7digital Share Discussion Threads

[kcr69] 01/7/2021 12:43

GB904150...apologies, appears we were overlapping own a similar theme.

[kcr69] 01/7/2021 12:42

In the interests of a more balanced debate, I think your comment would read more accurately if you stated “Yesterday(s) message sounded very much like they could go bust in near future” if it wasn’t for a myriad of reasons that make it very unlikely that they will go bust in the near future.

Of primary note is the fact that the two major shareholders have represented to the directors via a letter of intent confirming both the intention and necessary financial support to meet working capital and growth needs as and when they fall due for a period of at least 12 months. If we add to the above an apparent strong confidence in the delivery of revenue planning (stated 6 months into the financial year) which would eradicate the need for further third party or shareholder financing, and the fact that an oversubscribed placing raising £6m only a few months ago is unlikely to be readily ‘written off’ by those institutions involved, for what would likely be a far smaller additional amount, and only in worst case scenarios, and I think we at least have the basis for a decent both sides of the argument debate.

Of course ‘near future’ needs defining, as does a consideration as to whether this is no more than a very much more mature and professional board highlighting all operational facts and possible risks, and with it the possible need for further support,…a scenario that far bigger and more illustrious business have known only too well over the past 18 months, and for that matter resolved with the aid of shareholder support.

I should of course add that I do not think it is either an ideal of desirable situation, albeit far from terminal at this stage. But of course, each to their own.

[gb904150] 01/7/2021 12:38

Marshsi - I disagree. mdchand selectively posted the two most negative paragraphs but not the one that followed it, which was:

The Group's two major shareholders have confirmed their financial support for 12 months from the date of signing these financial statements to allow the Group to manage its working capital, taking into account the plausible worst-case scenario, and to support growth needs as and when they fall due. The Directors are satisfied that the shareholders have demonstrated their intention and means to provide this funding as and when this is required. This has been represented to the Directors in a letter of support from the two major shareholders in the Group.

Crucially, that longer term support depends on them hitting the 2021 and 2022 revenue targets which they seem confident to do so. Recent deals announced by RNS also back that up.

"The sales momentum from the end of last year has continued in 2021, which we expect to translate into significant year-on-year revenue growth and deliver a full year of positive EBITDA. Looking further ahead, based solely on our current contracts and pipeline for 2021 - before the contribution from any new deals signed in 2022 - we expect an even stronger 2022 with a substantial increase in EBITDA and strong revenue growth over 2021."

The other positive was 71% GM's vs 64% in 2019.

At that level of GM's being reinvested back in the business 7DIG could be a massive growth company.

The key figures for me then are

Underlying Admin Expenses $6.95m

VS:
Revs $6.5m
GM's 71%
GP $4.6m

If they can get revenues up to $10m in 2021 with 71% GM's this business starts to look a lot more healthy. Then onwards with more growth in 2022.

In the short term though mdchand is right. Next 3 months will require support from shareholders and that's why the share price is so weak.

I was disappointed by the results and sold half my position but I think the long term 3yr+ outlook is good.

[marshsi] 01/7/2021 10:31

Yesterday message sounded very much like they could go bust in near future!!

[parsons4] 01/7/2021 07:22

Just added more for several reasons, the business case has changed hugely and current management have turned it round. The December Balance Sheet looks tight but should have improved since then. Previously the company was run so badly and nearly went bust and the investment community can't forget this, but it looks on the mend !! GLA

[mdchand] 30/6/2021 11:48

I wonder what the 3 month liability is and the size of that liability. The fact that its not very clear from the RNS really isnt help sentiment here. I'm pretty sure the existing investors will stump up the cash (if it comes to that), but at what discount to the current SP?

I'm invested in BOOM and they went through many jam tomorrow, but might need cash now RNSs for many quarters before the market eventually re-rated them. I wonder if history is repeating itself here.

The business model appears to be sound, but liquidity appears to be an issue (for whatever reason). If the market had more transparency on the 2 big contracts (Triller than that Chinese one) they might be more confident here.

Next interims will be far more revealing than this RNS in terms of future growth and revenue. The stupid thing is that the management will already know how the business did in Q1 2021, and could have helped themselves releasing those figure - even on an unaudited basis.

Tempted to add once the dust has settled / more visibility on q1 2021.

[mdchand] 30/6/2021 10:02

Never great to read the following comments in any RNS

'The stress test performed on the Group's forecast EBITDA, representing a plausible worst-case scenario, noted that there is a short-term liquidity issue over the coming three months that will be mitigated by third party financing or via the committed support from its shareholders. Beyond this period, should revenues be in line with the plausible worst-case sensitised forecast, continued support from the shareholders will be required to ensure the Group has sufficient liquidity to meet its liabilities as and when they fall due.

The Group is likely to be reliant on shareholder support in the short and medium term to ensure that there is sufficient liquidity to meet its liabilities as and when they fall due, should third party financing options not materialise. Should this funding not be received, significant doubt would be cast as to the Group's ability to continue as a going concern.'

So, in the short term, the Company may have insufficient liquidity over the next 3 months to meet its liabilities, which in turn, may require additional shareholder support. I guess that support will be contingent on how the business has performed this year. I know they have stated rev / EBITA will be materially ahead this year and next, but that's not exactly set in stone based on contracted revenues so I can understand why the market has marked them down.

That said, it could be an over-reacion to a worst case scenario so let's see what happens in the next 3 months. Could be a buying opportunity then.

[parsons4] 30/6/2021 06:57

Results ok but expectations for 2021 and 2022 very high. Very happy to stick with my reasonable holding here GLA

[ny boy] 29/6/2021 14:48

Hopefully a big rise next quarter, stay long here for big rewards imo but dyor

[gb904150] 29/6/2021 14:36

It does bode well. Strong rise on 6m shares traded. And I still expect final results to be tomorrow.

[wapper] 29/6/2021 11:26

It's about time they woke up. Long overdue. Chart looking good for eventual big breakout.

[dickiebird2] 29/6/2021 11:17

Is something Brewing !

[ny boy] 18/6/2021 14:17

Holding long term for 10p +, ticking up slowly

[gb904150] 15/6/2021 07:54

The answer I got was from investor relations (7digitalIR@luther dot co dot uk). Copied here:

The reporting dates for 7digital haven't been disclosed just yet. All I can say at this stage is that the Final Results for YE 2020 will be before the end of June, in line with AIM requirements.

So correct, they might not have been disclose when they will be, but they must be before end of June.

[ashleyjv] 14/6/2021 15:43

Not confirmed


Upcoming events on 7DIGITAL GROUP PLC
09/30/21 Interim 2021 Earnings Release (Projected)
09/29/22 Interim 2022 Earnings Release (Projected)
09/28/23 Interim 2023 Earnings Release (Projected)

Past events on 7DIGITAL GROUP PLC
12/10/20 | 02:00pm Investor Meeting
12/10/20 | 01:00pm Annual General Meeting
09/29/20 | 06:00pm London South East Investor Webinar
09/29/20 | 07:02am FY 2019 Earnings Release

[gb904150] 14/6/2021 15:33

I'm told that results for YE 2020 will be released in June. It's been such a long time since we heard any solid update there's no confidence in the figures, despite Paul Langworthy insisting the company was cashflow positive when he last did an investor call back in Dec 2020.

Time will tell but I share your optimism on 7DIG. They appear to be in a good niche, providing a music platform B2B and have signed some huge deals. None of their customers will want to faff around sorting music rights and royalties, they just want to choose their music and go.

The last (oversubscribed) fundraise was Sept 2020 at 2.2p and they raised £6m but then confirmed in December they were cashflow positive.

No broker coverage, no investor updates, only the monthly newsletter to go on and the RNS's which sound positive. gl Wapper!

[wapper] 14/6/2021 14:56

This company is so far under the radar it's unreal. The long sideways move on the chart suggests when it finally breaks out it will be significant. The NFT Rns went virtually unnoticed. 7Dig are in my list of Ten potential 10 baggers for the next 12 months. GLAH

[mdchand] 21/5/2021 07:10

hxxps://www.universalmusic.com/triller-and-universal-music-group-announce-worldwide-licensing-agreements-for-recorded-music-publishing/

My take on today's announcement is that this deal will supercede the deal 7dig had with triller for UMG artists only. However, one could argue that UMG could also deal similar deals with other clients of 7dig. Guess it depends how much income is being siphoned away by 7dig and the monetary value to UMG to get a deal done directly.

Still very positive on this share but until we get a sense of how their existing 'tier 1' deals are going with Triller and Kuaishou I can see why the markets are reluctant to push them higher.

[axonic] 04/5/2021 18:22

I agree enewman36, I don't why a rough guidance isn't included. However, I think PL said that any RNS announced = £££'s so let's see what happens.

[enewman36] 04/5/2021 11:00

It's good that we are getting the contracts but as usual there are no numbers to back them up, so how does the market know how to value them, hence the retrace.

[chinese investor] 04/5/2021 07:04

Great Start !

[axonic] 04/5/2021 06:56

yes, an excellent RNS today.

[zico01] 04/5/2021 06:50

More good news :

7digital signs five contracts with new and existing customers

Wins in key markets of home fitness and background music service plus multiple customer renewals position the Company for further growth

7digital (AIM: 7DIG), the global leader in B2B end-to-end digital music solutions, is pleased to provide an update on recent new customer contracts, together with existing customer renewals, including within the Company's key target market of home fitness and health. These new and renewal contracts underpin growth plans for the Company's Music Platform-as-a-Service and provide additional visibility over revenues, with up-front set-up fees and fixed recurring monthly fees.

Two new clients

The Company has extended its strategic position as a leading provider of music services to the home fitness industry by signing a 24-month contract with a new client in the home fitness sector serving the US market. The client will utilise 7digital's catalogue and API playlisting tool, enabling instructors or users to access a fully rights-cleared catalogue to download commercially compliant music that can be seamlessly synchronised with video programmes and made available on-demand - eliminating the need for separate, complex or manual back-end processes.

7digital has also signed a 36-month contract with Viihdeväylä Oy, a Finnish company that provides background music and playlisting curation through their Maestro Pro offering to restaurants domestically, as well as a variety of retail, leisure and entertainment organisations, including cruise liners. 7digital will provide Maestro Pro with catalogue access and label ingestion based on its publisher and label clearances as well as providing usage reporting.

Contract renewals

The Company has extended its relationship with a fast-growing B2B music streaming service. The renewal of its agreement for 12 months to provide content fulfilment services from 7digital's extensive music catalogue will enable the platform to provide on-demand streaming for brands and businesses as well as playlisting curation capability by genre, sound and business type using fully licensed music.

In addition, 7digital has signed renewals with two other clients, Swiss retailer Ex Libris and media company Global Radio, owner of the largest commercial radio company in Europe. Each of these contracts are renewed for a minimum of 12 months.

Paul Langworthy, Chief Executive Officer of 7digital, said: "These new and renewed contracts provide an extremely strong base for 7digital's growth plans this year and, with term lengths of up to 36 months, also support our revenue visibility going forward. We are excited to be expanding our customer base and delivering on our strategy, including adding to our list of home fitness clients - a segment that we expect will deliver substantial growth. At the same time, we pride ourselves on the quality of our service and platform offering, leading to extremely high client retention and growth in contract size and scope. As we continue to expand our near-term pipeline, these latest contracts will contribute to our expectation of a positive outturn in 2021 ."