Company Interview / Vinyl Group spinning into media

Key Insights:

Recent acquisition of Media Week and past acquisitions such as Bragg MediaSignificant revenue growth and plans to boost cash flowsLong-term vision to build a thriving music creator ecosystem

Josh Simons from Vinyl Group (ASX:VNL) highlights their recent acquisition of Media Week, noting a remarkable 754% revenue growth in FY24. He mentions the acquisition as a part of Vinyl Group's broader strategy, which includes the successful acquisition of Bragg Media earlier this year.

Josh points out the significant achievements, including increased cash receipts by 120% each quarter and growth across all business lines. He emphasises the integration of Media Week to enhance trade media strategy and foresees an enriched ecosystem connecting fans, brands, and creators.

Regarding their latest acquisition funding, Josh hints at future announcements, ensuring the company maintains sufficient working capital. Looking ahead, Josh envisions Vinyl Group fostering a thriving music community and aims for fairer share value. He remains optimistic about the company's trajectory and strategic growth.

Full unedited transcript:

0:00

We are also looking very closely in terms of one of the key stocks that has been in Focus Vinyl Group, completing the acquisition of media and marketing. Trade publication Media Week. Its also reported revenue growth of 754% in full year 24. To get us across the details on the acquisition, vinyl Group CEO Josh Simons joins me now. Josh, tell us about this and what you've achieved here.

0:24

Yeah. Look, Media Week represents another acquisition for us as we sort of, I suppose, uh, extend on the original, um, uh, move we made into media with the Bragg Media acquisition back in January. Um, we completed a new fully underwritten Sanrio a couple of months ago, and at the time, we sort of indicated to the market that we would do some small acquisitions. This is probably more or less hit on the media side, but we're yeah, it's part of a broader acquisition strategy that I think folks have seen, you know, us roll out over the last, uh, yeah, my first sort of 12 months as CEO and then like 8.5 x revenue in the first year. I'm pretty I'm pretty stoked with that. Yes. Well, from 20 million to nearly 100 million since becoming CEO. You must have earned your keep. Josh. Tell us, though, how this new media arm fits in with the company more broadly. So when we acquired the Brad Bragg Media, we had a couple of different trade publications, including Variety Australia and The Music

1:24

Network, but we didn't really have a great trade strategy, just being frank. Um, and so with the Media Week team and opportunity, what we saw was a way to get some, you know, brilliant salespeople and some brilliant journalists in and really consolidate what we're doing on the trade media side of things so that we could, you know, differentiate the sort of B2B and B2C

1:44

media strategy. Excuse me. So when I first heard of your company, it was an analyst that called you the tinder of the music industry. What do you say to that, particularly as you're expanding out now? But one of our software's, um, called Vampyr. It's sort of the on the more tech side of the business. Um, to be fair, does have a Tinder like interface. I will take that comment and, uh, um, probably agree with it to some extent. Um, but vampire is a platform that people use to to meet each other in the, in the music community. Think LinkedIn for the music ecosystem is is usually how I describe it, but I'll take the Tinder one too. It's catchy, isn't it? All right, well, let's just talk about what you've achieved in the past 12 months. I mean, we mentioned revenue growth 754%. So things are going well.

2:29

Yeah, things are going great. In fact, every single part of the business has grown. And not just the media, um, acquisition. We've actually seen growth across every business line. Um, Congress business grew $1.2 million. Um, so I think things are moving in the right direction. I think, you know, if I was looking at our, um, at our preliminaries and you sort of saw the cost, I'd sort of maybe be a bit scared. But I'd remind folks that most of the expenses there are sort of non-cash items. And when I get up every day, I'm really just thinking about the cash flows. And, you know, to that extent, since I came on as CEO, we've I think on average increased cash receipts by 120% every single quarter. Um, so that's that's sort of my focus. And, and hopefully we can wipe out some of these non-cash items off the balance sheet for the next financial year. So we know that you're looking for a new managing editor to lead Mediaworks editorial more broadly, what is your staffing plans looking like?

3:26

Um, can't go into to anything that we haven't put out there. Um, to broadly, um, suffice to say, you know, from an operational standpoint, we probably won't look to grow the team too much. Um, obviously like roles like sales and stuff, where they're part of the cost of goods. Um, there's a bit more flexibility to increase the size of those teams, but below the line, we're probably quite happy with where we're at at the moment. So I guess just getting back to some of the financials and a big chunk of revenue, as you mentioned. But where are you sort of sitting in terms of your cash balance now, particularly in the wake of this latest acquisition? Yeah. Um, obviously we've had to dig into our cash reserves to fund this acquisition. Um, the company will have more to say on how we're going to fund our acquisition strategy more generally in a couple of weeks. So unfortunately, I won't be able to give you that information today. But, um, obviously there's a plan in place to, to fund acquisitions. And, um, as we said at the time of the NATO, our job there was really to make sure there

4:26

was working capital to fund our existing business lines. Um, so it's got to come from somewhere. But like I said, we'll have more to say on that in a, in a week or so. All right. Well, just talking I guess more broadly about your visions because you mentioned Vampyr. We're talking about the the whole vinyl group ecosystem as well. And Media Week, what is your vision, Josh, one year in for where vinyl Group might be in say five years. Look, everything we do is about connecting fans, brands and creators. Um, that's the flywheel. And if we can add value and, and extract value from that broader sort of music creator ecosystem. Brilliant. What we're really trying to do, and I think people might start to see this now with all these little acquisitions, is we'd like to not just contribute to the sort of global ecosystem in the, in the music creative space, but actually create our own flywheel that's sort of its own little ecosystem, and that's what we're doing. I think that's what people are starting to see. Um, a rising tide lifts all boats, and that's why every part of the business is growing at the moment. That was very much the

5:25

plan. Um, so I think you'll see. Yeah, an extremely vibrant community where folks can come in as sort of early stage musicians and, and find value from each part of the business as they go through their career. And I know that you can't control the market, but I imagine that there must be a lot of pressure or hope that shares will get back to to the levels that they used to be at. What's your hope or expectations that maybe you will see a bit more fair value?

5:54

Look, um, it was a pretty steep job. When I think I took over as CEO, the share price might have been around 2 or $0.03. Um, and there are some shareholders in there who I think got in somewhere between 20 and $0.40. So I always had a big task ahead of me. Um, but I knew that when I took on the job. Um, I love it. I think it's incredibly fun to, you know, see the market judge you based on your performance every day. And, um, I try not to look at it too much because there's a business to run, but, um. Yeah, I'm as committed as ever to getting it back up to some of those loftier highs.