Year End Trading Update
7digital is pleased to share its latest trading update for the year ended 31st December 2017.
The company's licensing revenue grew by 52% year-on-year 2016 to 2017 and losses were narrowed to better than market expectations. 7digital grew in 2017 with significant, long-term customers and the transaction with MediaMarktSaturn has proven transformative.
9th February 2018
7digital Group plc
("7digital" or "the Company")
Year end trading update
7digital (AIM:7DIG), the B2B digital music and radio services company, today issues a trading update for the year ended 31 December 2017.
Unaudited revenue for 2017 is expected to be up 52% at £17.3m (2016: £11.3m). The Company's contracted and billed revenues for the period were in fact £18.6m, with revenues from major new client MediaMarktSaturn ("MMS") at £6.5m. However, of this MMS revenue, £1.3m is to be recognised in Q1 2018 rather than in the 2017 financial period leading to reported revenue of £17.3m.
Losses at Adjusted LBITDA level are expected to be significantly reduced from the previous period and be better than market expectations.
Following the acquisition of 24-7 in June, operational restructuring has already begun and has resulted in the closure of the Company's office in Paris and a reduction in headcount. The Board is pleased to report good progress towards its goal of profitability in the current financial year. As previously announced, the Company has continued to make progress in signing new clients to its platform. This is in line with the Company's Platform as a Service ("PaaS") model. The PaaS model typically includes an upfront fee and an ongoing monthly recurring fee to support the platform.
Simon Cole, Chief Executive of 7digital, commented:
"2017 was a year which marked a major transformation at 7digital. Our acquisition in June of 24-7 and, with it, the contract to supply services to MediaMarktSaturn throughout Europe has cemented our market leading position as a business-to-business platform in the rapidly growing market for streamed music and radio services. Perhaps more importantly, it led to a profitable H2 and a significantly improved EBITDA loss for the year, ahead of expectations. This provides the right foundation for full year profitability in 2018."
This announcement contains information which, prior to its disclosure, was inside information for the purpose of the Market Abuse Regulation.