LONDON (Alliance News) - Digital music and radio services company 7digital Group PLC on Thursday said it expects to post a 3% rise in revenue for the first half as its licensing sales replace revenue from downloaded music sales.
7digital said it expects revenue of GBP5.2 million for the half, but expects technology licensing revenue to rise by around 27% to GBP3.1 million.
The shift in its revenue mix has resulted in an improvement in margins, as the licensing sales are done at higher margins than the downloaded music. It expects its gross margin to rise to more than 60% in the half, up from 49% a year earlier, adding its costs remain in line with its expectations.
The group also has a robust pipeline in place and said it has won a number of new contracts recently, with contracts won in the last three months worth a total of GBP1.9 million to the company.
In a separate statement on Thursday, 7digital also said it has appointed Pete Downton as an executive director. Downton worked for chipmaker Imagination Technologies Group PLC in the past but joined 7digital as chief commercial officer in June last year.
7digital shares were up 11% to 17.11 pence in early trade, one of the best performers in the London Main Market.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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