21 May 2019 10:45
21 May 2019
Cellcast plc
("Cellcast" or the "Company")
Update on overseas consulting services
The Board of Cellcast plc (AIM: CLTV) announces an update on the Company's consulting services to gaming and lottery operators in East Africa. The Company's sole customer for these services is based in Kenya.
As announced in the Company's 2018 annual report, the Company's revenues for its overseas lottery and gaming consultancy services were impacted in 2018 due to the adverse effect of a new taxation rate on the business of the Company's clients in Kenya. This taxation rate was introduced as a result of the Kenyan Government seeking to implement advertising restrictions on the gambling industry.
On 30 April 2019, Kenya's Betting Control and Licensing Board (the "BCLB") issued a notice detailing its plans to drastically curtail its licensees' ability to advertise from 30 May 2019. The planned restrictions impact on outdoor advertising of gambling, gambling adverts on social media, gambling adverts between 6am and 10pm and celebrity endorsement of gambling operations.
The scope of the advertising restrictions have yet to be finalised and, until these are formalised, the potential impact on Cellcast's overseas consulting services is not clear. Moreover, a case filed in the Kenyan High Court arguing against the restrictions has led to the implementation of the planned restrictions being temporarily suspended pending the final determination of this court case. However, the Board of Cellcast believes that there is increasing political opposition in Kenya to the industry as a whole.
Such restrictions, were they to be implemented, could impact Cellcast and the sustainability of its overseas consultancy revenues, as Cellcast provides services, with a focus on Kenya, to clients trading in this sector.
The board of Cellcast will continue to monitor developments in Kenya and any notifications from the BCLB. In the year ended 31 December 2018, the Company reported total revenues of £395,000 from its overseas consultancy services. Further, the Company currently has a trade debtor from its Kenyan client, totalling £453,000.
For further information:
Cellcast plc | |
Craig Gardiner, CEO | Tel: +44 (0) 203 376 9420 |
craig@cellcast.tv
| www.cellcast.tv |
Allenby Capital Limited (Nominated Adviser) | |
Nick Naylor/James Reeve | Tel: +44 (0) 20 3328 5656 |