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Regulatory worries strike NetPlay TV

NetPlay TV's shares have slumped to a 12-month low as investors worry about the ability of small gaming companies to cope with impending regulatory change
September 15, 2014

Impending regulatory change has helped shares in online gaming company NetPlay TV (NPT) to fall to a 12-month low. Indeed, former chief executive Charles Butler - who has assumed the role of chairman with immediate effect - hopes the legal challenge mounted by the Gibraltar Betting and Gaming Association against the incoming Gambling (Licensing and Advertising) Act gains "some traction". He reckons "even just delaying" the new legislation would be "positive for the industry".

IC TIP: Buy at 11p

Trading has, however, been good. At the half-year stage the number of new depositing players grew 24 per cent to 40,585 and the total number of active depositing players rose 29 per cent to 62,356. Moreover, from the new customer registrations in the period, almost half signed up through a mobile or tablet device, which in turn generated 36 per cent of total revenues.

Mr Butler said NetPlay TV wouldn't be drawn into the promotional "bidding war" raging between gambling operators as they try to recruit new customers. The group's marketing spend did grow 6 per cent, but Mr Butler said sophisticated analysis of customer behaviour would influence future advertising plans.

Broker N+1 Singer anticipates flat adjusted earnings during 2014: pre-tax profits of £4.9m, giving EPS of 1.6p.

NETPLAY TV (NPT)
ORD PRICE:11pMARKET VALUE:£33m
TOUCH:11-12p12-MONTH HIGH:24pLOW: 11p
DIVIDEND YIELD:4.9%PE RATIO:11
NET ASSET VALUE:6p*NET CASH:£14m

Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201314.22.30.820.18
201414.51.20.400.22
% change+2-48-51+22

Ex-div: 24 Sep

Payment: 23 Oct

*Includes intangible assets of £7.9m, or 3p a share