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7digital

  • BY: Andrew Hore |
  • POSTED: 22/01/2016 |

Digital music streaming technology business 7digital says that revenues were flat in 2015 but there is a greater proportion of higher margin revenues as download revenues reduce. 

Reported revenues will be around £10.4m and the underlying loss will be £2.7m, down from £3.8m, as expected. The annualised run rate of monthly revenues is £5.8m, compared to £3.4m at the end of 2014.

7digital has revealed a new licensing deal with music download service eMusic, which is relaunching following its acquisition by TriPlay. The deal involves the use of the 7digital platform to enable new features to be added and it will generate revenues this year. 

7digital plans to acquire French rival Snowite, which will help to update the group’s digital platform without additional cash costs. 7Digital is paying 7.32 million shares for Snowite and taking on debt of around £1.3m. The deal should add £1.2m of annual revenues, of which £864,000 is recurring. There should be £500,000 of annual cost savings next year. Snowite is in French bankruptcy protection so the completion of the acquisition depends on negotiations with the French courts but this is expected to happen by the end of March.

At 6.13p a share, 7digital is valued at £6.6m.

The 2015 figures will be released in March 2016.

Revenues are expected to rise to £13m and the loss should halve to £1.3m. That is before the Snowite acquisition, which should enable the outcome to be even better.

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