7digital Group plc announce results

16 August 2018 - Press release

7digital Group plc (AIM: 7DIG), the global leader in B2B digital music solutions, today announces its preliminary results for the full year ended 31 December 2017.

 

Operational Highlights:

• Excellent progress made in building the business and solidifying the Company's leading position in the rapidly growing streamed music market
• 7digital is now the premier supplier of business-to-business music and radio streaming services to corporates in sectors including retail, telecoms and the automotive industry, who are looking to strengthen their consumer offering
• Established position within the music industry – all the major labels are now customers of 7digital
• Organic and acquisition-led growth has positively impacted the financial performance of the Company with strong contributions seen across all revenue streams 
• Operational savings already realised and the process is continuing into 2018
• Transformative deal with MediaMarktSaturn ("MMS"), Europe's largest retailer of electronics and entertainment, to build their digital music services in 15 countries
• Successful acquisition and integration of 24-7 Entertainment ("24-7"), the only remaining significant business-to-business European competitor, expands client base which now includes MMS and Danish telco TDC

 

Financial Highlights:

• 50% increase in revenues to £16.80m (2016: £11.21m)
• Improving sales momentum with licensing revenues up 74% at £11.61m (2016: £6.67m)
• 63% reduction in adjusted EBITDA loss to £1.60m (2016: £4.31m)
• 33% reduction in adjusted operating loss to £3.76m (2016: £5.60m)
  • including one-off costs of acquisitions and share-based payments, unadjusted operating loss reduced to £4.97m (2016: £5.46m)
• Gross profit margin now 72% (2016: 69%)
• The Board is confident that the Group will be able to operate within its existing financial facilities with additional support from two major shareholders
• Momentum continued into H1 2018 with H1 total sales, before full consideration of revenue recognition, up 57% to £9.33m (2017 £5.93m)
• The Directors believe that the further convergence of the acquired businesses in 2018 will lead to operating profit and positive cash flow
• New interim CFO in place and recommended improvements to financial reporting systems being implemented