7digital Group PLC Trading Update and Contract Wins (3632M)

TIDM7DIG

RNS Number : 3632M

7digital Group PLC

28 July 2017

28 July 2017

7digital Group plc

("7digital" or "the Company")

Trading Update and Contract Wins

Current Trading

7digital (AIM:7DIG), the B2B digital music and radio services company, today issues a trading update for the half-year ended 30th June 2017.

7digital performed well in the first half of the year. Total Group revenue grew by 13% to GBP5.93m from GBP5.25m in H1 2016, with growth across the high margin licencing and creative revenue streams particularly strong. Licensing revenues rose by 25% with the key monthly recurring revenues up by 27%. The cash balance at 30(th) June 2017 was GBP1.3m.

During the first half of 2017, 7digital was awarded contracts with a combined value of approximately GBP5.0m, including set up fees and monthly recurring revenues. These included contracts with DTS for work in the automotive sector, the world's first full MQA high quality streamed music service with HDtracks and the re-launch of TriPlay's eMusic service in the US.

MediaMarktSaturn, Europe's largest retailer of consumer electronics, also became a new 7digital customer after the completion of the acquisition of 24-7 Entertainment on June 20(th) . The Company has a three-year contract for existing "Juke" music services in Germany and the Netherlands totalling GBP11m, and a new contract for development of future services worth GBP6m. The acquisition is expected to add approximately GBP5m to 7digital revenues in 2017 and more than GBP8m in 2018.

New Contract Wins

7digital is pleased to announce today that it has signed a two-year deal with Global Eagle Entertainment Inc. (Global Eagle). Global Eagle is a leading worldwide provider of inflight entertainment content to the airline industry and offers Wi-Fi, movies, television, music, interactive software and portable inflight entertainment services to a number of regional and flagship carriers. Customers of Global Eagle include Southwest Airlines, Norwegian Air, Emirates, Japan Airlines, Singapore Airlines, Qatar Airways, Air France and flydubai. 7digital will provide Global Eagle with technology, access to music, web development expertise, and rights holder reporting for new inflight services launching in Q4 2017 across a number of territories.

The Company has also agreed a three-year deal with French company Deedo SAS to power a new streaming service across 27 markets. The focus of the service, due to launch in Q4 2017, is to cater for listeners in Africa and the African diaspora with Pan African music catalogues. 7digital will provide technology, access to music and web app development for the service.

In addition, 7digital has signed a deal with US-based company Fan Label, a dynamic new music fan engagement platform set for release in September, to provide access to the Company's preview clip catalogue for a new service. 7digital will also handle licensing and rights holder reporting. The contract is for a minimum initial term of two years.

As detailed at the recent AGM, the Board now expects 2017 to result in a much reduced loss when compared to that of 2016. The Board remains confident of substantial revenue growth in the second half of this year and expects that 2018 will be a year of profitability and positive operating cash flow as the full benefits of the 24-7 acquisition are realised.

Simon Cole, Chief Executive of 7digital, said:

"We have made a strong start to the year, at a time when we were also concluding our deal with MediaMarktSaturn to acquire the 24-7 business. That acquisition is already making a contribution and, as previously announced, we expect it to make a significant contribution to our full year revenues.

It is also pleasing to see, amongst our recent customer wins, a new area of business opening up with the addition of our first in-flight entertainment client. As the digital music industry continues to expand into new areas of current music consumption, 7digital is well positioned to be the provider to the many new services which will emerge".

Enquiries:

 
                                                 020 7099 
 7digital Group                                   7777 
 Simon Cole, Chief Executive Officer 
 Matt Honey, Chief Financial Officer 
  Holly Ashmore, PR Manager 
 
 
   finnCap (nominated adviser and                  020 7220 
   broker)                                         0500 
 Geoff Nash / Carl Holmes - Corporate 
  Finance 
 Mia Gardner - Corporate Broking 
 
 
   Weber Shandwick (financial PR 
   agency) 
   Nick Oborne - [e-mail] 
   Tom Jenkins - TJenkins@ webershandwick.com 
                                                   020 7067 
   About 7digital (http://about.7digital.com)      0000 
 

7digital is the global leader in end-to-end digital music solutions. The core of its business is the provision of robust and scalable technical infrastructure and extensive global music rights used to create music streaming and radio services for a diverse range of customers, including consumer brands, mobile carriers, broadcasters, automotive systems, record labels and retailers. 7digital also offers radio production and music curation services, editorial strategy and content management expertise.

7digital fosters industry growth and innovation by simplifying access to music for clients such as Onkyo, Global Radio and Musical.ly. From years of being the largest independent producer of programming for the BBC, launching Radioplayer in multiple territories, and powering services for partners like HMV, Electric Jukebox and Panasonic, 7digital is perfectly positioned to lead innovation at the intersection of digital music and next-generation radio services.

This information is provided by RNS

The company news service from the London Stock Exchange

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July 28, 2017 02:00 ET (06:00 GMT)