Netplay TV (NPT) finals: losses grow but positive
TV based gambling has an image problem but with Netplay they are working hard at overcoming this problem and are gaining traction. I am in two minds about this business and the Netplay TV model but for now let us consider the results:
Final Results [ADVFN]
Highlights
* Revenue for continuing operations increases 61% to £9.4m ( 2006:£5.8m)
* Exceptional growth for "Live Roulette", gross bets increasing by over 400% to
£17.3m for the month of December 07 (December 06:
£3.4m)
* Acquisition of Play Monday database, acquired 18 January 2007
* Acquisition of Abstract Games, acquired 23 February 2007
* Successful launch of "Big Box Bingo" in July 2007
* Investments made in 2007 are now showing excellent results
* Early trading in 2008 very positive, £843,000 EBITDA* in first four months
* April 2008 EBITDA* exceeds £300,000
* EBITDA quoted is before exceptional items and share based payments
Post Balance Sheet Events:
* Agreement with Parlay Entertainment, world's leading bingo software developer, to extend its bingo offering and develop 76 additional web-based games, on 22 January 2008
* Acquisition of 7,600 mobile quiz subscribers from Rubberduck, on 10 March 2008
* Acquisition of Bingos.com, on 17 March 2008
* Acquisition of Sky Channel 848, on 6 May 2008
* Appointment of Nichola Halverson as a Group Finance Director, in March 2008
* Appointment of Dominic Mansour to the Board as a CEO of Bingos.com, in April 2008
It is clear from these highlights that NPT are pursuing an aggressive expansionary policy at the moment. The key is whether one believes in the convergence of the web and TV. Is cross selling really an option here? I suspect that the TV players do not have broadband internet access and this is why they play on TV. Likewise, most online casino players have their accounts all set up and are unlikely to move across to play using a remote control. That said, the "Live roulette" experience makes the process transparent and perhaps more trust worthy.
I cannot help thinking though that the presenters over sell and give the whole channel the feeling of a low budget shopping channel. Clearly this is not putting people off.
The Bingo launch could be the saving grace for NPT.
One concern is the level of losses compared to the amount of cash in hand. This is another company that are cutting it fine and with the "crunch" is full flow raising additional cash may be costly. With £1.4m left and burning through over £2.5m last year things might get very tight in spite of a 400% rise in roulette revenues.
One worth watching.
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