Britain’s new 15 per cent Point of Consumption (PoC) tax is bearing down on the industry’s smaller gambling outfits. NetPlay TV (NPT) lost three-fifths of its market value in the second half of 2014, as the new licensing regime loomed closer. But new chief executive Bjarke Larson says the group has "done everything it can" to mitigate the effect of the new duty. Cash profit margins are expected to slip to 12 per cent this year, compared to 18 per cent in 2013.
The new tax has forced NetPlay TV to reevaluate its spending habits. Several "ineffective" marketing contracts were severed last year in an effort to save money. For now, the company has £14m in the bank, which Mr Larson says will help support the dividend, fund product development, and provide flexibility for any acquisition opportunities.
Last week the group extended its partnership with Channel 5. The new contract runs until 2018 and guarantees NetPlay pre-midnight advertising ahead of its post-midnight teleshopping airtime.
Analysts at N+1 Singer expect pre-tax profits of £2.7m this year, giving EPS of 0.9p, down from £3.3m and 1.1p, respectively, in 2014.
| NETPLAY TV (NPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 9.25p | MARKET VALUE: | £ 27m | |
| TOUCH: | 9-9.5p | 12-MONTH HIGH: | 18p | LOW: 6.9p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 5.4p* | NET CASH: | £14m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 19.8 | -14.2 | -6.7 | nil |
| 2011 | 20.7 | 0.6 | 0.2 | nil |
| 2012 | 21.8 | 3.1 | 1.2 | 0.38 |
| 2013 | 28.5 | 4.2 | 1.4 | 0.50 |
| 2014 | 27.4 | 0.1 | -0.03 | 0.55 |
| % change | -4 | -98 | -102 | +10 |
Ex-div: 21 May Payment: 11 Jun *Includes intangible assets of £6.2m, or 2.1p a share | ||||
