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One Media IP

  • BY: Andrew Hore |
  • POSTED: 18/04/2013 |

One Media IP Group has switched from ISDX to Aim.

A placing at 8p a share raised £700,000, or £530,000 after expenses – a market capitalisation of £5.12m. This is a premium to the ISDX price. Four directors and two other members of the management team have warrants exercisable at 1.5p a share.

The share price ended the first day of trading at 8.25p. That values One Media at £5.28m.

Pinewood Studios-based One Media buys music and video rights and sells them via online retailers. Revenues are also generated from licensing them for use in film and TV or for inclusion on CDs produced by other firms. Some video content is available via YouTube and generates advertising revenues.

Management has decades of experience in the sector and knows how much a catalogue is worth so it does not overpay for them.

The company’s catalogue, which has been built up over seven years, includes more than 170,000 music tracks and 5,000 hours of video. The most recent significant acquisition was Men & Motors and its library of programming. One Media has also recently acquired a catalogue of Mungo Jerry tracks.

Unlike in the old days of the music industry One Media does not have a large stock of CDs in a warehouse. This makes the business much more attractive than it was in the past when the equivalent businesses used to run into trouble on a regular basis.

The model is cash generative and there is no need for working capital for large inventories. The cash has been boosted by advance payments from digital distributor The Orchard. A deal has been struck with Orchard, which is paying $2.5m in advances in stages up until the end of June.

One Media is already paying dividends, which indicates the cash generative abilities of the business.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFApril2013_43.pdf

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