7digital Share Discussion Threads

[topazfrenzy] 23/6/2017 09:14

michaelmouse, thank you for those two links, spot on, 7DIG are likely the ones involved to service Tesla with its custom made streaming.

This is really just the start for the company IMO and buying up the competition and having them on board is very exciting. Market cap of £12M, let's just say multiples of that are on the way!

[pet lover] 23/6/2017 08:28

Well worth a good read.


RECURRING REVENUE COUNTS IN INDUSTRIES FAR BEYOND SOFTWARE



Posted by Alan Fullerton in Advice for Entrepreneurs, Government/Defense/Aero, Healthcare, Industrial, Mergers and Acquisitions, Selling a Business, Strategic Advisory, Telecom & Networking, Valuation Services

The recurring revenue (“RR”) business model gets a lot of attention in software M&A and growth investment, and for good reason. Most growing subscription/ software-as-a-service (SaaS)-based software companies trade in the public markets for north of 6x revenue and many of those fortunate few with annual revenue growth over 40% trade for over 10x revenue. The value of the recurring revenue service model in the software industry is indisputable. But what about other industries? Telecom, healthcare, distribution, banking, music and video, even large capital businesses such as jet engines, have all incorporated recurring revenue in their “business-as-a-service” model.

The predictability of revenues and earnings is inherently better in a business with recurring revenues. Subscriptions, razor / razor-blade models, rentals, leases, monthly fees, ongoing maintenance and support contracts, customized consumable products, etc. all drive more predictable revenues than, say, capital equipment sales. The RR business starts each year with a set of returning customers, purchasing a contracted or otherwise predictable level of products or services. These customers return for reasons well beyond mere convenience – they rely on the RR business for their own operations and cannot easily switch to another vendor or service provider, or are contractually obligated to continue with the vendor for a period of time. For virtually all elements of competitive advantage that relate to customers, the recurring revenue business model enhances that advantage, creating more value for the RR business’s shareholders.

Examples of recurring revenue models outside software include:

contracts for IP phone services,
healthcare regulatory-driven services and products consumed in GMP environments,
vendor managed inventory,
wealth management,
Spotify and Netflix, and
GE Aviation’s parts, maintenance, financing and service contracts.
These are all examples of recurring revenue business models applied to industries beyond software.

It’s our experience that businesses incorporating recurring revenue in a significant way can trade for multiples well above those in their respective industries that do not. While the software industry may trade on multiple of revenues, much of the rest of the word focuses on some combination of EBITDA, free cash flow, and growth (and cost of growth). The value from a RR model can be seen in the more modest sales effort necessary to maintain and grow the business, and the better margins that can be achieved for the same level of growth. The company with little in the way of recurring revenue starts each year at $0 and builds from there; 100% of the sales effort is aimed at bringing in new customers and perhaps the first 11 months of the year are spent getting to the same revenues as the prior year, so that the last month generates 8% annual growth. The RR business starts with a base of business. For some of our clients that has meant zero or negative churn – the expansion of returning customers – with a modest sales effort aimed at those clients – more than makes up for any customer attrition. It’s our experience that these companies grow faster with less sales effort, and therefore drive more profit margin, than companies lacking a recurring revenue component. For closely-held companies, this can mean achieving double-digit revenue growth while maintaining 20%+ EBITDA margins, something only about one in sixteen public companies has managed (without acquisitions) in non-tech, non-financial industries this past year.

[pet lover] 23/6/2017 08:22

The operating gearing will soon come into play.

Each new contract comes with extremely high margin as the cost base is not far off fixed.

[michaelmouse] 23/6/2017 08:20

I'd imagine that any further guidance or price targets will wait until Wednesday. It's the AGM on Wednesday and we'll probably get guidance on trading for the six month period end June.

It'll be interesting to see if they've secured any further contracts which they usually bundle together and give total value.

Very positive interview from Pete Downton on Vox Markets. It really is a buy, accumulate and hold company imo.

[pet lover] 23/6/2017 07:50

Some weekend press would be nice

[pet lover] 23/6/2017 07:49

I agree,it's a tad odd.

Like you say it points to greater things.

Also might be a ten page job that takes a few days.

Must be a slight chance that 7dig might get eaten up themselves.

I think the rewards here will be huge in the next 18 months.

[michaelmouse] 23/6/2017 07:46

topazfrenzy - Yes I'd imagine 7Digital would be the perfect partner for Tesla.



particularly following this RNS-NON in February:-

[cloudwars] 23/6/2017 07:43

Strange FinnCap haven't released an update,after almost they new the deal was going through and I'm sure the contract with MMS had already been disclosed. Maybe they are waiting till the start of next week or maybe they had to say release a statement but there is something bigger at play here which they can't disclose ..........,

[topazfrenzy] 22/6/2017 20:50

Here we go, Tesla wants in, looking at getting music streaming in their cars ... the future is streaming and it's only just getting interesting, the growth story is phenomenal.



CRAZY not to be in 7DIG at this early stage and at this valuation, it's going to be bought for a $1Billion before long, that I can assure you!

[tiger60] 22/6/2017 19:42

'Emphasis of matter'

[tiger60] 22/6/2017 18:50

Posting pictures of yourself doesnt make your comments any more valid....

[topazfrenzy] 22/6/2017 12:49

LOL back monte1

[topazfrenzy] 22/6/2017 08:45

Added a few more on this dip, the future is digital streaming and this company is the most important B2B going, buy and hold for a huge future IMO

[pet lover] 21/6/2017 12:49

Podcast out.

Few facts even I had not picked up on.

Have the music rights to no less that 65,000 record labels inc the big 3 .!!

[fillipe] 21/6/2017 11:03

The best ask showing on L2 is 8.75p, which is what it moved up to as the day progressed. There is five mm's offering (only) 5k each..... a mere 25k, at 8.75p

In total there is only 35k shrs each side of the bid/ask on L2, so stronger movements can be expected as the trade frequency/size moves up.

f

[s34icknote] 21/6/2017 10:49

Bought in yesterday And topped up this morning !Looks an interesting development .Keep up all the posting pet lover. Sicknote N a i d y o r

[pet lover] 21/6/2017 09:59

Some stock will hit the market from the last placing, when it's gone its gone.

The trick is to get stock from punters and hold as an investment.

Value like this today is rare.

This share is being re rated today, now, in front of your very eyes.

[pet lover] 21/6/2017 09:53

7Dig is MQA*S ONLY B2B partner.

That alone is worth 3 times today's market cap.

[barnetpeter] 21/6/2017 09:51

Yes and a good start up 10 per cent. Let's hope it can push on above 9 p....