The online gambling market is growing apace as punters increasingly look for the excitement of a quick flutter without even having to leave the house. But this has led to competition and NetPlay TV (NPT) has felt the consequences. Although the group managed to increase its number of active depositing players in the first half of the 2016 financial year, this 3 per cent growth was way down on the 21 per cent reported in the comparable period of 2015.
Instead, revenue and profit increases in the reported period came predominately from the group's digital marketing and technology business, following the acquisition of Otherside in August 2015. According to management, this new division has performed better than expected and the £2.1m top-line contribution helped to offset the 2 per cent revenue decline in the core gaming division. Tight cost control - including a £0.18m reduction in head office costs to £0.61m - ensured that profitability kept ticking upwards, and the group reported a 31 per cent increase in adjusted cash profits to £1.7m. The highly cash-generative business model saw 88 per cent of that converted into cash.
Broker Shore Capital expects pre-tax profits of £2.6m for the year to December 2016, giving EPS of 0.95p, up from £2.2m and 0.8p in 2015.
NETPLAY TV (NPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 9p | MARKET VALUE: | £25m | |
| TOUCH: | 8.8-9.3p | 12-MONTHHIGH: | 11p | LOW: 7p |
| DIVIDEND YIELD: | 6.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 4.8p* | NET CASH: | £9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 12.7 | 0.24 | 0.09 | 0.22 |
| 2016 | 14.7 | 1.03 | 0.38 | 0.22 |
| % change | +15 | +330 | +322 | - |
Ex-div: 6 Oct Payment: 27 Oct *Includes intangible assets of £8.2m, or 3p a share | ||||
