11th Sep 2014 08:18
LONDON (Alliance News) - NetPlay PLC shares dropped on Thursday after the company posted a fall in pretax profit on the back of costs rising across the board, though the group said it expects its full-year results to be in line with market expectations.
The interactive gaming company also appointed a new interim chief executive.
NetPlay shares were down 11% to 10.80 pence in early trade, putting it among the biggest fallers in the AIM All-Share index.
NetPlay's pretax profit in the six months to June 30 fell to GBP1.2 million from GBP2.3 million last year. The fall came in spite of a small uptick in revenue to GBP14.5 million from GBP14.2 million in 2013, as costs for the company increased across the board.
Marketing expenses ticked up to GBP7.1 million, from GBP6.6 million last year, while operating expenses crept up to GBP3.3 million from GBP3.0 million, and administrative expenses rose to GBP1.9 million from GBP1.8 million.
Despite the fall in profit, the group proposed an interim dividend of 0.22 per share, 22% up on the 0.18 pence per share paid last year.
NetPlay said it expects it full-year results to be in line with market expectations and said its third quarter daily net revenue so far is up 6% on the corresponding period last year.
NetPlay said it saw a 24% rise in new depositing players in the first half to 40,585 and said active depositing players increased by 29% to 62,356. Mobile and tablet revenue now accounts for 36% of the group's total net revenue and 39% of its depositing players, it said.
The company also said it has appointed Bjarke Larsen as its interim chief executive, moving from his current position as commercial director. It also said the current CEO, Charles Butler, will become non-executive chairman, following the retirement of Clive Jones.
NetPlay said the first half has been a period of transition for the company, in particular as it makes preparations for incoming point-of-consumption regulation in the UK. Under the new regime, all bets placed online in the UK will be subject to a 15% tax, expected to raise around GBP300 million per year for the Treasury. The changes are subject to a legal challenge by the Gibraltar Betting and Gaming Association, which claims the new rules are "unlawful". NetPlay noted that case is ongoing.
In order to prepare for the changes, NetPlay has been consolidating its overseas locations, aligning its software and commercial contracts to take the tax into account, and is to continue to review further operational consolidation plans in the second half.
"The period has been one of adjustment for the sector as a whole and notwithstanding this, we are pleased to be reporting increased levels of both new depositing players and active depositing players, an illustration of the success of our marketing strategy," said NetPlay Chief Executive Charles Butler.
"We have worked hard during the period in preparing the business for the six months ahead, ensuring it is well positioned post the impending legislative changes," Butler added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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