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Not quite. Licensing revenue is only 54% of the total revenue. The other 46% is from declining business units.
So the growth on licensing revenue is on £3.8m not £6.7.
These guys will spin a story based on a small positive fact whilst ignoring all the negatives and hope you won’t notice. That’s the 7dig way.
Speaks for itself…
“As discussed in note 1 to the financial statements, the Board of Directors of 7digital consider the Company to be a going concern, but acknowledge there to be a material uncertainty relating to going concern. The independent auditors' report is not modified in respect of this matter. The financial statements do not include any adjustments that would result if the Company were unable to continue as a going concern. For further details, refer to the 'Going Concern' section in note 1 to the financial statements.”
Brilliant news. This deal proves a number of things about Cordel: the technology works, the value being delivered is high and warrants significant sums of revenue, it is a genuine SAAS solution, the partner model works and the product fits the market. I am now quite optimistic about where this company goes next. Selling into companies like Network Rail typically has a long sales cycle (12 months + ) from a standing start. We can reasonably expect other deals with similar sales cycles to be coming to fruition in the coming months. A similar size contract from the US would be a very strong buying signal for me.
Its a bit of a worry if winning a deal with one of the largest customers they will ever win has such a measly impact on the share price. With 760 Million active monthly users in China, Kuaishou should really be moving the needle big time for 7Dig here. Unless it is yet another poorly structured deal that has 7Dig delivering lots of value for tiny money, like many of their other customers. How many customers like Kuaishou are out there for 7Dig to win? Maybe a handful or two at the very best.
Tik Tok used to be a 7dig customer but apparently did not renew. 7dig claim that the Triller situation is not going to have an impact on them financially. This seems to confirm that 7dig make no money from the music itself, just from a flat subscription delivery fee for the music (they are the courier company not the Amazon). 7dig is also meant to track the usage of the music, so if universal are claiming Triller have not paid for all the music consumed, then perhaps 7dig has screwed up and has some liability. Hard to know for sure, but seems this a risk worth considering.
F4F, tiktok used to be a customer, but they seem to have lost them as they are no longer listed anywhere.and never mentioned any more.
It’s easy to be the healthiest you’ve been when you’ve had the plague, AIDS, diphtheria and typhoid for years. What’s going on is big hype about small deals. People are not fooled by these people any more.
Spot on. I see that all the people who were felating themselves on here yesterday are very quiet today! Nothing particularly exciting once you wade through the typical overhyping of an inexperienced CEO. The company has been decimated to a very low revenue level and are focussed on cutting loads of cost to break even on low revenue These are not the characteristics of a high growth tech company. Even at 50 to 100% growth next year as highlighted, it will take years for the revenues to get back to where they once were. Is that all that Triller offers this company? At that rate the market cap is far too high as it stands today. Paul did a lot of self congratulating but said little to excite me. The market seems to feel the same way.
Ah yes. It’s the 10th. My apologies. Thanks for the correction.
So, tomorrow is the big day. Finally, an update. We know these guys are big over-hypers, so we need to filter the BS out of what they say and look for col, hard facts. I so hope they tell us something substantial. Was reading today what a flop the crypto currency that e-music launched has been. E-music are the owners of 7dig so I look at what they are doing to see if there is credibility. Unfortunately not! I remain positive though. If we hear about concrete deals and concrete deal sizes rather than vague waffle about healthy pipeline and such nonsense, then I will be happy.
Well, I just hope you all have your BS ear filters on when you listen to Paul at the AGM. Paul is just the continuation of Simon Cole, the master BS-er who totally misled investors about the state of the company in the days leading up to his departure. Go back and read the RNSs. Paul was COO when the company was run into the ground, so why would we think things will be any better now. I even saw that Simon Cole still lists himself as an advisor to the company!! We should all be worried about that. Anyway, expect a load of hype about what they are going to do and little substance about real deals and how they translate to revenue. I hope someone asks them if they will need to raise more cash in 2021? Their reported numbers suggest they will even if they have reached break even.
Definitely a punt. Nothing in this company’s long history suggests it is capable of generating cash. Always in trouble and having to raise more. With revenues dropping every 6 months, it is not an investment, it is a gamble. A gamble that somebody else’s business will be successful and they can pick up some crumbs in the process. Not convinced that their contracts have an interesting level of upside when a Triller or someone else takes off. Company needs to tell us what their monetization model is. How much will they make if Triller has 10 million users using a small portion of a song. I fear it may be peanuts, because 7dig does not own the music rights and are only delivering a portion of the song. Nobody gets paid if you listen to less than 30 seconds of a song on Spotify.
Funds4future. Their last financial report was only 42 days ago. The balance sheet shows their trade payables are £8.1M and receivables are only £1.2M. They only have £4.3m of the £6m left. So how do they pay their trade payables given the business is generating minimal cash? The fundamentals of this business are terrible. This is a purely speculative bet that they may win a massive deal that will generate multiple millions quickly and they need it soon. Otherwise expect more hype and another fundraise once their suppliers get tired of carrying them. I bet the results were delayed this year because the auditors did not see it as a going concern. They needed to complete a fundraise or it would not have passed the audit.
This company is nothing but smoke and mirrors. Board and CEO hyped up a bunch of trivial deals to bs their way to raise yet another £6m (on the back of tens of millions of pounds previously squandered). They will need to raise again within 12 months if not sooner. (Compare their accounts payable to their accounts receivable in the interim report if you don’t believe me). A bunch of crooks if you ask for my opinion.
Reaching breakeven is not that meaningful if your revenues continue to decline. 7Dig's revenue has been declining in every 6 month period for as far back as you want to look. There is lots of evidence in the numbers that their customer churn rate is high. No point winning a customer and losing them again within a couple of years as the biggest expense is upfront in onboarding them. This company is a carefully constructed mirage. A concrete and substantial customer win announcement in which the company is transparent about the value of the revenue it will generate from the deal is the only way to restore investor confidence. These guys now have a reputation for sleight of hand. Time to get real.
They had to. They had run out of cash again.
I think you are spot on. I would go even further and suggest it could be blatant market manipulation. I think they should be investigated by AIM. In my opinion, it looks like they delayed reporting their poor numbers by 3 months, so they could over hype a few small, vague deals and then sucker a few institutional investors to cough up funds without having to give them the true picture. All the while, they knew they were about to release poor results - falling revenue (even in the streaming part of their business) and only £ 1.2 million in trade receivables whilst owing £ 8.1 million In trade payables. Even with the fundraise, this is not a financially secure company. This makes me angry and I would like to see them investigated.
I'm worried about the concentrated hype leading up to fund raise and then the fizzle. Itye, your worry, is my worry too. Paul was Simon Cole's protege. Simon was a big talker with disastrous results. I just hope Paul is not cut from the same cloth.
They raised £6 million in cash in early September and in their interim report showed this was already down to £4.3 million by 20 September 2020 a few weeks later. Looking at their recent balance sheet, their trade payables are £8.1M and receivables are only £1.2M. This is even worse than the 2019 end of year balance of £7M and $1.6M respectively. If they paid their bills they would be out of cash again!
7Dig remains a very risky prospect, in a market that has never proven itself to be of any great size. Even if Triller becomes huge, it is difficult to see how that will generate much revenue for 7Dig. With downward pressure on their download and creative revenues, it is hard to see how the revenues will start growing again any time soon. I bought in very high so I am stuck, so can only hope for a miracle.
Paul Langworthy recently did an interview for LSE in which he stated that 7Dig help facilitate their customers to reach a licencing deal with the labels. This implies that the music deals are direct between the enterprises and the labels. This is important because it seems to mean 7digital does not participate in a share of the music revenue. In which case, 7dig is only paid a delivery fee for the streamed music which is going to be much, much less interesting. Maybe the company could clarify this point? Streaming, by all accounts, is a technically simple process to implement and hence the value it generates is limited. This is very different to a Spotify who make money from sharing in the value of the music itself. Paul Langworthy also talked about moving to the cloud. Storing and accessing 85M files in Amazon, or wherever, is costly and eats into the margins of the service. I would question his claim on that call that margins are at 95%.
7Dig never disclose deal sizes and hide behind customer confidentiality clauses. I believe AIM rules dictate that information that could materially impact the share price must be disclosed and that trumps confidentiality clauses. A large deal would be materially impacting on the share price and needs to be disclosed. So, one can only conclude that these are all small deals, which is further evidenced by the low average deal size calculations above.
In my opinion, they hyped up the share price last month by making a big deal about Triller, the unnamed global tech company, and a pending fitness company in the lead up to the fund raise. They are good at this, but sometimes you have to look behind the curtains to see the reality. From the interim report, it appears they had run out of cash again and cleverly timed it to suck more out of the investment community before this was disclosed. As a long term 7dig investor, I am used to these kinds of sucker punches.
What they have done well is to cut back their costs aggressively. This started with the turnaround CEO and CFO that came in briefly last year to save the company or put it into administration (they offloaded loss-making assets and then found and sold the business to new investors). The cost saving work has been continued by Paul Langworthy. I think he has done a good job with this. They have gotten their costs in good shape and that is important, but the problem is on the revenue side. They have not arrested the continuing drop in revenues yet (in all three parts of the business and most worryingly the Streaming business). They are winning some small deals but they must still be losing other customers also or their revenue would be increasing, and of course they will not put that in a press release.
They raised £6 million in cash in early September and in their interim report showed this was already down to £4.3 million by 20 September 2020 a few weeks later. Looking at their recent balance sheet, their trade payables are £8.1M and receivables ar