7digital Group PLC – Results

7digital Group PLC – Results

7digital Group plc (AIM: 7DIG) today announces its audited results for the full year ended 31 December 2018.

2018 highlights: 

  • Group revenue grew by 19% in 2018 to £19.9m (2017 restated: £16.7m)
  • Gross profit increased by 24% to £14.7m
  • Overall gross margin also increased to 74% from 71%
  • Statutory operating loss for 2018 was £12.1m (2017 restated: £5.2m)
  • Adjusted EBITDA loss for 2018 was £2.5m (2017 restated: £1.8m)
  • Group restructured operations closing the French operation and platform 
  • Announced a reduction in headcount of c35% across the UK, Denmark and the US  

Post period events:  

  • Loss of major contract with MediaMarktSaturn with €4m received by the Company as part of settlement Sale of bespoke technology from the Danish business and transfer of staff to TDC Group
  • Key management changes with departure of CEO Simon Cole, Deputy CEO Pete Downton and interim CFO David Holmwood, and appointment of new CEO John Aalbers, and CFO Julia Hubbard
  • Review of the business carried out by new management in April 2019 and announcement of new refocused business strategy to fully capitalise on 7digital’s cloud-based streaming platform
  • On 13 May 2019, Magic acquired outstanding loan notes of £0.6 million and entered into a standstill agreement agreeing not to seek early redemption or conversion of the notes
  • £1.3m raised in June 2019 through a share issue and outstanding £0.6m principal and accrued interest on Convertible Loan Note capitalised, bringing on board a new majority shareholder
  • Board changes announced in June 2019 including departure of Sir Donald Cruickshank as Chairman, Eric Cohen as a Non-Executive Director and the pending appointments of Tamir Koch as Non-Executive Chairman and David Lazarus as a Non-Executive Director

The CEO of 7digital, John Aalbers, stated: “Having arrived at 7digital in April 2019 with Julia Hubbard (CFO) and finding the company facing financial difficulties, we are pleased to have been able to secure excellent new investors in the form of the consortium headed up by Tamir Koch and David Lazarus.”

Aalbers continued: “Tamir and David have an exciting vision for the music industry and see 7digital as playing a key role. As such, they have expressed a strong desire to invest further funds to stabilise the business and enable 7digital to execute its new enterprise strategy.”

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