! |
One Media IP (LON:OMIP) is the answer – they are all among the company’s catalogue of nostalgic music tracks from a range of genres spanning soul to classical music and rock to pop and including performances from over 1,700 diverse artists.
And why is that of interest? On its own – not a lot. But to OMIP they all mean business.
That is obviously what appealed to Lord Grade, (formerly Channel 4, BBC, ITV and goodness knows what else) and Ivan Dunleavy, (formerly boss of Pinewood and Shepperton Studios), when they moved in to the shares in December 2017.
One Media, built up by Michael Infante since 2005, is a UK AIM listed digital media content provider that exploits intellectual property rights around music, video and copyright technology. Driven by the growth in streaming, the company is dedicated to expanding the business through acquisition of new content and the promotion of its existing catalogue. The impact of streaming is expected to positively benefit music publishing revenues, which Goldman Sachs believes will rise from $5.4bn in 2015 to $9.3bn in 2030.
It is an ‘intellectual property’ owner and controller of music and video rights and a B2B and B2C digital content provider, licensing intellectual property rights for music and video. It exploits its catalogue of over 250,000 music tracks and 10,000 hours of video by re-compiling its content for download, streaming and sublicensing through over 600 territorial digital music and video content aggregators including iTunes, Spotify, Amazon, Google, Deezer, Tidal, Audible and YouTube.
One Media focuses on music performed by well-known artists from every genre, from classical, Rock, Pop through to Soul and R&B as well as celebrity spoken word. Its classical music library of over 10,000 performances includes the Point Classics catalogue, comprising some of the most renowned masterpieces by the world’s greatest composers.
The company also owns the rights to Men & Motors, over 3,400 hours, available for viewing on One Media’s YouTube Channel. It is looking to rework the format for digital TV broadcast in the future. Its library of content is available for TV, movies, adverts and websites requiring synchronised music.
Additionally, the company has developed the Technical Copyright Analysis Tool, a platform developed as a means of automating the difficult and time-consuming task of monitoring for unauthorised use of digital music releases. TCAT allows record companies, publishers and law firms to search certain digital stores, such as iTunes, Apple Music and Spotify, and carry out a forensic digital audit on behalf of owners to ensure that their music has not been used without licensing agreements being in place. A major record label and the largest independent music distributor are now using this service.
Overall, 80% of the group’s revenues were from its audio exploitation business, with video licensing making up the balance. Revenues from the use of TCAT are still relatively small.
There was a recent successful fundraising, £2.9m in new funds and £6m in 7% loan notes. The ordinary shares were placed at 6p each, which was on adiscount of approximately 42.2% to the closing price of 10.375p on 30 August 2018, the day before it was announced.
Significant shareholders after the August 2018 fundraising and as of early January 2019 included: Canaccord Genuity – 27,000,000, 20.0%; Michael Infante – 25,577,862 shares, 18.9%; BGF Investment Management – 10,000,000, 7.4%; Helium Special Situations Fund – 9,111,108, 6.7%; Ivan Dunleavy – 8,125,000, 6.0%; Lord Michael Grade – 8,125,000, 6.0%; Gresham House – 4,925,000, 3.6%; and Spreadex – 4,271,100, 3.2%. There is a total of 135,603,699 in issue.
At the time of the company’s Interim Results, the Board reported “continued strong trading and healthy cash position. The current period was pivotal as the company continues to exploit and take full advantage of the ongoing shift towards streaming. Before related fundraising transaction costs, the Board is pleased to report that trading is in line with expectations for the year ended 31 October 2018 and the Board looks forward to the future with confidence.”
The company’s full year results are expected to be released next month – they will obviously bear the fundraising costs as an exceptional item. Even so I do anticipate a bullish outlook for 2019 and further ahead. It is not so much the latest results as the potential for this company.
With Dunleavy and Grade aboard and being instrumental in its push forward, I expect the shares, now just 5.75p, to be moving up to trade at around its pre-funding level of 10p in the near future.