30th Sep 2014 10:55
LONDON (Alliance News) - 7digital Group PLC Tuesday said its losses widened in the first-half, but it is well positioned to capitalise on the rapid growth occurring in the digital music industry.
The digital music and radio services company posted a pretax loss of GBP2.8 million for the six months to June 30, compared with a GBP2.2 million loss a year earlier, as revenue fell to GBP5.1 million from GBP5.7 million.
During the year, the company made share-based payments worth GBP290,000 in addition to booking expectational items totalling GBP315,000.
As a consequence of the reverse acquisition of 7digital Group Inc by UBC Media Group PLC on June 10, the results include six months of the 7digital Group and one month of the UBC Media Group.
The company said as low margin download stores - which 7digital had traditionally provided for its clients - diminish, and these clients and others move to streaming services, it expects to see a positive shift in gross margin with lower revenue but growing gross profit.
7digital Tuesday also said it has signed a new contract with Spanish Broadcasting System to create new music offering including a radio-style streaming service.
Spanish Broadcasting System is an owner and operator of radio stations in the US targeting the US Hispanic community.
As part of the deal, 7digital's platform will be used to power the new service for SBS in the US under their brand La Musica.
Through an online portal and mobile app, LaMusica.com currently streams 14 of SBS' Spanish-language radio stations.
Looking ahead, the company said the enlarged business is now in a strong position to capitalise on the rapid growth occurring in the digital music industry.
"The future success of 7digital will be underpinned by growth in monthly recurring revenues, derived from license fees paid for use of the group's music and radio platform," Chief Executive Simon Cole said in a statement.
"Demand for these services is expected to be driven by a number of factors including an increase in the number of connected devices, new customers coming to market, continued product innovation and international expansion," he added.
7digital shares were quoted down 1.2% at 21.00 pence per share Tuesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
7DIG.L