One Media Ip Share Discussion Threads

[harrogate] 03/9/2018 13:05

Hi. I have been a shareholder for years and the question you ask is very valid - but I think impossible to answer. Many of the smaller catalogues they bought originally I suspect had no revenue stream as they weren't even digitised and much work went into these catalogues by OMIP to do that and prepare them for online sales. So you have the lead times, the low level nature of the music, the fact that we get the revenue in $ and the rate has been all over in the period in question and then the impact of the move from download to steaming which was clearly negative in the short term but could be beneficial longer term. So the calculation of return on spend is very tricky. What must be true though is that if they are moving up the foodchain on value of rights these rights they buy with the new warchest will likely already have a revenue stream in place. If that is the case you would have thought that for example a catalogue that produces £1m couldn't be bought for £10m or everyone would do it for a 10% return - unless OMIP add value through distribution or developing the catalogue by other means - I don't know any of the answers but it will be fascinating to see what happens now.

[yump] 03/9/2018 10:05

Been doing a bit of digging/thinking/rambling on the subject of the value of rights. Presumably a big proportion of OMIP rights can earn for a long time and this may be borne out by the value of intangible assets (rise and fall) on the balance sheet. This is a big like looking for a black cat in a dark room, but better than nothing. Could possibly assume that at some point, the ratio of the intangible assets vs. the revenue, might allow some predictive revenue calcs. ? If an asset becomes less valuable over time (because there is a finite date on which the asset will no longer earn), then would expect to see decreases. On the balance those assets are about £3.4mln and they've been at that level since 2014. In 2013 it was about 1.8mln. So 1.6mln was added in the year to Oct 2014, which coincides with a spend of about the same on the Point Classics catalogue + other. Unfortunately shortly afterwards revenue dropped. Currently then, £3.4mln of assets is generating £2.5mln of revenue. Presumably the issues moving from downloads to streaming is the reason why the increase in assets has not led to an increase in revenue; so far. So, although this doesn't help much yet, there's no obvious relationship between intangible asset value and revenue. However it looks as if OMIP already have approx. double the value of rights that they had in 2013 when revenue was £2.6mln (intangible assets at £1.8mln). Forecast this year was for £2.8mln revenue. Given the very high gearing of profits to increases in revenue, perhaps the dilution of shares will not end up being a dilution in earnings at all. Second half is going to be very critical in assessing whether having all this cash to buy rights is a gamble, or whether its based on solid foundations. Maybe with streaming, it needs double the rights value to create the same revenue as back in 2010-2-3. But if the existing rights are starting to generate accelerating revenue, then timing could be spot on. I guess they could have tried to raise money to buy rights back in 2015-7, but that would probably not have gone down well, although the rights might have been cheaper to buy, as there were obviously doubts in the industry about how things would pan out. I was thinking all this to myself, but thought might as well post it.

[pireric] 01/9/2018 11:53

To be fair, I was looking when this was at 12.3p ask price, Michael, so my interpretation of the market price at the time was that it included quite a bit of value for TCAT

[microscope] 01/9/2018 11:44

Re my previous post and reading through everything again, I do think the loan notes may have been fully subscribed as well, was just a bit confused by the total amount raised, and the wording. But please don't take that as gospel, and dyor, I'm not absolutely certain either way even now.

[michaelmouse] 01/9/2018 11:34

Not sure why that would be a reason for not buying pireric? I look at TCAT as a possible bonus in future, but only that. Their main business is exploiting primarily music intellectual property rights and it's how well they can do that which should be the investment consideration? Certainly, recent results confirm that they can make a profit and decent cashflow from existing rights. Will they make shrewd purchases and exploit them fully in the future? Let's hope so.

[pireric] 01/9/2018 10:26

I'm a bit more muted around the TCAT opportunity, which is what has put me off buying here before. if they can snap up some of the largest players in the industry and yet not generate that much revenue from it (and I appreciate it hasn't fully ramped yet), then how big is the addressable market?

[michaelmouse] 01/9/2018 10:05

hTTp://michae1mouse.blogspot.com/2018/09/exciting-prospects-but-with-added-risk.html

[apfindley] 31/8/2018 21:13

Yump It's not so simple as that. The value of rights and the revenues varies considerably. Ompp/omip have a huge catalogue, but many won't be played too often, and the ones played frequently are of such an age that their value is much less than for example current chart hits. I'm hoping with the ammount of cash raised, omip will finally tap into purchasing higher value, higher revenue material. Also I'd like to have an update on TCAT and see some of the funds go towards pushing that into mainstream usage, or to stake its place as an industry standard.

[yump] 31/8/2018 19:57

Well I can do all the market research for myself and all the details of who has subscribed to what don't interest me in the least. For all I know its just a plaything to these 'big hitters'. What would be nice to know is the potential return on each £1mln spent on rights and in what timescale. Perhaps there's a neat formula that they've applied ? Presumably I could find that out by seeing what the value of their existing rights is and dividing that into the current revenue. At the moment, its just a 'trust us' gamble which you would think, given all the contacts and brains behind it now, would be going to make some serious revenue. But perhaps someone can quote me a very successful company that has grown from a small base, when it had a load of big names involved at the start... The most successful ones I can think of started with either students, housewives, or garden shed inventors.

[microscope] 31/8/2018 18:10

The placing shares gone down a bomb. Have the loan notes though been fully taken up? Slightly muddled by RNS, not for first time today on AIM bizarrely, reads like 'done deal' in first paragraph but thereafter maybe under-subscribed?I have a strong feeling I have misunderstood/misread something obvious. Gut tells me it's all the loan notes nicely subscribed, just like someone sharper than me to clarify. 6p is i guess the elephant in the room, but long term should prove nice deal all round I think.

[apfindley] 31/8/2018 17:26

Wow. That is some result from the bookbuild. Awesome interest. People clearly happy to snap them up at a knockdown price.There has always been buying interest here, but investors have for many years been unable to enter at sensible prices due to the lack of liquidity and lack of available shares for sale. The price has always jumped on a trade by trade basis, sometimes being difficult to even get a quote, and it was worse on plusmarkets which is when I first invested at sub 3p and had big trouble buying without moving the price.Well done all those who participated. .

[clocktower] 31/8/2018 08:53

Good Luck with it Nextlink - Yes Zinc is a good example but fortunately the tables are about to turn imo. Should soon see a sharp return to former highs and new glory with USA deals. :-)

[harrogate] 31/8/2018 08:43

I think good too and have an order in on the bookbuild - let's see how much we actually get before we give them too many brownie points for looking after existing small shareholders

[apfindley] 31/8/2018 08:41

Good or bad? Good I would say. Michael has a lot more invested than any of you. He previously had around 50% too. I've spoken and made contact with him many times in the past. Nobody has been shafted. You can take part in the bookbuild yourself if you wish so the option is available for all investors.

[nextlink] 31/8/2018 08:26

Clocktower - invested in this one on Ofex at a little over 1 pence. Having bought and sold at various prices am currently out of pocket, ignoring booked profits. Doubt it will go to 4 pence, on further fundraising. However never say never, in recalling how low Zinc has gone.

[harrogate] 31/8/2018 08:25

The reason trading is light is that no one knows what it all means - is it good is it bad, have we been shafted, is this the start of something big or the start of something mad? 14stuart - my recent experience is that pre-emption rights are now meaningless - even when the company has asked to disapply them over a certain % if something comes along that they need to ignore that then they can through a mechanism they use without going back to the shareholders Personally while this is painful today I have been a long term holder and I feel that we are going to enjoy things going forward

[clocktower] 31/8/2018 08:11

Patience is not the only thing you will need, it will be getting used to regular dilution if they look at larger acquisitions. Ok for Michael Grade that invested at 2.5p but for those that bought in since Jan 2018 are in a different position. Nextlink, you ask for a target - 4p

[apfindley] 31/8/2018 08:10

Why buy at the market price when you can take part in the 6p bookbuild. Thats why trading is low.

[dibs61] 31/8/2018 07:45

First the not so good news. Placing price IS disappointing but, in this market, not altogether surprising. Thus the market will probably view it as a typical AIM placing.ie.bucketshop blah blah. Now the good news as I see it. BGF are now a major investor in the company. BGF are most certainly NOT a bucketshop. This is a major strategic LONG TERM investor. Patient but looking for significant returns over say 5 years. Also there is a 'cornerstone investor' mentioned in the placing details, as well as a further combined investment of £75k by both Ivan Dunleavy and Michael Grade. So, we are predictably taking a hit from the market on the placing price - short term. BUT make no mistake this IS a significant change by this company. No more small time acquisitions. The company is now seriously looking at much larger acquisitions than has been the case historically. The scale up is underway. Just require patience.

[harrogate] 31/8/2018 07:43

Nicola Horlick was that fund manager who was dubbed superwoman as she managed the fund had 11 children, ran a marathon each day and wrote childrens books in her spare time - Not all true but you get my drift

[microscope] 31/8/2018 07:41

Can't put my finger on it but the name Nicola Horlick rings a bell with me. Incidentally, pedant alert... Isn't 6p 140% above 2.5p, not the 240% in the RNS.That said this looks very interesting though 6p is as Harrogate says, lower than ideal. Off to read the RNS again.

[nextlink] 31/8/2018 07:40

Must have a target in sight.

[apfindley] 31/8/2018 07:29

All good. Seems a lot to raise, but will be worth it. Ceo been deeply invested for a long time so that's a good sign. Time for me to load up on the pullback this raising has caused. Solid. Buy without ramping and you'll be rewarded.