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7digital Group PLC - COVID-19 Update

RNS Number : 9216K
7digital Group PLC
27 April 2020
 

27 April 2020

7digital Group plc

("7digital" or "the Company")

COVID-19 Update

7digital (AIM:7DIG), the global leader in B2B end-to-end digital music solutions, provides an update on the potential impact of COVID-19 on the Company's operations and the measures it is taking to mitigate the resulting risks. 

 

In the middle of March 2020, in light of the escalating threat from COVID-19, 7digital reacted quickly to prioritise the safety of its workforce and client services. The Company's advanced technology, with increased use of virtualised applications and storage in the cloud, has enabled a seamless and secure transition to remote working with no impact on 7digital's delivery and service capability for clients. 

 

As previously stated, 7digital started 2020 strongly with contract renewals, new contracts signed, and a healthy pipeline. As a result of COVID-19, the Company expects certain new contracts and renewals to shift from Q2 2020 into Q3 or Q4 2020. In response, the Company has implemented a number of cost-saving measures to support the liquidity and financial position of the business including organisational restructuring and securing a short-term rent concession on the Company's leased property. These measures are expected to reduce monthly running costs and generate in-year savings of approximately £750k

 

With respect to previous guidance on mid-year profitability, the Company now expects to achieve operational profitability during the second half of this year. It will continue to adapt quickly to ongoing environmental changes, and the Company is well positioned to further optimise the business model and position 7digital for future growth.

  

Paul Langworthy, Chief Executive Officer of 7digital, said: "COVID-19 is top of mind as we prioritise the health of our workforce and support our customers and partners. We have acted quickly to implement measures to protect our liquidity during the crisis and we are proud of the response of our employees. We are also encouraged that the Company has not lost any customers during this period and has continued to win new business.

 

"The industry is seeing consumers adapt to the new environment by spending more time at home using streaming entertainment, while there is also a rise in music consumed in other formats such as gaming and home fitness. 7digital is well-positioned to benefit and grow from incumbents and new entertainment formats that would leverage music to drive loyalty in their customer base. This strengthens the Board's confidence that the Company is well-positioned to accelerate growth when normal trading resumes. The Company will continue to monitor the situation closely and update the market as appropriate."    

 

 

Enquiries:

 

7digital                                                    

020 7099 7777

Paul Langworthy, CEO  

 

 

 

Arden Partners (Nominated Adviser and Broker)                  

020 7614 5900

Richard Johnson, Benjamin Cryer

 

 

 

Luther Pendragon (Financial PR)                         

020 7618 9100

Harry Chathli, Joe Quinlan, Elliot Fradd  

 

 

 

 

 

 

Notes to Editors:

About 7digital (www.7digital.com/)

7digital is the global leader in B2B end-to-end digital music solutions. The core of its business is the provision of robust and scalable technical infrastructure and extensive global music rights used to create music streaming and radio services for a diverse range of customers - including consumer brands, mobile carriers, broadcasters, automotive systems, record labels and retailers. 7digital also offers radio production and music curation services, editorial strategy and content management expertise.

 

7digital fosters industry growth and innovation by simplifying access to music for clients. From years of being the largest independent producer of programming for the BBC and powering services for partners like Global Radio and Fender, 7digital is perfectly positioned to lead innovation at the intersection of digital music and next-generation radio services.

 

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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Quick facts: 7Digital Group PLC

Price: 0.235

Market: AIM
Market Cap: £5.77 m
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