TIDM7DIG
RNS Number : 1470I
7digital Group PLC
10 December 2020
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10 December 2020
7digital Group plc
("7digital" or "the Company")
Business and Trading Update
7digital (AIM: 7DIG), the global leader in B2B end-to-end
digital music solutions, provides the following trading update and
reports on the significant progress made by the business in the
second half of the year.
Operational Profitability Achieved as Expected
In the second half of the year, 7digital has been capitalising
on its leading music platform, global music catalogue and industry
experience, and focused on growth in a number of emerging market
trends and formats. The Company has seen significant progress in
three key areas - social media, home fitness and artist
monetisation - where music streaming plays an integral role in
customer engagement. This is evidenced in new contracts signed in
the second half such as a global technology company, Triller and
Apex Rides alongside customers renewing or extending contracts such
as ROXI, GrandPad, jazzed and Moodagent. In total, the Company has
signed five new contracts, four expansions and eight renewals in H2
2020. As a result, the Company is pleased to confirm that it has
achieved operational profitability in the last quarter of 2020 and
increased revenues in H2 2020 when compared to H1 2020, in line
with management's expectations.
7digital typically enters into contracts which include a fixed
fee and variable, usage-based terms, ensuring that the Company
benefits as its customers scale up their offering. As a consequence
of new contracts ramping up in 2021, clients increasing their usage
of 7digital's platform and deals in the pipeline, the Board
envisages receiving incremental revenues from these customers and
expects to report substantial year-on-year revenue growth in FY
2021, resulting in operational profitability for the full year
2021.
Specifically, in the second half of the year, the following
progress was made in the three key areas:
Social
In the second half of the year, the Company signed a contract
with Triller to power the world's fastest growing social music
video app, which has more than 250 million downloads. Last month,
Triller hosted the Mike Tyson vs Roy Jones Jr boxing fight, which
was streamed live on the app and shattered pay-per-view pre-sale
fight records. In November, Brazilian football star Neymar Jr
became the latest celebrity to switch from TikTok to Triller,
becoming an official brand ambassador. The footballer, who has 143
million followers on Instagram, will post content exclusively to
Triller. 7digital is set to capitalise on growth in the usage of
Triller. Looking ahead, the Company expects two significant
contracts in 2021.
Home Fitness
7digital entered the home fitness market in September 2020 by
signing a 12-month contract with Apex Rides. This smart bike and
in-home fitness platform has now successfully launched and is
leveraging 7digital's catalogue and playlisting tool to give
customers access to music-powered classes. During the half,
7digital integrated its advanced label and publishers clearing
tool. This enables the Company to offer an end-to-end solution to
the fitness industry and positions 7digital to be a dominant music
solution provider. The Company anticipates this segment to continue
to grow in 2021 and expects to sign c. six deals next year.
Artist Monetisation
eMusic Live, which was launched in August 2020 to create the
industry's most advanced commercial live streaming platform, has
hosted multiple live concerts and started generating revenues for
7digital. In November 2020, eMusic Live partnered with
world-leading music agency HarrisonParrott to create Virtual
Circle, an exclusive online concert and music hub for classical
music listeners. Virtual Circle will feature performances in 2020
and throughout 2021 from its roster of 300 international artists,
touring clients, orchestras, chamber orchestras, symphonies and
dance groups, alongside other partner organisations . The platform
launched on 8 December 2020, with an exclusive international
performance by the Oslo Philharmonic. In 2021, the Company plans to
stream hundreds of shows and as a result expects eMusic Live to
contribute significant millions to Company revenues.
High Retention Rate and Renewals
In addition to the extensive pipeline of new commercial
opportunities, the Company is pleased to report a very high
retention client rate of 93%. The strength of the Company's
technology platform, global music catalogue and industry experience
has enabled 7digital to extend and expand its partnerships with
exciting music-based innovators.
The Company has supported new client jazzed in rolling out its
new HD tier to its music service and its launch globally in new
major territories. Likewise, 7digital is supporting the reach of
US-based GrandPad across Europe, starting with the UK and Ireland.
Similarly, the Company is backing the expansion of Moodagent, a
streaming service that creates personalised playlists from songs,
artists or moods, to multiple countries across Europe as well as in
India, a market that posted 18% in music revenues growth in 2019.
Made-for-TV music entertainment provider ROXI, backed by Robbie
Williams and Kylie Minogue and now pre-loaded on Sky Q set-top
boxes, renewed its partnership with 7digital to deliver shared
interactive music entertainment experiences to millions of Smart
TVs and satellite set-top boxes across Europe.
Commenting, Paul Langworthy, Chief Executive Officer of 7digital
said: "We had a better performance in the second half of the year
compared to the first half of 2020 as world-renowned new clients
such as a global technology company and Triller signed contracts
and long-term clients such as ROXI renewed their contracts with us.
As a result, the Company became operationally profitable for the
first time, as per management's expectations.
"7digital is gaining momentum in each of our three key areas.
Our strategy of focusing on social, home fitness and artist
monetisation demonstrates our ability to create value for new
markets in a rapidly evolving music industry. As we ramp up
activity in these markets and continue to support and improve
services for current clients, we anticipate substantial growth in
our business and revenues in 2021."
Online Investor Meeting
The Company will host an online investor meeting, open to all
existing and potential shareholders, today, Thursday, 10 December
2020 at 2.00 p.m. GMT. On the call, 7digital CEO Paul Langworthy
will provide an operational overview of the business as well as the
growth drivers for the Company, followed by a question and answer
session.
Interested parties can register to attend and submit their
questions using the following link:
https://docs.google.com/forms/d/15mmnMcTpsOX3_6KQwAjsDFpUvV5L2PUV3Wgz0seRVCI
Enquiries
7digital 020 7099 7777
Paul Langworthy, CEO
Arden Partners (Nominated Adviser and Broker) 020 7614 5900
Richard Johnson, Benjamin Cryer
Luther Pendragon (Financial PR) 020 7618 9100
Harry Chathli, Joe Quinlan
About 7digital ( www. 7digital .com/ )
7digital is the global leader in B2B 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. These include consumer and social media brands,
online fitness technologies, 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. From years of being the largest
independent producer of programming for the BBC and powering
services for partners like Triller, Soundtrack Your Brand, Global
Eagle, Grandpad and Fender, 7digital is perfectly positioned to
lead innovation at the intersection of digital music and
next-generation radio services.
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