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NETPLAYTV TRADING UPDATE POSTED
Saturday October 18,2014 : NETPLAYTV TRADING UPDATE POSTED
Heavy marketing spend brings in the punters but could adversely impact FY results.
Online and interactive television gambling group NetPlayTV has released a Q3-2014 trading update indicating an increase in new players, but noting heavy marketing spend which could impact its full year results.
The report notes:
* 21 percent increase in new depositing players to 18,853 (Q3 2013: 15,566)
* 22 percent increase in active depositing players to 35,225 (Q3 2013: 28,890)
* High level of marketing spend may result in expected full year results sinking below market expectations
* Cash balances GBP 13.4 million at 30 September 2014.
Bjarke Larsen, Interim CEO of the group, says that growth in new depositing players and total depositing players has continued during the quarter, but that revenues remained broadly flat against the same quarter of 2013 (Q3 2014: GBP 6.4 million; Q3 2013: GBP 6.5 million).
"The Group's interim results referred to the widely reported unsustainable level of marketing activity throughout the gaming industry driven by the impending point-of-consumption tax ('POC') in The UK, a trend that has continued into this quarter," Larsen cautioned.
"Despite the Group's level of marketing spend, it has not achieved the targeted levels of new customers and net revenue expected. This situation combined with the current trading environment, and the initiation of POC means that the Board expects current market expectations to be materially lower than forecast.
"Management has conducted a thorough review of its marketing activity and has developed a new strategy designed to deliver improved returns through more cost effective and better targeted marketing spend.
"The Company remains highly cash flow generative and is supported by a strong balance sheet with cash or cash equivalents totalling GBP 13.4 million at 30 September 2014."
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