LONDON (Alliance News) - 7digital Group PLC on Thursday said it was on track to achieve profitability by the end of 2016, with its 2015 results set to meet market expectations despite sales being broadly in line with the previous year, as it announced a contract win with streaming service eMusic.
The company said its revenue for the year to the end of December should be in line with market expectations, and broadly similar to its sales for 2014, when the figure was GBP10.4 million.
7digital said its revenue base had transformed over the year, with a move towards higher margin licensing revenues driving annualised monthly recurring revenues up by 72% to approximately GBP5.8 million, from GBP3.4 million in 2014. However, this was offset by a halving of content revenues to GBP2.0 million.
It said there was a substantial reduction in trading losses.
"We are pleased with the progress made in 2015 - it was a year in which our business model was validated by the growth rate of our recurring licensing revenues. It is clear that, as the market for streamed music and radio services grows, so does 7digital," said Chief Executive Simon Cole.
"We remain on track to achieve profitability by the end of 2016 and look forward to continued growth this year and beyond," he added.
In a separate statement on Thursday, 7digital said it has signed a new contract with eMusic, three months after the streaming platform was acquired by cloud computing company TriPlay.
7digital said it would be providing users of eMusic with added features after a relaunch of the streaming platform, including better search functions and a library of hi-resolution lossless audio. It did not say when the relaunch would take place.
The company said the deal would contribute to its revenue for 2016. No financial details were disclosed on the contract.
Shares in 7digital were up 6.1% to 6.50 pence on Thursday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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