Music services company Stingray Digital perks ears for acquisitions
Eric Boyko, right, president of Stingray Digital Group, and co-founder Alexandre Taillefer, try their online karaoke website at the company's headquarters in Montreal Monday, Sept. 8, 2008. (Ryan Remiorz / THE CANADIAN PRESS)
The Canadian Press
Published Wednesday, August 12, 2015 2:26PM EDT
Music services company Stingray Digital Group (TSX:RAY.A) is pushing ahead with a buying spree it hopes will raise its presence on the global market.
Chief executive Eric Boyko told analysts Wednesday that he expects to secure between three and five acquisitions before the end of Stringray's financial year, which wraps up next March.
The move comes after Stingray launched a public offering in early June which has reduced debt and given the company freedom to grow faster.
Going public cost the company in the first quarter, and overall Stingray lost $1.8 million, or five cents per share, in the three months ended June 30. That compared to a profit of $1 million or three cents per share a year earlier.
"For sure we got delayed a bit with the IPO," Boyko said of the growth plan.
It "put us in a bit of a standstill for four months, but quickly after we were surprised how many people started calling us."
Expenses of $5.5 million were booked in the quarter, which included costs from the IPO and payments required to support the music industry.
Stingray offers a variety of digital music services to the retail industry and cable providers.
The company pipes mood-setting music into stores and also curates playlists for Stingray Music, a collection of Canadian cable TV channels formerly known as Galaxie Music.
On an adjusted basis, which filters one-time items, profits increased 33 per cent to $4.8 million, or 12 cents per share, versus $3.6 million or 10 cents per share a year ago.
Revenue grew 27 per cent to $19.9 million, from $15.6 million in the same period last year, as Stingray benefited from recent acquisitions and international growth.
Last month, Stingray bought Brava Group, an operator of three music channels focused on opera, classical music and jazz based in the Netherlands. Stingray plans to bring those Brava channels to the U.S., Canada and Latin America.
"They're very niche and good demographics," Boyko said.
The company also recently partnered with AT&T to provide a lineup of over 100 music channels and a wide selection of music videos to its digital and satellite subscribers.