Interim Results

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 2013.

Highlights

§ 36% increase in net revenue increased £14.2m (H1 2012: £10.4m)

§ 17% increase in EBITDA[*] to £2.7m (H1 2012: £2.3m)

§ Strong cash generation, cash and cash equivalents increasing by £2.6m to £14.9m from £12.3m (H1 2012: £2.6m increase to £10.5m from £7.9m)

§ 47% increase in profit before tax to £2.3m (H1 2012: £1.6m)

§ Interim dividend increased by 20% to 0.18p per share (H1 2012: 0.15p)

§ ITV1 broadcast agreement renewed in April

Casino Key Performance indicators

§ 31% increase in new depositing players to 32,618 (H1 2012: 24,951)

§ 32% increase in average quarterly active depositing players to 29,311 (H1 2012: 22,258)

§ Mobile and tablet now accounting for 28% of total net revenue and 34% of new depositing players (H1 2012: 10% of total net revenue and 18% of new depositing players)

§ New online marketing strategy delivering positive results

Post Period Highlights

§ Continued strong trading in Q3 with average daily net revenue up 17%[†] on the same period last year

§ Full year results expected to be in-line with current market expectations

Commenting on the results and the trading update, Charles Butler, NetPlay TV said:

"I am pleased to announce that following such a strong 2012, the Company's growth trajectory has continued with significant increases in all of the Group's KPIs.

Our investment in mobile and tablet continues to deliver positive results, and accounted for 28% of net revenue during the period. In addition, our accelerated investment in pure online marketing is continuing to have a positive impact. This complements our existing TV marketing and represents the Group's broadened marketing strategy, which underpins both our current and future growth.

The Company continues to perform strongly, and looks forward to exploring further growth opportunities this year and beyond."

Enquiries:

Jonny Franklin-Adams

Jennifer Wyllie

Notes to Editors:

About NetPlayTV plc

NetPlayTV plc is admitted to trading on the AIM market of the London Stock Exchange (NPT). NetPlayTV operates a number of interactive gaming services under an Alderney gaming license, including SuperCasino.com and Jackpot247.com. These services can also be viewed 24 hours a day live on Sky Channel 862, six nights a week on ITV1, and every evening on Channel 5.

The Company is focused on the delivery of a converged interactive gaming experience allowing its players to interact with its games on a variety of platforms, TV, internet, mobile and tablet from a common integrated wallet.

Operational and Financial Review

The Group is pleased to announce 2012's strong growth has continued into 2013. H1 2013 shows a 36% growth in net revenue, 17% growth in EBITDA and 44% growth in basic earnings per share.

The Group has made significant investment during the period into pure online marketing, to complement its expenditure on core TV marketing. This strategy has contributed to a robust set of half year-on-year core KPIs, with a 31% increase in new depositing casino players to 32,618 (H1 2012: 24,948), a 32% increase in average quarterly active depositing players to 29,311 (H1 2012: 22,258) and 36% increase in net revenue to £14.2m (H1 2012: £10.4m).

The Group has diversified its marketing to broaden player reach with pure online marketing[‡] now an integral part of the Group's marketing strategy. During the period it accounted for £1.9m of total marketing expenses, an increase of £1.5m or 377% over the prior year. The new player recruitment costs are higher than the average for the period, however early indications are that due to the targeted nature of this marketing, the player value is also higher than average. This increase in pure online marketing has led to an enlarged player base and has already started to show positive results, with net revenue from these players increasing by 167% during the period.

A new three year broadcast deal with ITV was signed in April. The Jackpot 247 brand is now aired on ITV six nights a week from Monday to Sunday, an increase from four nights a week Monday to Thursday. TV and associated marketing has performed as expected during the period with an increase of 28% to £4.7m leading to a 27% increase in net revenue from these players.

Operating expenses include both variable costs (e.g. software licensing and payment processing fees) and fixed costs of production. Consequently these have only increased by 26% while net revenue has increased by 36%. Administrative expenses have increased by 11% during the period due to an increase in staff and related costs as the Company increases its operational and marketing teams.

Mobile and tablet have performed very strongly in the period, and we are pleased that they now make a significant contribution to the Group accounting for 34% of all new depositing casino players and 28% of net revenue.

The Group continues to be highly cash generative, with net cash generated from operations being £3.1m. The Group now has cash and cash equivalents of £14.9m (H1 2012: £10.5m), which net of player balances of £1.8m (H1 2012: £1.0m) is £13.1m (H1 2012: £9.5m). This is equivalent to 4.5 pence per ordinary share in issue at the 30 June 2013 (3.4 pence per ordinary share in issue at 30 June 2012).

The Board continues to consider geographic expansion and partnership opportunities within the UK and Europe.

Dividend

The Board has approved an increase in its interim dividend of 0.18 pence per ordinary share (H1 2012: 0.15 pence per ordinary share) which will be paid on 17 October 2013 to shareholders on the register on 27 September 2013.

Current Trading and Outlook

The Group is pleased to announce average daily net revenue is up 17% on the same period last year. The exceptionally hot July impacted on player retention and the total number of players was therefore lower, leading to an increase in net revenue of 2% versus July 2012. Average daily net revenue post July has however reverted back to strong growth increasing by 29% on Q3 2012.

The Group's first major sponsorship deal, of Big Brother in June 2013, continues into September with Celebrity Big Brother. This new initiative has already proved very successful in the recruitment of new players, and has helped contribute to average daily new depositing players Q3 to date increasing by 38% on the same period last year.

The Board is pleased with the continued strong performance, and expects full year results to be in-line with current market expectations.

Charles Butler, Chief Executive Officer

Consolidated statement of comprehensive income

for the six months ended 30 June 2013

Consolidated statement of financial position

as at 30 June 2013

Consolidated statement of cash flows

for the six months ended 30 June 2013

Consolidated statement of changes in equity

for the six months ended 30 June 2013

Notes to the interim results

1. Basis of preparation

The financial information for the year ended 31 December 2012 does not constitute the full statutory accounts for that year. The Annual Report and Financial Statements for 2012 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2012 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 9 September 2013. The financial information in this interim report has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2012 and which will form the basis of the 2013 financial statements. A number of new and amended standards have become effective for periods beginning on 1 January 2013, however none of these are expected to materially affect the Group.

Adjustment to prior period comparatives

The Directors have chosen to provide greater clarity and disclosure to the face of the consolidated statement of comprehensive income by modifying the presentational layout. As a consequence, cost of sales has been reanalysed to recategorise player incentives as a deduction from gross income and show separately marketing and operating expenses. Additionally, depreciation, amortisation and share based payments have been shown separately from administrative expenses. Full details of the recategorisation are available in note 1 of the Annual Report and Financial Statements for 2012 which have been filed with the Registrar of Companies.

2. Segmental Information

The Board is the Group's chief operating decision-maker. Management has determined the operating segments based on the information reviewed by the Board for the purposes of allocating resources and assessing performance. The Group has one reportable segment, being the Casino segment. This division consists of all online casino products and ancillary income. The brands operated in this division are SuperCasino.com and Jackpot247.com which are aggregated into one reportable segment. The Bingo Segment was discontinued in February and March 2012.

The Board evaluates performance on the basis of segment EBITDA. This measurement basis excludes head office costs not derived from operations of any segment and are only disclosed in total.

During the year, the Group traded in the UK and Channel Islands (comprising Supercasino.com, Jackpot247.com).

4. Earnings per share

Adjusted earnings per share

The Directors believe that EPS calculated using EBITDA better reflects the underlying performance of the business and assists in providing a clearer view of the performance of the Group. It is also a performance measure used internally to manage the operations of the business.

5. Deferred tax

Deferred income tax assets are recognised for tax loss carry-forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.

6. Property, plant and equipment

7. Goodwill

8. Intangible assets

9. Share capital