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Highlights
- Vinyl Group acquires Concrete Playground for $5 million.
- Acquisition to enhance Vinyl's media division.
- Concrete Playground to integrate into Vinyl's operations.
Australian music tech company Vinyl Group (ASX:VGL) has announced the acquisition of the popular online travel guide website Concrete Playground in a $5 million deal. This move adds another publisher to Vinyl Group's expanding portfolio of media companies, following its recent purchases of youth music brand Brag Media in February and trade publication Mediaweek in September.
Concrete Playground, founded in 2009, offers digital travel guides for cities including Brisbane, Sydney, Melbourne, Auckland, and Wellington. Each city features a dedicated homepage with sections on restaurants, events, bars, cafes, pubs, shops, hotels, and activities.
Rich Fogarty, founder and CEO of Concrete Playground, expressed optimism about the acquisition, stating that Vinyl Group's resources and vision would elevate the platform to new heights. "This milestone reflects the talent, creativity, and dedication of our team, along with the trust of our readers and partners," Fogarty said. "As the business transitions to new ownership under Vinyl Group, I’m confident their vision and resources will inspire even more people to discover the very best their cities have to offer."
According to an ASX statement, Vinyl Group will acquire 100% of the issued capital in Concrete Playground, paying $3.5 million in cash and $1.5 million in shares. The website has generated $4 million in revenues over the past 12 months, and Vinyl Group expects the acquisition to deliver operational efficiencies and accelerate its timeline to achieve group-wide positive cash flow within six months. Concrete Playground will be integrated into Vinyl Group's media division.
Vinyl Group has been actively expanding its asset base through a series of acquisitions. Its media division now includes Brag, Funkified, Mediaweek, and Concrete Playground. Additionally, the company operates an eCommerce platform, vinyl.com, a tech platform, Vampr, a social networking app for musicians, and Jaxsta, a music directory database similar to IMDb for film and TV. In October, Vinyl Group announced an agreement with US-based business-to-business music licensing platform Songtradr to manage and sell advertising across Songtradr’s portfolio of digital properties.
Vinyl Group's revenues for the 2024 financial year reached $4.95 million, a significant increase from $582,208 in FY23, primarily driven by its newly acquired media assets. However, the company reported net losses of $16.9 million, with an operating loss of $6.6 million. The annual report, published on October 1, highlighted a "material uncertainty" regarding the company's ability to continue as a going concern due to the net loss for the year. Despite this, CEO Josh Simons remains optimistic, targeting cash-flow positivity in the first half of FY26.
Simons emphasized that the media arm of the company is currently the profit engine, supporting the growth of the tech side, which has a higher fixed cost base. "The tech side is growing faster, but it also has a higher fixed cost base. As we try and outgrow that fixed cost base, we expect that pendulum to swing the other way," Simons said.
