7digital Group

LN: 7DIG

£4.5m market cap

1.08p last close

7digital Group provides an end-to-end, white-label digital music platform and access to global music rights that enable its clients, which include businesses in the radio, electronics, social media and telecoms industries around the world, to offer music streaming and download services to their own customers.

Investment summary

7digital’s interims show good progress in developing its B2B offering, with revenues up by 52% on H117 (including acquisitions). This reflects strong demand from brands for music as an adjunct to other products and services, as a differentiator and in order to improve brand loyalty. With an expanding portfolio of commercial content and the brand relationships, 7digital is well placed to exploit its independence and build a sizeable business. With management reiterating its expectations of the group moving into profit in H218, our revenue and EBTIDA forecasts are unchanged. We expect EBITDA to move ahead strongly in FY19e, given growing revenues on a lower fixed cost base. This puts the shares on a rating well below software peers, currently valued on a P/E of 21.6x.

Y/E Dec	Revenue (£m)	EBITDA (£m)	PBT (£m)	EPS (p)	P/E (x)	P/CF (x)
2016A	11.2	(4.3)	(5.6)	(4.9)	N/A	N/A
2017A	16.8	(1.6)	(3.8)	(2.3)	N/A	9.3
2018E	N/A	N/A	N/A	N/A	N/A	N/A
2019E	N/A	N/A	N/A	N/A	N/A	N/A
Last updated on 21/03/2019

Fiona Orford-Williams

Director, media

Russell Pointon

Director, consumer & media

Sector
TMT

Share price graph

Balance sheet
Forecast net debt (£m)	N/A
Forecast gearing ratio (%)	N/A

Price performance

%

1m

3m

12m

Actual	13.2	(44.2)	(75.8)
Relative*	10.7	(49.0)	(76.6)
52-week high/low		5.8p/0.7p

*% relative to local index

Key management
Simon Cole	CEO
Julia Hubbard	CFO

Company website

Content on 7digital Group

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7digital Group

£4.5m market cap

1.08p last close

Investment summary

Y/E Dec

Revenue (£m)

EBITDA (£m)

PBT (£m)

EPS (p)

P/E (x)

P/CF (x)

Fiona Orford-Williams

Russell Pointon

Sector

Share price graph

Balance sheet

Price performance

%

1m

3m

12m

Key management

Content on 7digital Group

7digital Group (7DIG); agrees an initial two-year deal with Music Powered Games

TMT Edison Sparks

7digital Group (7DIG); agrees settlement terms with Juke Entertainment

TMT Edison Sparks

7digital (7DIG); confirms payment to HRMC of sums due from its subsidiary

TMT Edison Sparks

7digital Group (7DIG); ties up for £1.5m funding with three shareholders

TMT Edison Sparks

7digital Group (7DIG); makes significant progress in consolidation of business post 24-7 acquisition

TMT Edison Sparks

7digital Group – Broadening the base

TMT research

7digital Group(7DIG); interim results: total revenue up 52%

TMT Edison Sparks

7digital Group – Ready to rock ’n’ roll

TMT research

Executive interview – 7digital

TMT Edison TV

7digital Group – Juke relaunched on 7digital platform

TMT research

7digital Group – FY18 profitability on track

TMT research

7digital Group – Proposed £8.5m fund-raise

TMT research

7digital Group – H2 step increase in revenues underpinned

TMT research

7digital Group – A good start to the year

TMT research

7digital Group – Stand and deliver

TMT research

7digital – A step change with 24-7 deal

TMT research

7digital – Potential acquisition of 24-7 and share placing

TMT research

Executive Interview – 7digital

TMT Edison TV

7digital Group – EBITDA break-even reached, positive outlook

TMT research

7digital – EBITDA break-even in sight

TMT research

7digital – On track to break-even during H216

TMT research

7digital – Winning business

TMT research

7digital – Snowite completes – profits on stream

TMT research

7digital – Snowite and the 7digital

TMT research

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