- H2 step increase in revenues underpinned
H1 results reflect the progress 7digital Group has made over the last year and the initial impact of the transformative 24-7 acquisition, with exit monthly recurring revenues (MRR) up 113%. The step change in revenues forecast in H2 looks underpinned and the integration of 24-7 has started, key to moving to positive cash flow in H218 – a target reiterated by management. We expect this to trigger a re-rating of the shares, which trade on 4.1x FY18e EBITDA, a fraction of its B2B video streaming peers.7Digital Group has three divisions: Content, Licensing and Creative. The Content division includes the sales of digital music downloads by Co. direct to consumers, and one off projects from record labels. Licensing is the core of Co.'s business, providing the platform and rights management personnel through which its business-to-business customers can create their own streamed music services, either standalone or bundled into their device or product offering. Co.'s Creative division is engaged in the creation of audio and video programming for broadcasters, receiving commissions from BBC's national radio networks, commercial radio stations and other broadcasters such as Sky Television.
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