Online and TV interactive gaming group NetPlay TV PLC (AIM: NPT) has issued an upbeat trading statement, saying it is expecting full-year results to be in line with market expectations. Trading results for the quarter ended 31 March 2010 are also positive and in line with market expectations.
The company has moved to a positive EBITDA of £200,000 for the first quarter of 2010, and confirms it is trading in line with expectations for the year. Gross bets for the period were £166 million, an increase of 5.7 percent over the fourth quarter of 2009, and an increase of 32 percent compared to the third quarter of 2009 – which saw no terrestrial transmission.
The swing to a positive EBITDA is a major step forward and follows a period of heavy investment during the second half of 2009 and into the first quarter of 2010 as NetPlay entered into a number of significant partnerships with UK terrestrial broadcasters. The first quarter of 2010 also saw the company restructure various parts of its business including moving the Supercasino.com brand from the UK to Alderney at the end of February 2010. The full financial benefit of this move will take effect from the second quarter 2010.
As a direct result of entering into partnership deals with STV, and Five, the Company incurred additional TV airtime expenditure of £1.2 million in the fourth quarter of 2009. Due to the materiality of the expense, the directors have written all of this expenditure off in the month it was incurred bringing the accounting treatment in line with IFRS reporting.
It should be noted that due to the strong retention of customers acquired, revenue associated with this expenditure will flow over a period of up to 12 months. The net effect on 2009 reported EBITDA of this treatment, along with certain other non-cash items including foreign exchange losses, is estimated to be approximately £750,000.
“The full financial results of the Company will be announced during the first week of June when we also expect to be able to update the market on the early trading of the ITV1 partnership,” NetPlay added.
NetPlay last month agreed a significant airtime deal for ITV’s (LSE: ITV) night time teleshopping trial window. The six-month airtime trial agreement marks another milestone in its goal of becoming the UK's leading broadcaster of gaming experiences across a broad range of platforms.
NetPlay operates a number of interactive gaming services under UK, Malta and Alderney gaming licenses, including SuperCasino.com, ChallengeJackpot.com and Bingos.com. These services can also be viewed 24 hours a day live on Sky Channel 866 and 867, every evening on the terrestrial channels, Five, and STV, plus Freeview on Virgin 1 at night and Bravo 2 and 24/7 on Virgin Media.