B2B digital music and radio services company 7digita has issued a trading update for the year ended December 31 2016.
The update shows that the company delivered against the board’s commitment to achieve profitability by the year-end, returning an operating profit for the final quarter. Results for the year are in line with market expectations, including a modest gain from the strength of the US dollar. The board has also outlined its committment to being profitable at operating level for the full year in 2017.
Total group revenue increased by 7.2% to £11.1m, with growth across all revenue streams. The group achieved its target of £1m of annualised cost savings by the year-end.
The cash balance at December 31 2016 was £730,000.
During Q4 2016, 7digital was awarded contracts with a combined value of approximately £1.6m, including set up fees and monthly recurring revenues, with growth coming both from new customer wins and from existing customers. These contracts extend 7digital’s customer base and activity in a number of strategically important sectors, including mobile telco services, radio, high resolution (hi-res) and automotive. The company also signed a further label development deal in the final quarter, meaning that it is now working with all three of the major labels as clients.
7digital CEO Simon Cole commented: “The second half of our financial year 2016 was always an important time for 7digital and I am very pleased that we delivered on our commitment to reach operating profit by the year-end and continued to make good progress in line with our stated strategy.
“The New Year has started well with a particularly strong showing at CES in Las Vegas where the music and audio hardware industries came together to emphasise the importance this year of high quality streaming, one of our key strategic priorities. We remain confident that the Group will be profitable at the operating level for the full year 2017.”
