1 Aug 2011 07:00
Date: | 1 August 2011 |
On behalf of: | NetPlay TV plc ('the Company', 'the Group' or 'NetPlay') |
Embargoed until: | 0700hrs |
NetPlay TV plc
Interim Results
NetPlay TV plc (AIM: NPT), the interactive gaming company, announces its interim results for the six months ending 30 June 2011.
Financial Highlights
- Total revenues in line at £10.59m (H1 2010: £10.59m)
- EBITDA of £1.69m (H1 2010 £(0.84)m)
- Profit before tax of £0.37m (H1 2010 £(9.8)m)
- Positive cash flow during the period of £0.46m (H1 2010 £(5.29)m)
Casino Key Performance Indicators
- Total Casino revenues up 10.7% to £9.81m (H1 2010: £8.86m)
- Active casino players up 13.9% to 35,689 (H1 2010 31,338)
- New casino signups up 20.4% to 40,134 (H1 2010 33,345)
- Continued strong trading in July with KPI's significantly ahead of July 2010.
Commenting on the results and the trading update, Clive Jones, NetPlay TV's Non Executive Chairman, said:
"We are very pleased to report a strong first half. The return to profitability, cash generation and growth in our KPIs are a clear illustration of the benefits the restructuring has brought, and is a testament to the strength of the team that we now have in place.
"We are looking to the future with confidence and continue to explore opportunities to leverage our industry expertise and TV production facilities to facilitate further expansion in both the UK and overseas."
Enquiries:
NetPlayTV plc | www.NetPlayTV.plc.uk |
Charles Butler, Chief Executive Officer | Via Redleaf |
| |
Redleaf Polhill | Tel: 020 7566 6720 |
Emma Kane / Rebecca Sanders-Hewett / Jenny Bahr | NetPlayTV@redleafpr.com |
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Panmure Gordon | |
Katherine Roe | Tel: 020 7459 3600 |
Notes to Editors:
About NetPlayTV plc
NetPlay TV plc is listed on the AIM market of the London Stock Exchange (NPT). NetPlay TV operates a number of interactive gaming services under an Alderney gaming license, including Supercasino.com, ChallengeJackpot.com and Bingos.co.uk. These services can also be viewed 24 hours a day live on Sky Channel 866, every evening on FIVE, and 6 nights a week on ITV1.
The Group is focused on the delivery of a converged interactive gaming experience allowing its customers to interact with its games on a variety of platforms, TV, Internet and mobile from a common integrated wallet.
Operational Review
The first half of 2011 has performed very well and this is the first period that incorporates the full impact of the restructuring carried out in 2010, including the renewed focus on the Group's core live casino offering. This strategy has been beneficial for the Group, producing a strong set of KPIs which are all significantly up on 2010. This has also meant that the Group has returned to profitability and is cash flow positive.
The Group's KPIs have are an important business measure and have seen significant increases in both active casino players and new customer sign-ups. Customer acquisitions through TV continue to perform well, and, at the same time, the Group is continuing to drive direct online customer acquisitions and customers through the iPhone application. This strategy is proving to work well.
Casino revenue over the period increased 10.7%, with gross margins increasing to 32.6% versus 20.5% for H1 2010, and 16.2% for the full year 2010. This increase is partly due to certain loss making TV distribution contracts being terminated as part of the restructuring in 2010. The Group has also delivered EBITDA of £1.69m for the period representing a 16% margin.
At the end of the half year the Group's cash position stands at £6.04m (H1 2010 £4.83m).
During the period the cash position increased by £0.46m to £6.04m (H1 2010: £(5.29)m to £4.83m). This increase is after taking into account cash payments of £0.87m in relation to 2010 exceptional items relating to the Group restructuring. At 30 June 2011 there is a balance remaining of £0.31m to clear all creditor balances in relation to these 2010 exceptional items.
Current Trading & Outlook
The second half of the year has started well with July revenue significantly ahead of July last year. The Group continues to see the benefits of the restructuring and focus on the core live casino product with strong KPIs and continued investment in effective marketing.
We are continuing to see further benefits from the iPhone application and look forward to the further customer acquisitions that our new iPad application will afford.
With the UK casino business now performing well, the Group is exploring opportunities for geographical expansion in Italy and potentially other territories such as Spain and the Netherlands pending legislation and a workable tax regime. This will allow the Group to leverage on its existing knowledge, cost base and TV production facilities.
The Group believes that with this continued performance expected in the second half, a strong set of results will be achieved for the full year.
Charles Butler, Chief Executive Officer
Consolidated statement of comprehensive income
for the six months ended 30 June 2011
6 months ended 30 June 2011 | 6 months ended 30 June 2010 | Year ended 31 December 2010 | ||||
£ 000's | £ 000's | £ 000's | ||||
Note | Unaudited | Unaudited | Audited | |||
Restated | ||||||
Revenue | 10,593 | 10,590 | 19,807 | |||
Cost of sales | (7,136) | (8,419) | (16,590) | |||
Gross profit | 3,457 | 2,171 | 3,217 | |||
Administrative expenses | (3,088) | (12,331) | (17,438) | |||
Operating profit/(loss) | 369 | (10,160) | (14,221) | |||
EBITDA | 1,685 | (841) | (2,779) | |||
Depreciation of property, plant & equipment | (460) | (430) | (877) | |||
Amortisation of intangible assets | (710) | (1,230) | (2,179) | |||
Impairment of goodwill | - | - | (97) | |||
Impairment of other intangible assets | - | (3,637) | (4,668) | |||
Exceptional items | - | (3,855) | (3,211) | |||
Share based payments | (146) | (167) | (410) | |||
Operating profit/(loss) | 369 | (10,160) | (14,221) | |||
Finance income | 1 | 1 | 19 | |||
Finance costs | (6) | (12) | (24) | |||
Profit/(loss) before taxation | 364 | (10,171) | (14,226) | |||
Income tax expense | - | 303 | 414 | |||
Profit/(loss) from continuing operations | 364 | (9,868) | (13,812) | |||
Profit from discontinued operations | 3 | - | 51 | 104 | ||
Profit/(loss) after tax | 364 | (9,817) | (13,708) | |||
Other comprehensive income: | ||||||
Foreign exchange arising on consolidation | 4 | 105 | 49 | |||
Other comprehensive income, net of tax | 4 | 105 | 49 | |||
Total comprehensive income | 368 | (9,712) | (13,659) | |||
Basic earnings/(loss) per share | ||||||
From continuing operations (p) | 5 | 0.13 | (4.68) | (6.73) | ||
From discontinued operations (p) | 5 | - | 0.03 | 0.05 |
Diluted earnings/(loss) per share | ||||||
From continuing operations (p) | 5 | 0.12 | (4.68) | (6.73) | ||
From discontinued operations (p) | 5 | - | 0.03 | 0.05 |
Consolidated statement of financial position
as at 30 June 2011
As at 30 June 2011 | As at 30 June 2010 | As at 31 Dec 2010 | ||||
£ 000's | £ 000's | £ 000's | ||||
Unaudited | Unaudited | Audited | ||||
Restated | ||||||
Non-current assets | ||||||
Property, plant and equipment | 1,396 | 2,342 | 1,790 | |||
Goodwill | 3,617 | 3,690 | 3,617 | |||
Other intangible assets | 2,532 | 5,199 | 3,174 | |||
Trade and other receivables | 141 | - | 141 | |||
Total non-current assets | 7,686 | 11,231 | 8,722 | |||
Current assets | ||||||
Investments held for resale | - | 88 | - | |||
Trade and other receivables | 762 | 2,277 | 649 | |||
Current tax recoverable | - | 10 | - | |||
Cash and cash equivalents | 6,036 | 4,916 | 5,580 | |||
Total current assets | 6,798 | 7,291 | 6,229 | |||
Total assets | 14,484 | 18,522 | 14,951 | |||
Equity | ||||||
Share capital | 10,653 | 9,820 | 10,653 | |||
Share premium | 22,838 | 21,258 | 22,838 | |||
Merger reserve | 1,088 | 1,317 | 1,317 | |||
Other reserves | 675 | 1,487 | 606 | |||
Retained earnings | (25,477) | (23,332) | (26,151) | |||
Total equity | 9,777 | 10,550 | 9,263 | |||
Non-current liabilities | ||||||
Borrowings | - | 5 | - | |||
Total non-current liabilities | - | 5 | - | |||
Current liabilities | ||||||
Trade and other payables | 4,679 | 7,796 | 5,516 | |||
Borrowings | 7 | 171 | 43 | |||
Provisions | 21 | - | 129 | |||
Total current liabilities | 4,707 | 7,967 | 5,688 | |||
Total equity and liabilities | 14,484 | 18,522 | 14,951 |
Consolidated statement of cash flows
for the six months ended 30 June 2011
6 months ended 30 June 2011 | 6 months ended 30 June 2010 | Year ended 31 December 2010 | |||
£ 000's | £ 000's | £ 000's | |||
Unaudited | Unaudited | Audited | |||
Restated | |||||
Cash flows from operating activities | |||||
Profit/(loss) for the period | 364 | (9,817) | (13,708) | ||
Adjustments for: | |||||
Depreciation and amortisation | 1,170 | 1,684 | 3,103 | ||
Impairment of goodwill and other intangible assets | - | 3,637 | 4,765 | ||
Share based payments and similar | 146 | 167 | 410 | ||
Foreign exchange differences | 5 | 108 | 136 | ||
Loss on disposal of property, plant and equipment | - | - | 101 | ||
Profit on disposal of discontinued operation | - | - | (101) | ||
Finance income | (1) | (1) | (19) | ||
Finance costs | 6 | 12 | 24 | ||
Income tax credit | - | (303) | (414) | ||
(Increase)/decrease in trade and other receivables | (113) | 1,575 | 3,062 | ||
(Decrease)/increase in trade and other payables | (769) | 1,014 | (667) | ||
Decrease in provisions | (108) | - | (468) | ||
Cash from/(used) in operations | 700 | (1,924) | (3,776) | ||
Income taxes received | - | - | 128 | ||
Net cash from/(used in) operating activities | 700 | (1,924) | (3,648) | ||
Cash flows from investing activities | |||||
Acquisition of subsidiary undertakings | - | (88) | - | ||
Purchase of property, plant and equipment | (28) | (1,348) | (1,390) | ||
Purchase of intangible assets | (175) | (1,492) | (1,510) | ||
Disposal of discontinued operations | - | - | 119 | ||
Interest received | 1 | 1 | 19 | ||
Net cash used in investing activities | (202) | (2,927) | (2,762) | ||
Cash flows from financing activities | |||||
Net proceeds from issuance of ordinary shares | - | 28 | 2,441 | ||
Cash paid to revoke share options in the Company | - | (350) | (350) | ||
Interest paid | (6) | (12) | (24) | ||
Repayment of borrowings | (36) | (103) | (195) | ||
Net cash (used in)/from financing activities | (42) | (437) | 1,872 | ||
Net increase/(decrease) in cash | 456 | (5,288) | (4,538) | ||
Cash & cash equivalents at beginning of period | 5,580 | 10,118 | 10,118 | ||
Cash & cash equivalents at end of period | 6,036 | 4,830 | 5,580 | ||
Consolidated statement of changes in equity
for the six months ended 30 June 2011
Share capital | Share premium | Merger reserve | Other reserves | Retained earnings | Total | |
£ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | |
Restated as at 1 January 2010 | 9,811 | 21,239 | 1,317 | 2,173 | (14,123) | 20,417 |
Shares issued for: | ||||||
Employee share options | 9 | 19 | - | - | - | 28 |
Share options lapsed, exercised or cancelled | - | - | - | (608) | 608 | - |
Options revoked for cash consideration | - | - | - | (350) | - | (350) |
Share based payments charge in period | - | - | - | 167 | - | 167 |
Loss for the period | - | - | - | - | (9,817) | (9,817) |
Other comprehensive income | - | - | - | 105 | - | 105 |
As at 30 June 2010 | 9,820 | 21,258 | 1,317 | 1,487 | (23,332) | 10,550 |
Shares issued for: | ||||||
Cash | 833 | 1,667 | - | - | - | 2,500 |
Cost of issuing shares | - | (87) | - | - | - | (87) |
Share options lapsed, exercised or cancelled | - | - | - | (1,068) | 1,072 | 4 |
Share based payments charge in period | - | - | - | 243 | - | 243 |
Loss for the period | - | - | - | - | (3,891) | (3,891) |
Other comprehensive income | - | - | - | (56) | - | (56) |
As at 31 December 2010 | 10,653 | 22,838 | 1,317 | 606 | (26,151) | 9,263 |
Disposal of investments | - | - | (229) | - | 229 | - |
Share based payments charge in period | - | - | - | 146 | - | 146 |
Share options lapsed, exercised or cancelled | - | - | - | (81) | 81 | - |
Profit for the period | - | - | - | - | 364 | 364 |
Other comprehensive income | - | - | - | 4 | - | 4 |
As at 30 June 2011 | 10,653 | 22,838 | 1,088 | 675 | (25,477) | 9,777 |
Notes to the interim results
1. Basis of preparation
The financial information for the year ended 31 December 2010 does not constitute the full statutory accounts for that year. The Annual Report and Financial Statements for 2010 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2010 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
This interim report, which has neither been audited nor reviewed by independent auditors, was approved by the board of directors on 29 July 2011 and has been prepared under International Financial Reporting Standards (IFRS).
2. Restatement of comparatives
The comparative information included within this interim report in respect of the period ending 30 June 2010 has been restated as follows:
(i) When preparing the 2010 annual report the directors took the decision to amend the accounting treatment of the Challenge Jackpot acquisition, which took place in May 2009. Notes 1 and 14 of the 2010 consolidated financial statements include detailed information about the restatement. The table below gives an overview of the effect that the restatement has had on the interim report for the six months ending 30 June 2010.
(ii) The balance sheet as at 30 June 2010 has been restated to include a foreign exchange reserve, which is included within other reserves.
(iii) In 2010 the Mobile segment was discontinued. The financial statements for the year ending 31 December 2010 include Mobile trading as a discontinued operation. The interim report for the period ending 30 June 2010 have been restated to be consistent in this treatment. Note 3 includes more details of the discontinued operations.
2010 interim report extract | Challenge Jackpot restatement | Foreign exchange reserve restatement | Restated 2010 interim comparatives | |
£ 000's | £ 000's | £ 000's | £ 000's | |
Statement of financial position | ||||
Intangible assets | 5,685 | (486) | - | 5,199 |
Goodwill | 2,640 | 1,050 | - | 3,690 |
Share premium | 21,039 | 219 | - | 21,258 |
Retained earnings | (22,358) | (845) | (129) | (22,332) |
Share based payments reserve | 173 | 1,190 | - | 1,363 |
Foreign exchange reserve | - | - | 129 | 129 |
Statement of comprehensive income | ||||
Administrative expenses: | ||||
Impairment | (1,971) | (1,666) | - | (3,637) |
Amortisation | (1,227) | (3) | - | (1,230) |
Share based payments charge | 385 | (552) | - | (167) |
Taxation | 11 | 292 | - | 303 |
| ||||
Loss for the period | (7,888) | (1,929) | - | (9,817) |
The effect on the cash flow of the Challenge Jackpot transaction on the restatement on the 2010 financial statements has been to increase net cash from operations by £350,000 and to reduce cash flows from financing activities by the same amount.
3. Discontinued operations
On 26 November 2010, the Group disposed of the 'Lucky Numbers' and 'Grab a Grand' SMS-based subscription services for initial cash consideration of £100,000 and contingent cash consideration of up to £50,000 dependent on performance conditions. At the reporting date £19,000 of the contingent consideration had accrued.
As a result of the above transaction, discontinued operations comprise the 'Mobile' business segment as reported in past Annual Reports.
The following table shows how the result for the discontinued operations is derived:
Period ending 30 June 2011 | Period ending 30 June 2010 | Year ending 31 December 2010 | |
£ 000's | £ 000's | £ 000's | |
Revenue | - | 720 | 918 |
Cost of sales | - | (545) | (696) |
Administrative expenses | - | (100) | (172) |
Depreciation and amortisation | - | (24) | (47) |
Gain from sale of discontinued operations after tax | - | - | 101 |
Profit for the period | - | 51 | 104 |
4. Segmental Information
The Group has reportable segments as follows:
·; Casino - this division consists of online casino products. The brands operated in this division are Supercasino and Challenge Jackpot which are aggregated into one reportable segment.
·; Bingo - this division runs a number of different online bingo websites operating in the UK and Europe.
·; Mobile - this division was discontinued in 2010 and its results are included within note 3.
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer different products and services. Each segment has its own management team. These divisions are managed separately because each business requires different software technology and marketing strategies.
Measurement of operating segment profit
The Group evaluates performance on the basis of segment EBITDA which is defined as the segment profit or loss excluding segment depreciation and amortisation and non-recurring losses, such as exceptional items, intangible asset impairment, and the effects of share-based payments. Head office costs not derived from operations of any segment and are only disclosed in total.
For the six months ended 30 June 2011 (Unaudited):
| Casino | Bingo | Mobile | Total | |
£ 000's | £ 000's | £ 000's | £ 000's | ||
Income statement items | |||||
Revenue from external customers | 9,806 | 787 | - | 10,593 | |
Other costs | (8,692) | (680) | - | (9,372) | |
Segment profit | 1,114 | 107 | - | 1,221 | |
Head office costs | (706) | ||||
Share based payments | (146) | ||||
Finance income | 1 | ||||
Finance cost | (6) | ||||
Tax | - | ||||
Profit after tax | 364 | ||||
Less discontinued operations | - | ||||
Profit from continuing operations | 364 | ||||
Reconciliation to EBITDA | Casino | Bingo | Subtotal | Mobile | Total |
£ 000's | £ 000's | £ 000's | £ 000's | £ 000's | |
Segment profit | 1,114 | 107 | 1,221 | - | 1,221 |
Depreciation and amortisation | 1,088 | 82 | 1,170 | - | 1,170 |
Segment EBITDA | 2,202 | 189 | 2,391 | - | 2,391 |
Head office costs | (706) | ||||
EBITDA from continuing and discontinued operations | 1,685 | ||||
Less EBITDA from discontinued operations | - | ||||
EBITDA from continuing operations | 1,685 |
For the six months ended 30 June 2010 (Unaudited and restated):
| Casino | Bingo | Mobile | Total | |
£ 000's | £ 000's | £ 000's | £ 000's | ||
Income statement items | |||||
Revenue from external customers | 8,862 | 1,728 | - | 10,590 | |
Other costs | (15,785) | (4,064) | - | (19,849) | |
Discontinued operations | - | - | 51 | 51 | |
Segment (loss)/profit | (6,923) | (2,336) | 51 | (9,208) | |
Head office costs | (734) | ||||
Share based payments | (167) | ||||
Finance income | 1 | ||||
Finance cost | (12) | ||||
Tax | 303 | ||||
Loss after tax | (9,817) | ||||
Less discontinued operations | (51) | ||||
Loss from continuing operations | (9,868) | ||||
Reconciliation to EBITDA | Casino | Bingo | Subtotal | Mobile | Total |
£ 000's | £ 000's | £ 000's | £ 000's | £ 000's | |
Segment loss | (6,923) | (2,336) | (9,259) | 51 | (9,208) |
Depreciation and amortisation | 1,285 | 375 | 1,660 | 24 | 1,684 |
Impairment of assets | 1,953 | 1,684 | 3,637 | - | 3,637 |
Exceptional items | 3,318 | 537 | 3,855 | 25 | 3,880 |
Segment EBITDA | (367) | 260 | (107) | 100 | (7) |
Head office costs | (734) | ||||
EBITDA from continuing and discontinued operations | (741) | ||||
Less EBITDA from discontinued operations | (100) | ||||
EBITDA from continuing operations | (841) |
For the year ended 31 December 2010:
| Casino | Bingo | Mobile | Total | |
£ 000's | £ 000's | £ 000's | £ 000's | ||
Income statement items | |||||
Revenue from external customers | 17,357 | 2,450 | - | 19,807 | |
Other costs | (26,172) | (5,978) | - | (32,150) | |
Discontinued operations | - | - | 104 | 104 | |
Segment (loss)/profit | (8,815) | (3,528) | 104 | (12,239) | |
Head office costs | (1,468) | ||||
Share based payments | (410) | ||||
Finance income | 19 | ||||
Finance cost | (24) | ||||
Tax | 414 | ||||
Loss after tax | (13,708) | ||||
Less discontinued operations | (104) | ||||
Loss from continuing operations | (13,812) | ||||
Reconciliation to EBITDA | Casino | Bingo | Subtotal | Mobile | Total |
£ 000's | £ 000's | £ 000's | £ 000's | £ 000's | |
Segment loss | (8,815) | (3,528) | (12,343) | 104 | (12,239) |
Depreciation and amortisation | 2,772 | 284 | 3,056 | 46 | 3,102 |
Impairment of assets | 1,504 | 3,261 | 4,765 | - | 4,765 |
Exceptional items | 2,896 | 315 | 3,211 | 31 | 3,242 |
Segment EBITDA | (1,643) | 332 | (1,311) | 181 | (1,130) |
Head office costs | (1,468) | ||||
EBITDA from continuing and discontinued operations | (2,598) | ||||
Less EBITDA from discontinued operations | (181) | ||||
EBITDA from continuing operations | (2,779) |
5. Earnings per share
6 months ended 30 June 2011 | 6 months ended 30 June 2010 | Year ended 31 December 2010 | |||
£ 000's | £ 000's | £ 000's | |||
Profit/(loss) attributable to shareholders | |||||
Profit/(loss) after tax from continuing operations | 364 | (9,187) | (13,812) | ||
Profit/(loss) after tax from discontinued operations | - | 51 | 104 | ||
Shares | Shares | Shares | |||
Weighted average numbers of shares in issue | 279,624,716 | 196,210,827 | 205,180,118 | ||
Adjusted weighted average share options | 21,475,197 | Anti-dilutive | Anti-dilutive | ||
Weighted average shares in AESOP | 99,933 | Anti-dilutive | Anti-dilutive | ||
Pence per share | Pence per share | Pence per share | |||
Basic earnings/(loss) per share | |||||
From continuing operations | 0.13 | (4.68) | (6.73) | ||
From discontinued operations | - | 0.03 | 0.05 | ||
Diluted earnings/(loss)per share | |||||
From continuing operations | 0.12 | (4.68) | (6.73) | ||
From discontinued operations | - | 0.03 | 0.05 | ||
Basic loss per share is calculated on the results attributable to ordinary shares divided by the weighted average number of shares in issue during the year excluding those held by the AESOP employee share scheme, which are treated as cancelled.
The effect of the loss for the comparative period was anti-dilutive and so in accordance with IAS 33 the diluted loss per share is equal to the basic loss per share.
6. Share capital
6 months ended 30 June 2011 | 6 months ended 30 June 2010 | Year ended 31 December 2010 | ||
£ 000's | £ 000's | £ 000's |
| |
| ||||
Balance at beginning of period | 10,653 | 9,811 | 9,811 |
|
New shares issued in period | - | 9 | 842 |
|
| ||||
Balance at end of period | 10,653 | 9,820 | 10,653 |
|