Music streaming software specialist 7Digital PLC (LON:7DIG) surged higher as it forecast a bounce back into profit this year.

Results in 2019 will meet expectations, but 2020 will see the full benefit of new contracts and renewals and a widespread restructuring that has seen £7mln of costs taken out.

Guitar manufacturer Fender, for example, has signed up the group for the launch of Fender Songs while record giant Universal Music and social media app Triller continue to use its music-as-a-service.

Revenues from 7digital's direct-to-consumer content have also been stable, due to increasing demand for Hi-Res tracks.

As a result, 7Digital now expects to be running an operational profit by the end of the first half of this year.

Paul Langworthy, chief executive, said: "By combining our global catalogue with our cloud-based flexible technology platform, we continue to enable music industry innovators to reach new digital music consumers as well as target enterprise clients that want to better promote customer engagement and reduce churn.

“A substantially improved financial position, healthy pipeline, client renewals, and rigorous operational management, gives me confidence that 7digital is well-positioned to execute on our strategy and continue to lead the growth of music streaming."

Shares jumped 27% to 0.21p.