Netplay TV continues to see growth in first half 2016

Both new and active depositing players rose 3% to 43,723 and 65,200 from a year ago, respectively. This led to a rise in net revenue by 15% to £14.7m. Adjusted earnings before interest tax depreciation and amortisation (EBITDA) increased 31% to £1.7m and adjusted profits before tax increased 30% to £1.4m.

The company operates a number of online interactive gaming services under a UK remote operating license and Alderney gaming licence, which include SuperCasino.com, Jackpot247.com and Vernons.com. The Group is focused on allowing its players to interact with its games on a variety of platforms including TV, internet, mobile and tablet. Its TV services are available every evening on ITV and Channel 5.

The Group also operates a B2B unit which is a specialist in online digital marketing, product development and technology business.

The company reported that its B2B segment performed above directors' expectations with its “strong” contribution of £2.1m of revenue and £0.4m of adjusted EBITDA.

The group's casino-only brands however experienced slightly lower deposits per customer which led B2C’s average revenue per depositing player to fall by 2% to £267.

Post period-end, the company extended its broadcast relationship with ITV for a further three years and launched the UK’s first Apple TV application which streams the full suite of the company’s live roulette products to television.

The group has also rolled out new content and titles across mobile and desktop platforms, widening the product offering for customers (B2C).

Chief executive Bjarke Larsen said: “We set out our growth strategy at the beginning of the year and are focused on continuing to deliver against this. There has been significant M&A activity in the industry, and the Group, with its solid balance sheet, is well placed to pursue those opportunities that the board believes will be earnings enhancing."

NetPlay finished the period with cash and cash equivalents of £9m after one-off payments in relation to the special dividend declared at the time of the full year 2015 results.

Analyst at Shore Capital Greg Johnson expects further progress in the second half. However, the analyst lowered his full-year EBITDA forecast by £0.11m to £3.21m to reflect a softer second quarter period in gaming. This estimate is broken down into a £3.76m contribution from the B2C division and a £0.70m contribution from the B2B division, partly offset by head office costs of £1.25m. After depreciation, amortisation and interest the analysts forecast continuing profit before tax increasing by 18% to £2.64m. He also expected earnings per share to rise to 0.95p.

“Netplay holds a unique position in the gaming industry with its TV content enabling the group to deliver attractive acquisition costs and player yields. Furthermore, cash generation is robust and the group retains approaching a third of its market capitalisation in cash” Johnson said.

Adjusted earnings per share increased 30% to 0.52p per share and interim dividend was maintained at 0.22p per share.

The share price fell 4.73% to 8.81p at 1006 BST.