One Media Ip Share Discussion Threads

[microscope] 10/7/2019 10:12

The underlying financials look very strong to me, though it's too early to make a judgement on how well the acquisitions will do and what they can add to ebitda, eps etc.

Net assets of over 7.5 million, including over 5 million in cash, at 6p the entire market cap is around 8 million, so the company ain't going bust anytime soon that seems certain I'd say!!

Streaming is undoubtedly the most lucrative area of the global market and it's where one media are placed, so am pretty confident about the future.

[paleje] 10/7/2019 09:44

Interims in line and -

".....The global recorded music market shows no
signs of slowing, reporting growth of 9.7% in 2018, with streaming being the
driving force behind this, growing 34% in the same period.

We now look to the remainder of 2019 with a solid pipeline of opportunities
for further acquisitions and confidence in our ability to capitalise and
strengthen our positioning within this growing market....."

They mentioned accelerated growth earlier in the year, I hope it's on its way.

[yump] 01/7/2019 14:59

Well I'm definitely here to wait for the gearing to kick in, which I hope happens, as although the growth rates forecast are higher than the p/e, the actual earnings increases forecast don't look like they will send the price jumping much for a while. However 5 years of it will do nicely.

Never actually noticed the dividend ! but not really keen on them paying it anyway now after raising a chunk of funds - would seem a bit pointless.

[glasshalfull] 28/4/2019 08:28

Good morning guys,

I’m currently compiling a write-up on the constituents in my portfolio. I’ve enclosed a link to my post on Twitter as unable to copy over the table.



I’d also like to draw your attention to the presentation that OMIP have put up on their web site. I enjoyed a call with the Chairman & CEO recently. Both were comfortable with the pipeline of acquisitions. They reiterated that each catalogue & potential acquisition different & that it’s up to OMIP to exploit each by sweating the assets.



(2) OMIP (One Media iP) - War Chest for acquisitions

* Share Price 5.5p
* M/Cap £7.5m
* Enterprise Value £3.5m (£4m NET CASH on the balance sheet)
* Shares in Issue 135.6m
* Stock Rank (Contrarian) 51 (Quality 83 / Value 71 / Momentum 2)

Michael Infante, CEO had the foresight in the early 2000's to recognise that digital media was the new growth area as CD sales plateaued. He positioned the company to take advantage to these shifting trends in consumer behaviour during the next decade. They grew earnings considerably between 2009 - 2014 via digital downloads after amassing a catalogue of over 250,000 music tracks.

I was fortunate to enjoy the ride & the share price rose from 1.5p to 20p in this timeframe, a 13x bagger, BUT the market changed once more & the download market fell off a cliff with the the new streaming model unable to pick up the slack until 2017-18 when an inflexion point was reached. The share price consequently retraced to the current 5.5p level. During this rollercoaster ride OMIP have remained profitable & retained a net cash position throughout. In FY18 Michael Infante implemented the next planned phase of growth through the heavyweight appointments of Lord Michael Grade & Ivan Dunleavy (former CEO of Pinewood Studios) & through a mixture of loan notes & equity raised £8.9m gross proceeds at 6p in Sept 18 to embark on the acquisition of music publishing rights, artist recordings and songwriters’ rights.

FY18 results were released earlier this month & confirmed that OMIP increased op profit +94% to £639k & finished the period with £4m net cash...so they are only on an EV of £3.5m with a WAR CHEST for acquisitions. IMHO the market are attributing negligible value to their content library iP which they’ve spent £6.2m to date. They also have the £4m net cash plus a few other growth opportunities. So we have: -

* Music Catalogue of +250,000 tracks including “Points Classic” catalogue (acquired for $1.6m in 2014) of 5,000 classical recordings which allows synchronisation deals with film, tv & advert productions

* Video catalogue of 10,000 hours content & 20 YouTube channels to monetise

* Content Policing Software - Technical Copyright Analysis Tool (“TCAT") - which has now been taken up by 2 x of the major record labels to utilise the product as SaaS. This is a tool for "content policing", protecting ownership rights across the multiple digital platforms & I envisage they’ll look to expand this into other markets

* Men & Motors - OMIP own this property which provided 43 million minutes of viewing in 2018 & has over 114k subscribers

Brokers Panmure have reinstated coverage with a 10p price target or +82% upside on the current share price. Panmure rebased their previous EPS targets on the back of the Sept 2018 placing as OMIP are only now starting to deploy proceeds, spending a total of $1.6m combined so far on a Spanish record label which is strong in Latin American territories & an American country music songwriters composition catalogue.

The forecasts below therefore have plenty opportunity for upgrades as they deploy the monies raised, while they also have a further £4.1m of unused BGF facilities to deploy.

Yr end Oct Revenue Adj PBT Dil EPS

2017 £2.34m £298k 0.35p
2018 £2.7m £487k (+63%) 0.4p (+14%)
2019e £3.2m £600k (+23%) 0.3p (Analyst current low ball EPS forecast as company still to deploy most of placing monies & sitting on £4m net cash)
2020e £3.7m £900k (+50%) 0.4p (+33%)
2021e £4.1m £1.1m (+22%) 0.5p (+25%)

OMIP are now benefitting from the growth in music streaming across the globe & I believe that once they have deployed the £7.6m cash at their disposal we will observe operational gearing kicking in. Simply put, the business model provides good visibility on revenues as they collect a small % every time one of their songs is streamed & further acquisitions should provide the opportunity for material upgrades in the PBT & EPS forecasts once the cash is deployed. Therefore the risk/ reward proposition is skewed to the upside in my opinion.

The share price soared once before ... & I reckon there are a number of drivers to give it a good kick forward 👟⚽A039; once again!

Kind regards,
GHF

[haroldthegreat] 23/4/2019 20:59

it's one thing not knowing what day it is but not knowing the year ………;.

[capt bligh] 10/4/2019 10:35

Er Yump they have a history of paying dividends actually

[yump] 09/4/2019 16:50

Well I don't think they're going to detail any meetings between the great and good and their contacts. I know its tricky to get reliable dividends from the large corporates at the moment as the good payers keep getting into trouble and cutting theirs, but its way premature to think about dividends here - I think most would put this into the small growth stock category - capital growth is where the potential is.

[capt bligh] 09/4/2019 15:57

Its been a long wait... we know Infante is a very careful buyer.... I am very pleased this seems to be turning round really well... dont think we have yet seen any benefit from Michael Grade's involvement. Dividend?

[microscope] 09/4/2019 15:53

A strong set of results imho and following the book build, the acquisitions are now coming on stream which is how the company will grow significantly from here (do keep up Monty!). Infact the word grow appears frequently in the report including twice referenced in the same sentence in the outlook. ('The Company is well placed to benefit from growth in the music industry and
growing its own catalogue of music rights. We have a strong pipeline of
opportunities and the Board looks to the future with confidence.')

Still a healthy cash position and debt free, profitable and on the up.

Even though the shareprice has suggested a seller in the wings for a while, I can't see what's not to like in this report.

[nextlink] 09/4/2019 12:55

Looks like a few are taking the opportunity to sell
at a better price than yesterday.
Good news today but feel any upward momentum will take time.

[clocktower] 09/4/2019 09:33

Critical mass will now make its mark, onward and upward hopefully.

[yump] 09/4/2019 09:26

Well I was extremely miffed at the dilution, however with the greatest respect (cough), with the heavy gearing of profit to revenue and the fund-raising done, this is precisely the time to think it CAN grow and that its not limited to its previous legacy of pottering along.

[montyhedge] 09/4/2019 08:46

Good results, but can't see how the company can grow, it's just a nice little company.

[nextlink] 09/4/2019 08:17

Michael Infante being interviewed on BBC News at 8.30am
this morning.

[harrogate] 25/2/2019 19:47

Indeed. So used to nothing happening that missed the deal. Good to see them kicking in and I agree that this global angle might well provide a better return and maybe less competition. This is another one where patience is required until a few deals in place and some broker update that shows what they might produce. Thanks for pointing it out GHF

[harrogate] 22/2/2019 10:43

Hard to see why it will move until we see a deal and get a feel for how that money is going to be spent and how the economics actually work on that. But it does seem a little low and I will keep buying if it slips lower again - could buy sub 5p before Xmas

[paleje] 22/2/2019 10:37

Good research on here too Chesh. It was understandably the Autumn placing (whopping discount) that peed people off then the October sell off came and it hasn't really recovered, unloved and under the radar.

[cheshire man] 22/2/2019 08:37

Thanks for the link,,,,,,,reads very positive to me :-)

[paleje] 22/2/2019 08:11

Tipped yesterday as a buy ahead of results next month

[glasshalfull] 24/1/2019 12:59

Yump -

No, I’ve not modelled any specific calcs following the raise but your figures look correct on a cursory glance. I agree with you in that the company will hopefully pick up publishing catalogues at x8-10 multiple.

I’m hopeful that the time taken to conclude any deals is reflective of the fact that OMIP won’t overpay.

The other thing to consider is that publishing catalogues are forecast to rise in the coming years...so if they purchase sensibly OMIP could be left with an appreciating asset if multiples were indeed to rise. The opposite is equally true, so important they obtain royalties at the right price.

Kind regards,
GHF

[yump] 24/1/2019 12:42

GHF

Have you done any calcs. on likely return per £1mln spend on royalties ? I had a go at some sort of arbitrage calc. but not sure of my logic.

Was basically taking an assumed multiple for the purchase, then deducting the annual interest on the spend to get some sort of return. Of course with the shares, there's no interest, but an increase in number issued.

So with some easy figures:
Say £1mln buys £100,000 annual royalties ie. multiple of 10.
Interest on £1mln loan at 7% is £70,000.
So return is £30,000 per £1mln spend.
That's 0.02p per share based on 135mln shares in issue.

I'm assuming OMIP have gone for a higher proportion of loan than equity because if they have good cash flows and rapidly increasing profits, servicing the debt is (probably) cheaper than diluting shareholdings, especially as raising £1mln probably costs way more than £70,000, although a one-off.

So if existing earnings are 1p and they spend £5mln on royalties, earnings will increase annually by 0.1p ie. 10%.

That changes drastically if they buy royalties on a lower multiple and/or increase the return on the royalties by streaming.

So if they bought on a multiple of 8, they'd get £125,000 of royalties and say increased that by 20% with streaming, that would be £150,000, leaving £80,000 after the interest is taken off.

Which would be about 2.5x the earnings ie. 25% earnings increase !

Is that all right... help !

[yump] 24/1/2019 10:19

Well I doubt the advance would have been given if there wasn't anticipation of increased demand by the distributor.

[harrogate] 24/1/2019 08:48

Thanks GHF - " and we hope you double your money" - so do I !!

[glasshalfull] 24/1/2019 08:46

One Media IP Group (LSE: OMIP)

5p (4.8p -5.4p)

Mkt Cap: £7m

Next Results: Finals March

One Media P Group plc has around £8m available to pursue an acquisition strategy. The plan is to acquire publishing rights which can generate a robust earnings stream, from the expanding digital music and video streaming market. In December 2017 two heavyweight company directors; Lord Michael Grade and Ivan Dunleavy joined the board and in August 2018 raised £8m, comprising £2m in shares at 6p and a £6m loan facility from the BGF (British Growth Fund).

Ivan Dunleavy is 58 and has been operating in the media industry for more than 35 years, including 17 years as CEO of Pinewood, Europe’s largest provider of stage and studio space, which he and Lord Grade acquired from Rank in 2000 for £62m. Lord Grade of Yarmouth, aged 75, has a distinguished career as a television executive, businessman and Director of Charlton Athletic FC.

OMIP distribute high margin streaming music through over 600 digital stores, as well as through dominant content distributors such as Spotify, Amazon, Deezer and Apple. These big sites prefer to deal with fewer and more diligent suppliers such as OMIP, which is driving consolidation. OMIP have also developed a high quality and robust IT platform and process for content discovery and a new policing software service ‘Technical Copyright Analysis Tool’ (TCAT) for record companies, publishers and law firms searching information of artist and tracks on legitimate digital stores. This can be used to maximise the return from acquired rights

The interims to April reported a 43% increase in PBT to £213k on a mere 5.1% increase in turnover to £1.02m as streaming is higher margin. The directors have confirmed that momentum will have been maintained in the Finals to 31 October 2018, which are due to be reported in March. They recently announced the receipt of a signed contract to recoupable advance against future digital earnings in the amount of US$1m. In the meantime, the team are seeking an earnings-enhancing acquisition. Buy at below the placing price and we hope you double your money!

By Andrew Hore & Jon Levinson