Trading for 2018 appears to have started on a solid footing, with Q118 licencing revenues double the prior year and, importantly, the re-launch of the Juke service on the 7digital platform in key territories in Q2. We plan to review our forecasts at the time of the full-year results at the end of June.
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7digital Group |
Juke relaunched on 7digital platform |
Current trading |
Media |
6 June 2018 |
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7digital Group is a research client of Edison Investment Research Limited |
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Trading for 2018 appears to have started on a solid footing, with Q118 licencing revenues double the prior year and, importantly, the re-launch of the Juke service on the 7digital platform in key territories in Q2. We plan to review our forecasts at the time of the full-year results at the end of June.
Year |
Revenue (£m) |
EBITDA |
PBT* |
EPS* |
DPS |
EV/EBITDA |
P/E |
12/16 |
11.9 |
(3.5) |
(4.7) |
(4.1) |
0.0 |
N/A |
N/A |
12/17e |
17.3** |
(1.0) |
(2.9) |
(1.8) |
0.0 |
N/A |
N/A |
12/18e |
24.9 |
3.0 |
2.1 |
1.2 |
0.0 |
3.4 |
8.0 |
12/19e |
27.6 |
4.6 |
3.8 |
0.8 |
0.0 |
2.1 |
5.1 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. Our forecasts are under review – awaiting finalised capital structure. ** Headline figures reported.
Headline revenues and EBITDA figures have been reported for FY17. Given the significant changes in the business over the last year, we expect to review our current forecasts when 7digital reports FY17 results at the end of June. Trading in 2018 appears to have started well, and while we look forward to more detail on the cost base, revenue forecasts for the year look supported.
Management has reported Q1 trading in line with its expectations for the year; contracts with a lifetime value of £2.3m were agreed in Q118; and total licensing revenues were £3.6m (£1.6m Q117). While licence revenues can be volatile depending on the extent to which set up fees feature versus monthly recurring revenues (MRR), it gives us confidence that trading is on track for the full year.
Q2 also appears to have started well. As part of its largest contract for MMS, 7digital has now re-launched the Juke music service on the 7digital platform in the Netherlands and Germany (its largest market). It plans to launch in Spain in the coming months and to all 15 markets across Europe over the next 12 months. This contract is sizeable and will enable 7digital to recognise set-up fees for the service and MRR related to the ongoing running of the platform in these territories from Q218. The group has also announced an agreement to licence its platform for an innovative new service for Powerchord, the parent company of Rocket Music Management, one of the UK’s leading music management groups (Elton John, Rag’n’Bone Man, Chris Difford, 2Cellos amont others). The service will allow concert goers to mix live music on the fly and download live recorded tracks immediately after the concert.
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Research: Real Estate
Continued buoyancy in H217 has delivered another successful year for Deutsche Grundstücksauktionen (DGA). 2017 saw a double-digit increase in gross turnover comfortably exceed management expectations, while a 7% rise in an already generous dividend would have been significantly greater but for unusually high commission reversals on historic transactions. Positive prospects reflect sustained favourable macro factors and a record start to 2018 thanks to a bumper €15m Berlin auction lot and likely associated payout (surplus cash – DGA has no debt – allows profit to be distributed almost entirely by way of dividend).