(Alliance News) - 7Digital Group PLC on Friday reported a sharp fall in first half revenue and said it will raise GBP1.9 million through a share subscription.
Shares in the company were 26% higher at 0.23 pence each in London on Friday morning.
The digital music company reported a 65% fall in revenue to GBP5.6 million from GBP9.2 million and a widened pretax loss to GBP2.8 million from GBP2.7 million.
Excluding impairment, restructuring and and professional fee costs, administrative expenses shrunk by 32% to GBP7.5 million from GBP11.0 million. 7Digital said it aimed to simplify the business to cut costs.
During the period, 7Digital lost German consumer electronics retailer MediaMarktSaturn Retail Group as a client, hurting its interim Licensing division revenue.
7Digital reported that it did receive GBP1.0 million from the termination agreement with MediaMarktSaturn however.
Licensing revenue fell by 38% to GBP3.6 million from GBP5.9 million. Including just existing operations and not MediaMarktSaturn, however, Licensing revenue grew by 2.9% to GBP2.5 million from GBP2.4 million.
Content revenue fell by 43% to GBP1.2 million from GP2.1 million and Creative revenue was down 37% to GBP790,000 from GBP1.3 million.
Chief Executive Paul Langworthy said: "It has been a transformational half for the business where we undertook a complete review of the business and its strategy. Having simplified the business and significantly reduced our costs, today's fundraise allows us to move forward and focus on our strategy to fully capitalise on the growth in music streaming.
"We can now move forward with establishing ourselves as a leading global B2B music platform. Looking ahead, our revised core strategy, expected incremental revenue and healthy commercial pipeline mean the board and management look forward to the future with confidence."
The company also unveiled plans to raise GBP1.9 million through a subscription of 937.9 million shares priced at 0.20p each.
Two 7Digital board members, David Lazarus and Tamir Koch, additionally agreed to provide the firm with a GBP1.0 million future credit facility.
The firm noted that Magic Investments SA, a company that Lazarus is also a director of, subscribed to 199.6 million shares as part of the subscription. Shmuel Koch Holdings Ltd, whose directors are Koch's mother and brother, subscribed for 20.8 million shares.
Magic and Shmuel will own 32% and 19% of 7Digital's enlarged share capital, respectively.
Finally, the firm said that Michael Juskiewicz, its finance chief, will join the company's board. Julia Hubbard, the company's former finance chief, has now stepped down from the board after completing the handover period.
7Digital said it intends to appoint a new non-executive director in near future.