(Alliance News) - Music and radio services firm 7digital Group PLC on Monday confirmed it still needs to raise funds, despite welcoming some new investments.
7digital plans a fundraise in this month, saying this is required to stave off insolvency. On Tuesday last week, the firm said shareholders had refused to grant the right to issue shares, which could make raising money on the market difficult.
"It is further noted should the implementation of the company's new strategy take longer than currently expected, growth in revenue is slower, or the company is unable to reduce certain costs as anticipated then it is highly likely the company will be required to raise additional finance during 2020," added 7digital.
Despite the need for funding, 7digital has also welcomed new investors, being a consortium led by Tamir Koch and David Lazarus, who are joining as non-executive chair and non-executive director respectively.
"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," said Chief Executive John Aalbers.
The leadership change saw former chief executive Simon Cole, his deputy Pete Downton, and interim chief financial officer David Holmwood depart in March and April. Last month, Donald Cruickshank departed as chair.
Turning to financials, 7digital posted GBP19.9 million of revenue in 2018, up 19% year-on-year, but its pretax loss widened to GBP12.2 million from GBP5.2 million, after a significant rise in expenses and one-off costs.
"The company remains committed to executing the new strategy and firmly believe 7digital has an excellent platform which, along with a strengthened team and new financing and partnerships, will enable the delivery of 7digital's vision," the firm said.
"On behalf of the board, I would like to thank all of the team here at 7digital for their continued dedication. The company will update shareholders and the market in due course on progress."
Shares were 19% higher on Monday morning at 0.16 pence each.