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Just baffled....11 new licensing customers and 13 contract expansions or extensions bring a 200k increase in revenue and an increased 3.6m operating loss? What is the company doing?
The deal with emusic live promised millions in revenue, but now we know the only revenue 7digital received was for downloads and likely to be minimal, although for some reason they appear to have paid significant advances that look unlikely to be recouped.
The Director loans 500k, but at the same time is forced to announce that emusic.com has been would up following a petition by HMRC.
I've mentally written my investment here off, but hoped at some stage I'd at least get something, I just cannot see how that will ever happen.....
Today I read an article on music business news that Universal has licensed a deal with a Nordic fitness business, maybe this is one of the clients whose deal went from 2021 to 2022? - The Chief Commercial guy left 7dig, maybe someone new has joined? - I'm just guessing though so who knows.
Well there is now certainty with one of two outcomes. Either new signatures come in to generate cash or 7digital use the facility and need to raise more later. I have further concerns that those due to sign won't because of this risk and with inflation like it is interest rates are very likely to start increasing soon.
There are some big challenges here. If you read through the last reports the CEO painted an almost nailed on picture of positive EBITDA, did he not know deals were dependant on labels licensing clients? What guarantees are there that clients will secure licenses in the future, aren't they commercial negotiations that could fail? Even ignoring these points, 7digital are nearly out of cash and are burning millions a year. If they had not drawn down the 1 million loan on 30th June they would have been cash negative. Something needs to happen to stabilise the business I'm going to wait and see.
A very poor set of results, either Langworthy doesn't know what he is doing or is adept at stretching the truth. There are several call outs..
1. Low revenue growth at a time when all the headlines are about music services growing.
2. No cash despite the fundraising and draw down of 1million loan.
3. No business control - a global catalogue they can't do anything with unless licenses are granted to their customers.
It's clear they've been buying business to keep up a news flow, no wonder they never include the figures in RNS's and now it looks like they need to borrow or raise more money to stay in business.
I am trying to find something positive, but can't see anything....
Maybe the artist is paying for it? Not sure it would be that much though. There are others out there doing live streaming much better than emusic, it was a bit of a side step probably driven by events at the time.
The results will tell all. I'm not expecting a miracle, but hopeful that the ship has been steadied. My nervousness is an additional raise and dilution.
Thank you Andy, but don't assume anything, writing or reading comments isn't restricted to those that own shares.
These were the expected results and yet I feel deflated, its the notes that have left me feeling flat. 7digital always seems to say 'next year' but there are some serious flags in here....the tone feels downbeat, the notes suggest more money being required and the biggest surprise is that they highlight fitness as the main revenue driver. I thought that would have been the social media companies, Kuaishou and Triller who have loads of users, so what are these deals actually worth?....I've sold out today on that news, maybe something here in 12 months time, but I really can't see continued share growth between now and then.
Mirriad revenue is up 91%
Burn and loss are down
If you take away any company's cash they will probably go bankrupt
7Digital were apparently operationally profitable in Q4 of 2020 for the first time in about 15 years.
and most importantly Mirriad appear to have released their 2020 financials
No emotions here, just facts and that is what is impacting the sp.
GTS - I think the term used in that RNS is 'expects to report'. It does kind of underline my point though, it would have been nice to see management reiterate that expectation now they have 4 months trading in 2021 under their belt. If you can't give exact figures of deals (and I do understand why they might not), then do the next best thing and give confidence.....
Good to have an RNS but to me it felt downbeat, no talk of profit, only of growth. No talk of renewals on 'improved terms' are they being done on less competitive or the same terms? -
The last statement 'our expectation of a positive outturn in 2021' - This is where I would have liked to have seen profitability mentioned, it just doesn't read like a robust statement.....holding for the moment, but the next statement will be key for me.
It is a positive newsletter, but in my opinion the share price is held back as 7digital's clients operate in such competitive markets, anyone remember Triller? 2020 will be another loss making year and I'd be surprised to see revenue much beyond £6 million and certainly no dividend for the foreseeable future. Saying that it's been a good share to trade the last year, selling on a bump and buying 3 to 4 weeks later on a dip and if you bought in this time last year and are still holding, you really have nothing to complain about....
Fair enough GTS, let's hope there are some positive announcements in between the financials - I'm pretty sure what 2020 will show, but excited about H1 2021.
Goodtosee - how can you be sure there is good news to come?
It's been a bit of time since I've posted here, but todays news is disappointing for 7digital. If the world's biggest label removes a catalogue that 7digital has been supplying to a customer then that must surely have an impact, even if that is only in the incremental fees 7digital charge. The one thing we don't know is why Triller haven't paid Universal, you would assume they would be one of the first companies they paid. Like everyone else I am waiting for 2020 results, I still expect them to show a loss, but hopefully a large amount will have been offset by Q4's profit. I still view 7digital as a 2021 play with a few ups and downs along the way, but hoping for more of the former...
Triller could look to buy 7digital, although as they currently work with Apple Music and others I think that is unlikely. My big concern here is that as 7d grow the labels will ask for a share of their revenue, if this happens and an agreement can't be reached then the label withdraws its catalogue. What, for example, would happen if Universal removed their catalogue? I'd be interested if anyone else sees this as a risk.
Good post ShergarGhost - I must admit yesterday felt like another 'kicking the can' exercise. We were promised a healthy news flow from August, which hasn't happened and now its coming in Q1 2021, this has alway been 7digital's issue, the next big thing is always just around the corner......Turning a profit is a great step, but I ask at what cost - new deals or slashing overheads?...If figures were provided in an update that would in-still a lot more confidence in all levels of investor, until that happens there will be good and bad days, but not sustained share price growth.
Agree Muffin - Triller and Snap Chat would both be good customers - but I read Triller have been hit with a significant lawsuit for unlicensed music by Wixen. Music licensing is a minefield so I'm not surprised. Even more puzzling is that Triller send you to Apple Music - so I can't even work out how 7 fit in or how much business there is.....I guess it alway comes back to releasing the deal values....
It's the flippant comments that provoke poor responses - Oz, why should this be trading at an absolute minimum of 2.20?
A blue day, nice to see....a tighter spread too - looks like an investor took an exit if those two large trades were indeed sells. I didn't think we'd see blue this week, but happy to be wrong.