The key question to ask NetPlay and other offshore betting companies is how the introduction of a possible 15 per cent UK tax on remote betting in December 2014 will affect them. NetPlay seems to be in a strong position. It has dug itself out of a hole of losses and reckons costs can be cut further when the tax comes in. The company also has the cash firepower to raise marketing spend at that point while some rivals may have to cut back.
NetPlay has abandoned TV bingo, which caused a big write-down in 2010-11, to concentrate on gambling in the wee small hours. Its principal source of revenue is providing Super Casino games (principally roulette) on Channel 5 seven days a week between midnight and 4am. Last October NetPlay signed a new five-year contract with the broadcaster. The rest of the income comes from Sky and Freeview channels, but at the end of April the company signed a new deal with ITV for a more interactive roulette game.
NetPlay’s return to profits last year was based on a dramatic cut in administration expenses. On a like-for-like basis they fell from £6m to £3.7m, of which £1.7m came from salary cuts.
Post results, broker Singer forecasts current year EPS of 0.9p based on revenues of £23.5m (£20.6m last year excluding bingo).
NETPLAY TV (NPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 9.5p | MARKET VALUE: | £ 26.9m | |
| TOUCH: | 9.25-9.75p | 12-MONTH HIGH: | 9.75p | LOW: 8.375p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 41 | |
| NET ASSET VALUE: | 4p* | NET CASH: | £7.94m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 9.1 | -4.35 | -4.35 | nil |
| 2008 | 19.8 | -0.99 | -1.13 | nil |
| 2009 | 18.5 | -8.40 | -5.54 | nil |
| 2010 | 19.8 | -14.23 | -6.73 | nil |
| 2011 | 22.3 | 0.64 | 0.23 | nil |
| % change | +13 | - | - | - |
Aim: Casinos and gaming *Including intangibles of £5.77m, or 2p a share | ||||
