WDC Widecells Group Plc

TIDMICON

RNS Number : 1375I

Iconic Labs PLC

10 December 2020

Iconic Labs Plc ("Iconic Labs" or the "Company")

Operational Update

Iconic Labs Plc (LSE:ICON), a multidivisional new media and technology business, today provides the following operational update covering activity during the second half of 2020.

The second half of this year saw material positive progress in the business activity of the Company. In particular, monthly contracted revenues now exceed GBP135,000 per month (more than GBP1.5 million on an annualised basis, up from GBP0.1m for the entirety of 2020). In parallel, legacy revenues have now largely been dealt with and running costs for the Company are running at a level similar to or less than revenues received.

The key transformative event was the acquisition by Greencastle Acquisition Limited ("Greencastle Capital") of the JOE and HER media group and the subsequent entering into of a management service contract ("MSC") with the Company. The management fee payable for the provision of all management services to Greencastle Capital under a single combined MSC with the Company is now GBP125,000 a month, which over the course of a 12 month contract alone exceeds the amount of income that Iconic had generated in the financial year ended 30 June 2020.

The management team have worked very hard with the JOE team to run the business more efficiently, and JOE UK is now operationally profitable less than 4 months after the commencement of the provision of the management services under the MSC. This is particularly important, as in addition to the GBP125,000 a month fee payable to the Company under the MSC, the Company is also entitled to a 25% profit share of JOE Media. Since the management team have been providing their services under the MSC a number of high value contracts have been won on a regular basis, including most recently a series of recent advertising and branded content partnerships with revenues totalling more than GBP750,000. JOE Media is a business that has historically achieved more than GBP10 million in annual revenue and has seen previous revenue growth rates of over 100% a year. We are confident that with the experience and expertise that the management team provides under the MSC, JOE Media can increase its profits which in turn can become a significant source of revenue to the Company in the future.

The directors believe there remains a number of further acquisition and partnership opportunities in the digital media and advertising sector and through which it can establish partnerships with brands and businesses. It is the Company's belief that there are many potential partners that can benefit from the experience and contacts of the Iconic Labs management team, specifically dramatically scaling monetisation efforts across previously under-monetised websites and digital brands via both programmatic advertising and branded content contracts. The performance of JOE Media provides clear verification of the ability of the management team of the Company to do so.

In addition to the success of the contract wins achieved by JOE Media, as a result of the management services provided by the management team, there has also been a focus on operational efficiencies, and in doing so under the MSC, the management team have made JOE Media a more structured and streamlined platform and business. This is not only about reducing unnecessary costs but also structuring the business so it is optimised operationally and can benefit from both economies of scale and accessing greater levels of revenues. Size and scale are often limiting factors in a digital media company's revenue prospects and that is why JOE Media was such a transformational partnership, as this allowed the business to achieve enough of both so as to achieve a different level of revenue growth. The result is that the JOE Media business is now well positioned to achieve further synergies by working with other owned and operated platforms.

The recently announced entering into of a further MSC in respect of the Lovin Media business following its acquisition by Greencastle Capital is an example of this model already being put into action. The JOE Media and Lovin Media businesses are now being run as one and together form the largest independent digital media company in Ireland. This will help create both revenue and cost synergies which the Company believes should increase revenues and profitability across all entities. As a result of this the fee that Iconic Labs receive on a monthly basis has been to GBP125,000 (GBP1.5m annually), together with the potential of receiving 25% of the profits. As previously mentioned, the MSC for both businesses is now being undertaken under a single combined MSC with Greencastle Capital.

In addition, the other owned and operated business, GSN and The London Economic (TLE), are also benefiting from the centralized systems and resources we have created. TLE provides regular revenue to Iconic Labs under a separate MSC. Importantly, TLE is now profitable. There are also exciting opportunities for the JOE Media commercial team to upsell TLE distribution and content onto JOE Media contracts. This should provide an opportunity to substantially increase revenues from branded content campaigns. Similarly GSN will not only benefit in all areas commercially but will also be able to share resources such as production of content. This should not only contribute to revenues but also greatly enhance the capital value of the GSN brand.

Finally, one of the most important aims that the board of directors had for this year was to build the underlying business to a level where it could attract conventional capital funding, and in so doing move away from the convertible loan note facility funding model that had been inherited from the old WideCells business, and as previously announced, the Company has been successful in doing so. With the previous financing facility having been terminated, and a recent equity raise being successfully completed, the Company is well placed to grow the share price alongside the growth of the Company. There are ongoing discussions with the previous provider of the convertible loan note facility as to the settlement of the outstanding amounts due which are to be resolved. Negotiations on this are not straight forward, but the Company is determined to negotiate with the best interests of its members and other stakeholders in mind and ensure that any final settlement is one which can be fully justified to them.

John Quinlan, CEO of Iconic Labs, said: "We are delighted that the hard work of the team, and the patience of the shareholders is beginning to be rewarded by substantial positive progress in the Iconic Labs business. Increasing revenues to more than GBP1.5m on annualised basis shows that the model and playbook we have been working to is beginning to show the benefits of a substantial amount of work over the previous 18 months."

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

**ENDS**

For further information, please visit the Company's website www.iconiclabs.co.uk or contact:

 
  Damon Heath    Shard Capital Partners    Tel: +44 (0) 20 7186 
                  LLP                       9950 
 

Iconic Labs ir@iconiclabs.co.uk

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This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

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December 10, 2020 02:00 ET (07:00 GMT)

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