7digital Share Discussion Threads

[tiger60] 10/3/2017 09:42

They have to underpin this with contract wins. I was hoping there would of been a 'softener' but unfortunately not.

Still think it will bounce back quickly

[michaelmouse] 10/3/2017 09:40

Hydrus - I think barnetpeter's post is a realistic one.

I would add that finances haven't deteriorated to a scary extent from the half-year results. I was expecting a fund raise far sooner. The fund raise is now underway, and will improve the balance sheet.

The fact that they expect to make an acquisition is both encouraging but also risky.

Not one for widows and orphans as they say, but if you don't like it then don't buy it. Simples.

Comforting to know Directors are willing to stump up £200,000, and if it pays off then the company will have a quasi-monopoly. If that happens then it could be a massively rewarding future.

[barnetpeter] 10/3/2017 09:10

The balance sheet does look terrible with negative assets and increased debt. The funding is needed urgently and there was a big loss indeed. This is a blue sky company of course and it has invested heavily and buying out the European company both makes sense and is dangerous too as it stretches management. We all know this is high risk that could blow up and end up as zero. A lot of costs here that need to be reduced...high reward if they can do that. Early stages here I think

[smithie6] 10/3/2017 08:55

Just tweeted ref results.

@fulltimeinvest

[hydrus] 10/3/2017 08:54

Michael I don't think they have adjusted revenue for currency gains though have they? That might mean revenues actually haven't really grown. Could be wrong on that point though. I get that early stage businesses need investment etc but AP are enormous and I can't find an explanation for it. That's worrying. My other concern which is fundamental to the whole business model - do increases in listens actually lead to incremental increases in revenue for 7dig? If not then essentially they are reliant on signing new block contracts which will of course help revenue but won't lead to explosive growth in revenue.

[ayl30] 10/3/2017 08:53

Annoying to see them drop but good strategy for them re future opportunities. I wasn't planning to sell any shares will sit tight

[michaelmouse] 10/3/2017 08:45

It would be more of a worry if they hadn't raised more cash to strengthen the balance sheet Hydrus.

7dig have reduced cash burn enormously this year, and hopefully (as is their aim) they will be EBITDA positive for the full year.

All their key metrics are going in the right direction. Turnover is up 15%, gross margins are up another 3% (71%) and they turned EBITDA positive in quarter four. Even their content business has shown healthy turnover growth.

Still plenty of work to be done, but if they can achieve an EBITDA profit this year then it looks very positive indeed.

[hydrus] 10/3/2017 08:19

Accounts payable are up to £6.9m up from £3.9mSo they have almost £7m of unpaid bills. Anybody got an explanation for that because at face value it looks terrible.

[michaelmouse] 10/3/2017 08:14

It was a shame about Guvera in H1 (already known), but gross margins are improving all the time (now up to 71%) and the quality of the customer base is improving.

[someuwin] 10/3/2017 08:14

If 7DIG can buy 100% of their only significant European competitor for only GBP1.66 million. It doesn't say much for the business they operate in. or for the implied valuation of 7DIG.

[tradermick1] 10/3/2017 08:13

Quiet start eh 6.6-6.9p online I though the first 10 minutes would see more volumes
than this.

[michaelmouse] 10/3/2017 08:11

Not entirely unexpected as I mentioned in September blog:-



Reasonable discount to current share price (10%).

The key going forward is that they were EBITDA positive in the last quarter of 2016, and are still targeting EBITDA positive for the full year 2017.

If the latest acquisition goes ahead then they will effectively have no competitors left in Europe.

They also have all three major labels on board.

Reads positively to me, and should put a floor under the share price.

[replicas1967] 10/3/2017 08:10

Yes, looking a good investment case this one !

[ashtree2] 10/3/2017 08:09

Looks to have a good future and happy to take part in the offer .

[tradermick1] 10/3/2017 07:58

tiger60

Yeah looks a great deal, short term pain medium term gain. I reckon half the placing will be in safe hands the other half to be flipped say around 15 million shares so it should be a heavy volume day I hope

[tiger60] 10/3/2017 07:53

It normally does but this placing is not just for working capital, half is for an accretive asset, with associated increase in revenue from 2018. That part looks sensible, if not good. It the other half that spoils it when already has 830,000 in the bank and promised positive operating profit for this year, maybe integration costs.

So it could be ok but expect the dip as investors work out the numbers.

[tradermick1] 10/3/2017 07:51

bigbigdave

Agree, read the results and outlook, should do well once they have churned the flipper in the placing. Directors buying £200k is a good chunk so while placings are never normally good this one is not terrible. Given what some Aim stocks are like when I saw placings I was thinking I hope it's not at a stupid price like 5p etc so 6.5p is about right given the highs and lows recently. Happy to hold.

"Our strategy to consolidate the market for supply of business-to-business streaming services included last year's successful integration of the French business "Snowite". Today we are announcing that we have agreed heads of terms for the acquisition of our only remaining significant European competitor, 24-7 Entertainment, which will include the contract to supply its current owner, MediaMarktSaturn, Europe's biggest electronics and entertainment retailer. We would expect to significantly strengthen our licensing revenues if the transaction completes as anticipated."

[hausofmaus] 10/3/2017 07:49

Not a bad price really, given recent share price history, and appreciated that it's open to current holders. Strengthening balance sheet very important, as long been a question mark here. And more consolidation of competitors, German market very important, so smart move.Of course we'll drop now, but medium-long term I think this is very good news.

[sweenoid] 10/3/2017 07:48

I have my shares in a nominee account , does that rule me out of the placing?
I don't think it will fall to 6.5p but if it did I would buy more anyhow
S

[simon1955] 10/3/2017 07:44

Oh dear, lets wait for potlovers ramp on this lol

[tiger60] 10/3/2017 07:43

I expect it will fall to the placing price anyway so can get it on open market. Hopefully then bounce off.