Management Services Agreement

RNS Number : 1465M

Iconic Labs PLC

12 September 2019

 

12 September 2019

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

Management services agreement with Medium Channel Media Limited

Iconic Labs Plc (LSE:ICON), a multi-divisional new media and technology business is pleased to announce that it has taken a 24% shareholding in Medium Channel Media Limited ("MCM") a media focussed investment company, in return for the provision of management and consultancy services ("Management Services Agreement" or "MSA") and the provision of a loan for £150,000 to be used solely for working capital purposes ("the Loan").  Contemporaneously, MCM has entered into a conditional agreement to acquire Tab Media Ltd ("the Acquisition"), publishers of The Tab (www.thetab.com), the UK's leading youth and student culture focussed publisher.

The Tab is currently divided into two revenue centres: programmatic revenue; and branded content, which develops specific targeted campaigns.  Under the terms of the Management Services Agreement, the senior management team of Iconic Labs will utilise their specialist experience to assist The Tab both to increase programmatic revenue by selling advertising space on The Tab's media platforms more efficiently, and increase revenue from creative services by improving The Tab's commercial presence and developing relationships with target brands. 

The Management Services Agreement provides for fees to be payable by MCM to the Company on a monthly basis and provide a minimum retainer revenue of no less than £25,000 a month.  The Company believes that its team's experience in building UNILAD will be critical in ensuring the success of this strategy, which will enable The Tab to continue growing its market reach and position while at the same time improving its financial performance.  The Company has also agreed with MCM that Iconic Labs will receive a substantial percentage of all profits if certain revenue and profit targets are met.  The Tab achieved revenues of £1.28 million in the FY 2018, and the Company is confident that, with the addition of the Iconic Labs team, a significant increase in revenue and profitability is possible in the short term.  The Iconic Labs board believe that the potential total revenue and cash payments to Iconic Labs will exceed £150,000.

MCM has been established by Starnavesse, a company controlled by Richard Thompson, one of the non-executive directors of Iconic Labs.  MCM was created by Richard Thompson for the purpose of investing in media and technology companies.  Richard has extensive experience in investing in public and private companies and was the founder investor in Fonix Mobile, which grew to achieve revenues of c.£55 million in 2018. 

He has declared his interest to the Company and has not participated in the Board's decisions to make this investment, provide the services of certain senior management under the MSA or provide of the Loan.  The MSA shall continue until such time as either party serves notice on the other to terminate the arrangement.  The Loan is repayable on demand by Iconic Labs and attracts interest at the rate of 5% per annum.

The Company will provide a further update on its investment in MCM once the acquisition of The Tab by MCM has completed.

Chief Executive Officer, John Quinlan, said: "We are constantly looking to build our platform and revenue streams to become a leading participant in the new media space.  We continue to make progress at Iconic Labs and through our commercial contract and investment of 24% in Medium Channel Media we are expanding our networks and business lines.  Importantly we also get to work closely with The Tab through the Management Services Agreement to build on its position as the number one market leader in the UK student market and through our investment have exposure to any future equity upside.

"Given our experience in creating UNILAD, which started as a student publisher before we developed it into the world's largest social publisher with revenues of c.£ 10m, we feel confident in our ability in adding value and increasing revenues at The Tab through our involvement once MCM has completed the Acquisition.  We have always thought they had the most credible brand in the sector and we are looking forward to working on it through our agreement with MCM.

"We are delighted to have played such a critical role in MCM's decision to agree to acquire The Tab. The structure of MCM and the Company's investment of 24% allows us to participate in opportunities that we feel we can add significant value and build critical mass for the wider operations of the business."

Business Development Officer, Liam Harrington, said, "The Tab is the number one market leader in the student market in the country with an exciting targeted product that we believe we can assist in fulfilling its true commercial potential.  With an expansive local network for distribution and quality writers and the largest presence within universities for distributing content, we believe the foundation is in place whereby we can utilise our past experience of rapidly growing social media platforms."   

**ENDS**

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

John Quinlan	Iconic Labs Plc	c/o SBP Tel: [phone]
Damon Heath	Shard Capital Partners LLP	Tel: [phone]
Erik Woolgar	Shard Capital Partners LLP	Tel: [phone]
Melissa Hancock	St Brides Partners Limited	Tel: [phone]
Juliet Earl	St Brides Partners Limited	Tel: [phone]

 

END

 

 

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