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7digital shares halve as European retailer MediaMarktSaturn questions arrangements for Juke music service

The AIM-listed company, which has agreements with Juke for some £4mln of revenues in 2019, said MMS has indicated that it may wish to change the current arrangements

Corporate radio
The company also had more bad news in its update, in the form of a hearing for a winding-up petition for its 7digital Trading subsidiary

7digital Group PLC (LON:7DIG) saw its share price halve on Friday after the corporate radio services provider said Juke GmbH, a wholly-owned subsidiary of European retailer MediaMarktSaturn (MMS), had been speaking to it about the future of the Juke music service.

The AIM-listed company, which has agreements with Juke for some £4mln of revenues in 2019, said MMS has indicated that it may wish to change the current arrangements.

READ: 7digital Group reports sharp increase in 2017 revenue

It added that this could involve 7digital taking more responsibility for certain aspects of the service or the service being closed with a resulting termination payment becoming due and payable to the UK group.

The company also had more bad news in its update, in the form of a hearing for a winding-up petition for 7digital Trading, a wholly-owned subsidiary of 7digital.

The petition relates to sums due to the tax-man of around £417,000. The hearing of the petition is listed for 16 January 2019 but 7digital is confident that the full amount due to HMRC will be paid in advance of the hearing.

On the plus side, the company said it had completed the planned platform consolidation and restructuring of the group's operations in the final quarter of 2018, reducing the company's cost base by an annualised £6.2mln.

Several operations and offices have been closed or discontinued and staff numbers have been reduced in all locations.

All of the company's operations have remained stable during the restructuring and the move to a single technology platform for 7digital's customers.

In early afternoon trading, 7Digital shares had plunged by 50% to 0.95p.

Quick facts: 7Digital Group PLC

Price: 0.4144 GBX

AIM:7DIG
Market: AIM
Market Cap: £10.18 m
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