7digital Share Discussion Threads

[tiger60] 28/9/2017 10:59

1.9m traded at the end of day yesterday in 3 trades - look like sells

[verulamium] 27/9/2017 00:03

The lack of reaction of the share price to what looks increasingly likely to happen in the business reminds me very much of Zoo Digital - stuck between around 7 and 12 for well over a year before finally taking off and a 200% rise in the last couple of months. When this finally breaks out of the range it should be dramatic.

[barnetpeter] 26/9/2017 23:21

Strange price movement today. Good that it closed flat. The price cannot break the current 6 low 8 high levels though. Looks cheap but no shortage of sellers.

[pet lover] 26/9/2017 16:59

The financial firm have set target of GBX 14.00 on 7digital Group Plc (LON:7DIG) shares. This is 107.41% from the last price. In a note revealed to investors and clients on Tuesday, 26 September, finnCap reconfirmed their “CorporateR21; rating on shares of 7DIG.

[pet lover] 26/9/2017 16:10

Just as I have been posting:

Get revenues up

Then each extra pound of income comes with massive margins.

2019 is the year where profits can double AGAIN.

REASON 2018 spend will not be required.

That will produce way over a ten bagger here .

[dibs61] 26/9/2017 15:57

Michael - where did you get 2018 forecasts from?

Intraday reversal 👍🏻

[michaelmouse] 26/9/2017 15:36

Nice intra-day bounce suggests that the results are being digested and the focus is turning to 2018.

Onwards and upwards?

[michaelmouse] 26/9/2017 15:33

Interestingly the forecast for 2018 is revenues £25m, pre-tax profit £2.4m and EPS of 1.35p. This puts the shares on a forward p/e of 5.

Is the market pricing in a placing or Armageddon or both?

If neither occurs and they get somewhere near that number then surely the company will be classified as a high growth company and priced on a p/e ratio of (say) 25. This would give a share price around 34p.

Risk/reward has got to favour reward surely?

[dibs61] 26/9/2017 14:07

I contacted the company this morning to enquire regarding the prepayments on the MMS deal mentioned in today's report. I am very pleased to say that I had a callback from a senior member of the company who was very helpful. They clarified that the Aug due payment had been received. They also clarified that the cash sum of €1.4m would be received on the 31st October. Very impressed by the companies response and they thanked me for my support as a shareholder. I think (imo) this allays concerns over any possible fundraising.

The senior employee also advised they were between investor meetings so there is further communication going on into the market.

I hope if they read this they will not mind as my assumption is that all of the information they provided was acceptable for public consumption - not just for myself.

[michaelmouse] 26/9/2017 11:59

Yes I don't disagree with any of that Dibs61.

[dibs61] 26/9/2017 11:52

michael - we are looking for the inflection point. The share price has bobbed up and down between around 5.5 to 7.5 for a long period now reflecting the markets uncertainty about real progress.

I'm convinced enough that we have reached that point. I've no doubt revenues are going to grow strongly from here but they must show the ability to scale AND maintain control of costs - that's their biggest challenge. No reason why they shouldn't once the integration is complete - op costs should be fairly static showing op leverage

[michaelmouse] 26/9/2017 11:41

Not everyone's cup of tea Hydrus, but that's what makes a market.

Not a great fan of technical factors but a glance at the recent chart looks promising.

[hydrus] 26/9/2017 11:36

Thanks Michael - it's not one for me but your post is helpful

[michaelmouse] 26/9/2017 11:23

Yes Dibs61 it helps significantly but it'll still be tight. It depends how quickly they become cashflow positive in 2018. The key thing though is that any fund raise (if needed) should be small and dilution limited. If trading remains in line then I expect the share price to move very rapidly.

Imv the downside from here is very limited whilst there is huge potential upside.

[dibs61] 26/9/2017 11:09

I believe I may have found the answer to the question of how much cash they are getting from the pre-payments in Aug and Oct. Further digging in the detail of the report reveals:


"A new contract to the value of £6.0m over its lifetime, including an initial set up fee of £1.4m, has also been agreed with MMS to develop several new digital music services."

They refer to two pre-payments on this contract to be made in Aug and Oct early in the report. The above statement referring to £1.4m initial set up fee could clarify how much they are getting and, one would hope be enough, to avoid any need for a further csshcall.

If I'm right it's positive for the share price which the market may not have picked up on.

[dibs61] 26/9/2017 10:17

BUT - I think when sentiment turns - it will be quite marked in share price terms. I intend to HOLD and wait.

[dibs61] 26/9/2017 10:16

tiger60 - great to see some sensible balanced posts - appreciated. And I largely agree with you. Investors unconvinced as yet. Much caution.

[tiger60] 26/9/2017 10:05

Their Content division saw a fall in revenue from 1.4 to 1.1m due to a positive one of event in 2016.

As an aside note that they state costs although slightly reduced in the 6months just gone will creep up again as the integration work caries on.

All in all a good release but lacking that revenue jump or positive change in predicted end of year figures to gain real traction at this stage. I think their history is holding them back.

Hoping/Expecting a slight correction back up this afternoon, and maybe a new Edison research note in the coming days. Traders disappearing...

[hydrus] 26/9/2017 08:45

Michael - as a sensible individual can you explain the seemingly reduced revenue?

[tiger60] 26/9/2017 08:42

The problem is there is no point trying to extrapolate the 1st half results into the second to make a sound prediction. As we know the results are heavily biased towards H2 but we don't have the necessary numbers to see whether they can pull it back and meet their 1.5m operating loss target.

In what I see as turning market there are not enough people willing to jump in on potential most will want to see the bottom line improve and turn positive. PL may be right because by that stage the share price will be at a premium but then again if you look back there have been a number of false dawns over the last few years so whose to blame them.

I believe numbers along with the contracts - even high level - would give us more to work with. Yes we got a new contract but how do we know the substance/margins behind it?

Good luck all maybe a up and down day but it may well settle in the 5-7.5 range for yet a few more months

[folderboy] 26/9/2017 08:33

The market seems to be agreeing with those worried by cash position/revenue.

If the share price cannot rise on such positive results then I fear I may be waiting a few more years before I can sell these at anything other than a loss.

[dibs61] 26/9/2017 08:26

Hydrus - I noticed that about the revenue figures too and was a bit puzzled? Not what I expected. It's clear that the MMS deal will add significantly to sales but I was hoping there would be pre-MMS organic growth. Anyone else any balanced thoughts on this?

I'm a holder btw