Thursday 6 September 2018

"If music be the food of love, play on"

I've suddenly realised I've developed an unhealthy appetite for investing in 'music related' companies in my portfolio. I've mentioned 7digital many times in the past, here's Simon Cole with a neater and shorter summary than I could give about the investment case for this company:-

https://www.voxmarkets.co.uk/company/7DIG/?mediaAssetId=5b8e4ba6a768f800118d1463&jwsource=cl

I've also mentioned a company called One Media IP (OMIP), and here's another quick and neat summary by Michael Infante about his company:-

http://onemediaip.com/news/industry-update-summer-2018/

It goes without saying that you need to do far more research than listening to or reading a quick overview of these companies before investing, but they are in essence simple business models to understand which I'm a great believer in. If it's a good enough rule for Warren Buffett then it's good enough for me. ;-)

Here's one I haven't mentioned before. The company in question is Immedia (IME).

I've struggled a bit with an investment here. It's a micro-cap and has possibly the most illiquid company shares I've ever dealt in. It's market cap. is around £4m and it has next to zero debt. I'm expecting the Interim results around the end of September. In keeping with the rest of this blog, here's a brief summary of the company by CEO Bruno Brookes (yes that Bruno Brookes ex-R1 DJ - yikes!! ;) :-

https://www.insider-trends.com/music-as-a-media-opportunity-immedia-on-why-brands-can-use-audio-to-reach-their-audiences/

When I say that I've struggled a bit with an investment here, I mean I've kept falling in and out of love with the company. More by luck than judgement I've had a successful run trading the shares whilst keeping a decent holding to run for the long term (I wasn't intending to trade but just kept changing my mind about company prospects). I've made 112%, 32% and 16% respectively. Indecision has proven to be lucrative in this instance.

Results for the full year 2017 were frankly horrible, but 2018 looks far brighter for a £4m minnow. Here's the outlook statement:-

https://uk.advfn.com/stock-market/london/immedia-broadcasting-IME/share-news/Immedia-Group-PLC-Final-Results-for-the-year-ended/77179409

"2018 has started very positively for the Group. The recent announcement of a substantial installation rollout in branches of a major UK financial institution is just one of numerous new business opportunities currently in play.
Our collective knowledge and skills-set have underpinned our ability to integrate, consolidate and strengthen the Group's product and service offering which, by the 2017 year-end, has also afforded us greater marketing and client opportunities in our key target sectors.
The confidence referred to at the start of this statement is palpable within the business and reflected in the amount and quality of work accomplished by all the team in both Aberdeen and Newbury. I would like to thank each and every one of them." 
I do recommend that you read the whole report.

I'm currently feeling very optimistic about 2018 for Immedia, and added to my core holding at prices around 22p. Being a long term investor at heart, I shall now hopefully hold on until this becomes a multi-bagger (fingers crossed anyway!)

A few extra points of interest include:-

1) In 2016 they acquired a company called AVC Media which took a while to bed in, but may now be starting to bear fruit

2) They own 6,000,000 shares in AudioBoom (BOOM).

and also from the 2017 report they say:-

3)
     a) Costs have been optimised to the size of the business, with c.GBP250k of annual cost removed


     b) The Group remains virtually debt free and is now cash generative

     c) Having launched in late 2017 our new engagement platform DreamStream X, interest levels in            Immedia's products and services are exceptionally high and point to a much-improved financial         performance in 2018 compared to the disappointing results in 2017 
As ever please do thorough research, and this is just a personal blog which reports my own thoughts and ideas. Good luck.









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