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Netplay TV PLC (NPT)

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Tuesday 15 September, 2015

Netplay TV PLC

Interim Results

RNS Number : 0251Z
Netplay TV PLC
15 September 2015
 

 

Date:

15 September 2015

On behalf of:

NetPlay TV plc ('the Company') along with its subsidiaries (the 'Group' or 'NetPlay' or 'NetPlay TV')

Embargoed until:

0700hrs

 

Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

 

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 2015*:

 

Key Performance Indicators

§ 21% increase in new depositing players to 42,305 (H2 2014: 35,102; H1 2014: 40,585)

§ 13% increase in active depositing players to 63,411 (H2 2014: 56,079; H1 2014: 62,356)

§ Net revenue of £12.7m (H2 2014: £12.9m; H1 2014: £14.5m)

 

Operational Highlights

§ New three year partnership agreement signed with Channel 5/Viacom

§ Succesful implementation of revised marketing strategy

§ Key KPIs remain strong

§ Launched fully responsive SuperCasino site ensuring a consistent user experience across all devices

§ Increased average revenue per active depositing players across the casino-only brands of £273 (H2 2014: £270; H1 2014: £265)

 

Financial Highlights

§ Adjusted EBITDA increased to £1.3m versus prior periods on a like-for-like basis (LFL)§ (H2 LFL 2014: £0.1m; H1 LFL 2014: £0.6m)

§ Betting and gaming duties expense of £1.9m (H2 2014: £0.4m; H1 2014: £0.1m) following the introduction of the UK Point of Consumption (POC) duty

§ Marketing expenditure reduced by 24% to £4.5m (H2 2014: £5.9m; H1 2014: £7.1m) as a result of more efficient expenditure

§ Adjusted profit before tax** of £1.1m (H2 2014: £1.2m; H1 2014: £2.1m) and reported profit before tax of £0.2m (H2 2014: loss of £1.1m; H1 2014: profit of £1.2m)

§ Adjusted earnings per share** of 0.37 pence per share (H2 2014: 0.40 pence per share; H1 2014: 0.70 pence per share)

§ Cash and cash equivalents, increase to £15.8m (H2 2014: £14.2m; H1 2014: £14.3m) with net cash generated from online gaming operations†† of £1.0m (H2 2014: £1.1m; H1 2014: £1.9m)

§ Interim dividend maintained at 0.22 pence per share, ex-dividend date Thursday 1 October 2015

 

Post Period Events

§ Completion of acquisition of Otherside Inc., an specialist online digital marketing, product development and technology company, for a total consideration of £3.2m‡‡

§ Launch of mobile sportsbook product on Vernons.com which is already taking in excess of 50% of all sportbook bets

 

Commenting on the results and the trading update, Bjarke Larsen, CEO of NetPlay TV said:

 

"We are very pleased to report our decisive action at the end of 2014 has delivered such a positive outcome with all of our KPIs holding strong. In a post POC market, our strategy to focus on TV-led customer acquisition, supported by digital marketing, has proved successful.

 

"We're excited about the opportunities that the acquisition of Otherside Inc. brings to the Group initially providing a profitable revenue stream whilst adding to our capability in driving traffic to NetPlay's brands once the integration is complete. This alongside the Group's solid marketing performance and opportunistic acquisition strategy supported by a robust cash position gives us confidence for the year ahead and beyond."

 

 

Enquiries:

NetPlay TV plc

www.netplaytv.com

Bjarke Larsen, Chief Executive Officer  

Akshay Kumar, Group Finance Director

Via Redleaf



 

Redleaf Communications

Tel: 020 7382 4730

Rebecca Sanders-Hewett

Susie Hudson   

[email protected]



 

Shore Capital (Nominated Adviser and Broker)

Tel: 020 7408 4090

Stephane Auton

Edward Mansfield


 

Notes to Editors:

About NetPlay TV plc

NetPlay TV plc is admitted to trading on the AIM market of the London Stock Exchange (NPT). The Group operates a number of interactive gaming services under a UK remote operating license and Alderney gaming license, including SuperCasino.com, Jackpot247.com and Vernons.com. Its TV services can also be viewed 24 hours a day live on Sky Channel 862, and every evening on ITV and 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 Board is pleased to report that the decisions made at the end of 2014 are bearing fruit with the core KPIs in H1 2015 holding strong. As announced previously, the Board revised its marketing strategy with a view to deliver positive results in the shadow of the new Point of Consumption (POC) duty in the UK§§. This has resulted in total active depositing player increasing by 13% to 63,411 (H2 2014: 56,079; H1 2014: 62,356) and average revenue per active depositing players (across the casino-only brands) increasing to £273 (H2 2014: £270; H1 2014: £265). In addition the Group focused a significant amount of its marketing effort on servicing existing players through targeted customer retention activity which resulted in 62% (H2 2014: 57%; H1 2014: 55%) of all revenue being generated from players who have had an account for over 12 months.

 

The Group was successful in renegotiating terms with Channel 5 / Viacom to secure its long-term television arrangements. I am pleased to report that in April 2015, the Group signed a new three year partnership agreement, which incorporates the existing post-midnight airtime, supporting pre-midnight media and an option to deliver new show formats. This ensures SuperCasino remains on UK terrestrial TV until December 2018 and is testament to the value this long term relationship brings to both parties and in particular the SuperCasino brand.

 

From an operational perspective, we are pleased to report that within the period the Group launched the fully responsive SuperCasino site and created the platform to ensure a speedy delivery of Jackpot247 and Vernons brands which will launch later this year. Once complete the player will enjoy a consistent user experience across all devices.

 

Post period, the Group completed the acquisition of Otherside Inc ("Otherside"), which has given the Group access to a specialist team of digital marketers which will help support the growth of the digital acquisition strategy as well as provide an additional source of income for the Group.

 

Marketing expenditure & performance

 

The marketing strategy has always been the key to ensure the Group's success, particularly so  in 2015 following the introduction of POC. The change in marketing strategy has been successful; despite the total marketing expenditure decreasing by 24% to £4.5m (H2 2014: £5.9m; H1 2014: £7.1m), total new depositing players have increased by 21% to 42,305 (H2 2014: 35,102; H1 2014: 40,585) showing that overall the Group's cost per acquisition (CPA) has decreased significantly.

 

The focus on the TV-led player acquisition strategy supported by digital shows that the Group has a firm handle on costs and can continue to drive value from its broadcast partners. Following the acquisition of Otherside Inc. the Group will now look to invest in new sources of player acquisition as we look to grow the business into 2016.

 



 

Income statement presentation

 


H1 2015

£ 000s

 

Adj. 1

£ 000s

 

 

Adj. 2

£ 000s

 

Adjusted H1 2015

£ 000s

Adjusted H2 2014

£ 000s

Adjusted H1 2014

£ 000s

 

 

Net revenue

 

12,748

 

-

-

12,748

12,858

14,500

 

Betting and gaming duties

 

(1,924)

-

-

(1,924)

(435)

(83)

 

Marketing expenses

 

(4,495)

 

-

-

(4,495)

(5,880)

(7,062)

 

Operating expenses

 

(3,026)

 

-

-

(3,026)

(3,036)

(3,205)

 

Administrative expenses

 

(3,088)

 

983

108

(1,997)

(2,148)

(1,944)

 

Adjusted EBITDA

 




1,306

1,358

2,207

 

Depreciation

 

-

(151)

-

(151)

(163)

(151)

 

Amortisation

 

-

(72)

-

(72)

(55)

(23)

 

Finance Income

 

24

-

-

24

28

25

 

Adjusted profit before tax




1,107

1,168

2,058

 

Impairment of intangible assets

 

-

-

-

-

(869)

-

 

Reorganisation and other expenses

 

-

-

-

-

(711)

(87)

 

Share based payments

 

-

-

(108)

(108)

33

21

 

Amortisation of acquired intangible assets

 

-

(760)

-

(760)

(751)

(769)

 

Reported profit before tax

 

239

 

-

-

239

(1,130)

1,223

 

Income tax

 

(2)

 

-

-

(2)

(154)

(39)

 

Profit after tax

 

(237)

 

-

-

 

(237)

(1,284)

1,184

 

 

Adj 1: Reclassification of depreciation and amortisation

Adj 2: Reclassification of share based payments charge


 

The table above reconciles the statutory format of the Income statement to adjusted EBITDA and profit before tax which is used by management internally to evaluate the underlying performance of the business. In the opinion of the Board this format better reflects the operational performance of the Group. The discussion in this section below will focus on the adjusted information.

 

Like-for-like adjusted EBITDA

 

The UK POC duty was introduced on 1 December 2014. In order to provide a relative comparative we have created a like-for-like adjusted EBITDA which reflects this headwind to show the impact as if it had been in place during 2014. However the Group would have obtained various contractual offsets (e.g. a reduction in software royalties and revenue-linked marketing expenditure) to reduce the impact of the POC which are also reflected in table below.

 

 

 


H1 2015

H2 2014

H1 2014


£'000

£'000

£'000





Adjusted EBITDA

1,306

1,358

2,207

Deduct UK POC duty

-

(1,539)

(2,131)

Add back contractual offsets due to UK POC duty

-

288

507

Like-for-like adjusted EBITDA

1,306

107

583

 

 

 

Cash flow and cash generation

 

The table below shows how adjusted EBITDA reconciles to net cash flow from the online gaming operation when stripping out the movement in player balances, working capital, share capital issued, net finance income, reorganisation and other expenses, and dividends paid.

 



 

 


H1 2015

H2 2014

H1 2014


£'000

£'000

£'000

Adjusted EBITDA

1,306

1,358

2,207

Capital expenditure

(284)

(156)

(363)

Other

(14)

(68)

7

Net cash generated from onling gaming operations

1,008

1, 134

1,851

Cash conversion: Adjusted EBITDA to net cash generated from online gaming operations

77%

84%

84%

Movement in player balances

(242)

507

(117)

Working capital movements

1,916

(630)

(523)

Share capital issued

-

26

172

Net finance income

24

35

18

Reorganisation and other expenses paid

(119)

(513)

(87)

Dividend paid

(979)

(651)

(947)

Increase in cash

1,608

(92)

367

 

The Group continues to be highly cash generative, with net cash generated from online gaming operations being £1.0m (H2 2014: £1.1m; H1 2014: £1.9m). The Group now has cash and cash equivalents of £15.8m (H2 2014: £14.2m; H1 2014: £14.3m), which net of player balances means there is corporate cash available of £13.9m (H2 2014: £12.1; H1 2014: £12.6m). This is equivalent to 4.7 pence per ordinary share in issue at the 30 June 2015 (4.1 pence per ordinary share in issue at 31 December 2014; 4.3 pence per ordinary share in issue at 30 June 2014).

 

The positive working capital movement in the period includes timing differences which have been incurred due to the timing of certain payments which have been expensed but not paid. This includes a payment due to HMRC in respect of the POC duty. The reorganisation and other expenses paid relate to items which were expensed in 2014 but were not payable until 2015.

 

To support our platform for long term growth, during the period the Group has invested in capex associated with software development for the new fully responsive customer facing websites. In addition to this, capital expenditure has been incurred to upgrade the offshore web and hosting environments.

 

Earnings per share

 

The directors have chosen to report an adjusted profit before taxation and adjusted earnings per share as they believe these measures better reflect the underlying performance of the Group. These results are summarised in the table below:

 


H1 2015

H2 2014

H1 2014

£'000

£'000

£'000




Adjusted profit attributable to shareholders




Profit before taxation

239

(1,130)

1,223

Amortisation of intangibles arising on acquisition

760

751

769

Share based payments

108

(33)

(21)

Impairment of intagibles

-

869

-

Reorganisation & other expenses

-

711

87

Adjusted profit before taxation

1,107

1,168

2,058


Pence per share

Pence per share

Pence per share

Adjusted earnings per share

0.37

0.40

0.70






Pence per share

Pence per share

Pence per share





Adjusted diluted earnings per share

0.37

0.39

0.66

 

 

 

 

 

Dividend

 

Due to the continued strong cash position and generating ability of the Group, the Board is maintaining the interim dividend payable to 0.22 pence per share (2014 interim dividend: 0.22 pence per share). The interim dividend will be paid on 22 October 2015 to shareholders on the register on Friday 2 October 2015.

 

 

Post period highlights

 

Acquisition of Otherside Inc

 

In August 2015, the Group acquired Otherside Inc. an online marketing, product development and technology company. The Board believes the acquisition of Otherside will provide NetPlay with a number of key benefits, including:

 

·      A robust media platform and specialist staff which enables the Group to control and tailor its digital marketing strategy;

·      Opportunity to deliver additional traffic to the Group's existing brands; and

·      Diversify the Groups source of revenue.

 

The acquisition strategically aligns with our core business and supports our digital strategy across the Group's brand portfolio. Details of the terms of this acquisition are disclosed in Note 9.

 

Product developments

 

We are very pleased to announce the successful launch of our mobile sportsbook product on Vernons, which following limited promotion now takes over 50% of our total sportsbook stakes. To support the sportsbook we have also agreed terms with PlayTech to launch virtual sports across Vernons mobile and desktop as well as the SuperCasino and Jackpot brands. The Group has applied for a Virtual Sports license from the UKGC and we are hopeful that this will be granted in the coming weeks.

 

With the launch of mobile sportsbook and the imminent release of virtual sports we now have an opportunity and scope to market the brand through a Vernons sports marketing campaign.

 

As highlighted in the operational overview we have launched a fully responsive SuperCasino web/mobile site and platform which will allow us to roll out the new Jackpot247 and Vernons sites before the end of the year. All three of the Group brands will also benefit from the release of new content across mobile and desktop. With over 30 web and 80 mobile titles still to release this year we are confident our players will continue to choose our brands as their favourite place to play.

 

 

H2 Outlook

 

As the Group moves into the second half of the year we remain focused on delivering against the growth strategy we set out at the start of the year.

 

Over the recent weeks and months, it is clear that the sector is rapidly consolidating, brought about by the introduction of POC. The Board continues to review potential M&A opportunities to take advantage of the changing market conditions and the opportunities that will arise. However any deal will need to be value enhancing and right for Netplay, and to that end the Board has already considered and rejected a number of M&A opportunities which have been identified and reviewed but which were not seen as representing value for shareholders.

 

Having seen great potential in Otherside,  the NetPlay team is working to complete the integration into the Group and then start the process of driving traffic to the Group's brands.

 

 



 

NetPlay TV plc

 

Consolidated statement of comprehensive income

 

for the six months ended 30 June 2015



6 months ended

30 June

2015


6 months ended

30 June

2014


Year ended

31 December

2014



£ 000's


£ 000's


£ 000's


Note

Unaudited


Unaudited


Audited















Net revenue


12,748


14,500


27,358








Betting and gaming duties


(1,924)


(83)


(518)

Marketing expenses


(4,495)


(7,062)


(13,365)

Operating expenses


(3,026)


(3,205)


(6,373)

Administrative expenses


(3,088)


(2,952)


(7,062)








Adjusted EBITDA*


1,306


2,207


3,565















Depreciation of property, plant and equipment


(151)


(151)


(314)

Amortisation of intangible assets


(832)


(792)


(1,598)

Impairment of intangible assets


-


-


(869)

Reorganisation and other expenses


-


(87)


(798)

Share based payments


(108)


21


54








Profit from operations


215


1,198


40








Finance income


24


25


53

Profit before taxation


239


1,223


93








Income tax (charge)

 

4

(2)


(39)


(193)

Profit and total comprehensive income


237


1,184


(100)















Basic earnings per share


0.08


0.40


(0.03)















Diluted earnings per share


0.08


0.39


(0.03)

                                                                                                                                               

 

 

NetPlay TV plc

 

Consolidated statement of financial position

 

as at 30 June 2015

Company registration number: 03954744


As at

30 June 2015


As at

30 June 2014


As at

31 Dec

2014



£ 000's


£ 000's


£ 000's


Note

Unaudited


Unaudited


Audited

ASSETS














Non-current assets







Property, plant and equipment

5

451


597


526

Goodwill

6

4,171


4,171


4,171

Other intangible assets

7

1,444


3,679


2,068

Deferred tax asset

4

36


192


38

Total non-current assets


6,102


8,639


6,803








Current assets







Trade and other receivables


1,307


1,475


1,596

Cash and cash equivalents


15,794


14,278


14,186

Total current assets


17,101


15,753


15,782








Total assets


23,203


24,392


22,585








EQUITY AND LIABILITIES














Equity







Share capital

8

2,966


2,960


2,966

Share premium

8

668


648


668

Merger reserve


1,088


1,088


1,088

Retained earnings


10,701


13,267


11,366

Total equity


15,423


17,963


16,088








Current liabilities







Trade and other payables


7,780


6,187


6,434

Provisions


-


242


63

Total current liabilities


7,780


6,429


6,497








Total equity and liabilities


23,203


24,392


22,585

 

 

 

 

 

 



 

NetPlay TV plc

 

Consolidated statement of cash flows

 

for the six months ended 30 June 2015


6 months ended

30 June 2015


6 months ended

30 June 2014


Year

ended

31 December

2014


£ 000's


£ 000's


£ 000's


Unaudited


Unaudited


Audited







Cash flows from operating activities






Profit for the period

237


1,184


(100)







Adjustments for:






Depreciation

151


151


314

Amortisation

832


792


1,598

Impairment of intangible assets

-


-


(869)

Share based payments (credit) /charge

108


(21)


(54)

Finance income

(24)


(18)


(53)

Income tax charge/ (credit)

2


39


193

Decrease/ (increase) in trade and other receivables

289


(468)


(589)

Increase/ (decrease) in trade and other payables

1,315


(36)


278

Decrease in provisions

(63)


(136)


(315)

Net cash from operating activities

2,847


1,487


2,141







Cash flows from investing activities






Purchase of property, plant and equipment

(76)


(166)


(258)

Purchase of intangible assets

(208)


(197)


(261)

Interest received

24


18


53

Net cash used in investing activities

(260)


(345)


(466)







Cash flows from financing activities






Net proceeds from issuance of ordinary shares

-


172


198

Dividend paid

(979)


(947)


(1,598)

Net cash used in financing activities

(979)


(775)


(1,400)







Net increase in cash

1,608


367


275







Cash & cash equivalents at beginning of period

14,186


13,911


13,911

Cash & cash equivalents at end of period

15,794


14,278


14,186







 



 

NetPlay TV plc

 

Consolidated statement of changes in equity

 

for the six months ended 30 June 2015

 


Share capital

Merger reserve

Total


£ 000's

£ 000's

£ 000's





 As at 1 January 2014

2,936

1,088

17,525





Profit and total comprehensive income

-

-

1,184





Shares issued for employee share options

24

-

172





Share based payment charge

-

-  

29





Dividend paid

-

-  

(947)    





As at 30 June 2014

2,960

648

1,088

13,267

17,963











Profit and total comprehensive income

-  

-  

(1,284)





Shares issued for employee share options

6

-  

26





Share based payment charge

-

-  

34





Dividend paid

-

-

(651)







 As at 31 December 2014

2,966

668

1,088

11,366

16,088











Profit and total comprehensive income

-

-

237









Shares issued for employee share options

-

-

-





Share based payment charge

-


77





Dividend paid

-

-

(979)





As at 30 June 2015

2,966

668

1,088

10,701

15,423

 

 

Notes to the interim results

 

1. Basis of preparation

 

The financial information for the year ended 31 December 2014 does not constitute the full statutory accounts for that year.  The Annual Report and Financial Statements for 2014 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statement for 2014 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 14 September 2015. 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 2014 and which will form the basis of the 2014 financial statements.  A number of new and amended standards have become effective for periods beginning on 1 January 2015, however none of these are expected to materially affect the Group.

 

 

 

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 online gaming segment. This division consists of all online products and ancillary income. The brands operated in this division are SuperCasino.com, Jackpot247.com and Vernons.com which are aggregated into one reportable segment.

 

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

 



 

 

 

6 months ended

30 June

2015

6 months ended

30 June 2014

Year

ended 31 December

2014


£ 000's

£ 000's

£ 000's

Income statement items




Gross gaming income

17,165

18,271

35,721

Ancillary income

242

296

775

Gross income

17,407

18,567

36,496

Customer incentives

(4,659)

(4,067)

(9,138)

Net revenue

12,748

14,500

27,358

Betting and gaming duties

(1,924)

(83)

(518)

Marketing expenses

(4,495)

(7,061)

(12,941)

Operating expenses

(3,026)

(3,205)

(6,242)

Administrative expenses - online gaming

(1,207)

(1,342)

(2,828)

Online gaming contribution

2,096

2,809

4,829

Administrative expenses - Head Office Costs

(790)

(602)

(1,264)

Adjusted EBITDA

1,306

2,207

3,565

Reorganisation costs

-

(87)

(798)

Depreciation of property, plant and equipment

(151)

(151)

(314)

Amortisation of intangible assets

(832)

(792)

(1,598)

Impairment of intangible assets

-

-

(869)

Share Based payments

(108)

21

54

Finance income

24

25

53

Profit before tax

239

1,223

93

Income Tax

(2)

(39)

(193)

Profit for the year

237

1,184

(100)









 

Geographical information


External revenue by location of customers

Non-current assets by location of assets


30 June 2015

 

£000's

30 June 2014

 

£000's

31 December 2014

£000's

30 June 2015

 

£000's

30 June 2014

 

£000's

31 December 2014

£000's

United Kingdom, including Channel islands

12,631

14,291

27,032

5,899

7,371

6,503

British Virgin Islands

-

-

-

201

1,268

300

Rest of world

117

209

326

-

-

-


12,748

14,500

27,358

6,100

8,639

6,803

 



3. Earnings per share


6 months ended

30 June 2015

6 months ended

30 June 2014

Year

ended 31 December

2014


£ 000's

£ 000's

£ 000's

Profit attributable to shareholders




Profit after taxation

237

1,184

(100)






Number of Shares

Number of Shares

Number of Shares

Weighted average numbers of ordinary shares in issue

296,510,629

294,113,030

295,178,669

Dilutive effect of shares under option

2,993,331

5,759,072

3,892,810

Weighted average numbers of dilutive ordinary shares

299,503,960

299,872,102

299,071,479






Pence per share

Pence per share

Pence per share





Earnings per share (EPS)

0.08

0.40

(0.03)





Diluted earnings per share

0.08

0.39

(0.03)

 

Adjusted earnings per share

 

An adjusted earnings per share, based on the profit before taxation from continuing operations and before the amortisation of intangible assets arising on acquisitions, share based payments and reorganisation costs, has been presented below in order to highlight the underlying trading performance of the Group.

 


6 months ended

30 June 2015

6 months ended

30 June 2014

Year

ended 31 December

2014

Adjusted profit attributable to shareholders




Profit before taxation

239

1,223

93

Amortisation of intangibles arising on acquisition

760

769

1,520

Share based payments

108

(21)

(54)

Impairment of intangibles

-

-

869

Reorganisation & other expenses

-

87

798

Adjusted rofit before taxation

1,107

2,058

3,226

 

 

 

 

Pence per share

Pence per share

Pence per share

Adjusted earnings per share

0.37

0.70

1.09






Pence per share

Pence per share

Pence per share





Adjusted diluted earnings per share

0.37

0.69

1.07

 



 

4. Deferred tax


Tax losses

£'000

Total

£'000




At 1 January 2014

231

231

Credits to the income statement

(39)

(39)

At 30 June 2014

192

192

Charge to the income statement

(154)

(154)

At 31 December 2014

38

38

Charge to the income statement

(2)

(2)

At 30 June 2015

36

36

 

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

 

5. Property, plant and equipment

Leasehold improvements

Computer equipment

Fixtures & fittings

Total

 


£ 000's

£ 000's

£ 000's

£ 000's

Cost





As at 1 January 2014

           465

3,156

214

3,835






Additions

 -

159

7

166

As at 30 June 2014

           465

3,315

221

4,001






Additions

 -

76

16

92

As at 31 December 2014

           465

3,391

237

4,093






Additions

 -

76

-

76

As at 30 June 2015

           465

3,467

237

4,169






Depreciation





As at 1 January 2014

438

2,640

175

3,253






Charge in the period

16

125

10

151

As at 30 June 2014

454

2,765

185

3,404






Charge in the period

11

142

10

163

As at 31 December 2014

465

2,907

195

3,567






Charge in the period

-

140

11

151

As at 30 June 2015

465

3,047

206

3,718






Net book value





As at 30 June 2015

-

420

31

451






As at 31 December 2014

-

484

42

526






As at 30 June 2014

11

550

36

597

 

 



 

6. Goodwill


£ 000's

Cost




As at 30 June 2014, 31 December 2014 and 30 June 2015

4,171



Net book value


As at 30 June 2014, 31 December 2014 and 30 June 2015

4,171



 

7. Intangible assets


Customer data-bases

Brand

Domain names

Websites & other
develop-ment

Partner relation-ships

Total









£ 000's

£ 000's

£ 000's

£ 000's

£ 000's

£ 000's

Cost







As at 1 January 2014

6,051

460

5,401

281

997

13,190








Additions

22

-

-

175

-

197

As at 30 June 2014

6,073

460

5,401

456

997

13,387








Additions

2

-

-

62

-

64

As at 31 December 2014

6,075

460

5,401

518

997

13,451








Additions

-

-

-

208

-

208

As at 30 June 2015

6,075

460

5,401

726

997

13,659








Amortisation







As at 1 January 2014

3,808

12

3,918

181

997

8,916








Charge in the period

644

23

102

23

-

792

As at 30 June 2014

4,452

35

4,020

204

997

9,708








Charge in the period

644

23

102

37

-

806

Impairment

-

-

869

-

-

869

As at 31 December 2014

5,096

58

4,991

241

997

11,383








Charge in the period

644

23

102

63

-

832

As at 30 June 2015

5,740

81

5,093

304

997

12,215








Net book value







As at 30 June 2015

334

379

308

422

-

1,444








As at 31 December 2014

979

402

410

277

-

2,068








As at 30 June 2014

1,621

425

1,381

252

-

3,679

 



 

8. Share capital

 

Ordinary shares of 1p each

Number

Ordinary shares

Share premium

Total



£ 000's

£ 000's

£ 000's











At 1 January 2014

293,544,212

2,936

500

3,436






Employee share option scheme:





- Proceeds from shares issued

2,466,350

24

148

172






At 30 June 2014

296,010,562

2,960

648

3,608






Employee share option scheme:





- Proceeds from shares issued

600,000

6

20

26











At 31 December 2014 and 30 June 2015

296,610,562

2,966

668

3,634











9. Subsequent events

 

On 12 August 2015 the Group acquired the trade and assets of Otherside Inc., an online marketing, product development and technology company, for total consideration of £3.2m. This acquisition is expected to provide a number a key benefits to the Group including:

 

·      A robust media platform and specialist staff enabling the Group to control and tailor its digital marketing strategies.

 

·      Synergies within the Group's existing gaming operations, delivering additional traffic to the Group's existing brands as well as a marketing skillset complimentary to its core products.

 

·      The diversification of NetPlay's revenue by maintaining Othersides' current revenue streams and growing this business by building on the success of the marketing company to date.

 

The consideration for the trade and assets comprises of an initial consideration of £2.7m and a further consideration of £0.5 m is payable over 12 months subject to the vendor completing certain deliverables as well as the continued employment of certain key individuals.



* It is the view of the Board that following the introduction of the POC duty and a shift in marketing strategy at the end of 2014 a more meaningful comparison for the H1 2015 numbers is the H2 2014 numbers as opposed to the H1 2014 numbers. Consequently, all three numbers are presented for transparency.  

Viacom International Media Networks, a division of Viacom Inc, announced on 10 September 2014 the completion of its £450M acquisition of Channel 5 Broadcasting Limited from Northern & Shell Media Group.

Adjusted EBITDA is reconciled on the Consolidated Statement of Comprehensive Income. Adjusted EBITDA is non-GAAP, company specific measure, and excludes reorganisation and other expenses, impairment of intangible assets and share based payment charges

§ H1 2014 & H2 2014 Adjusted EBITDA has been ameded on a like-for-like basis to reflect the UK POC duty as if it had been in place during 2014 reduced by various contractual offsets.

** Adjusted profit before tax excludes amortisation of intangibles arising on acquisition, share based payment chrges, impairment of intangible assets and reorginisation and other expenses. Adjusted earnings per share is calculated based on adjusted profit before tax. A full reconciliation is provided in Note 3.

†† Net cash generated from online gaming operations is net increase in cash excluding cash movements due to movement in player balances, working capital movements, share capital issued, net finance income, reorgination and other expenses paid and dividend paid.

‡‡ Details of the terms of this acquisition are disclosed in Note 9.

§§ As a result it is the view of the Board that a more meaningful comparison for the H1 2015 numbers is the H2 2014 numbers as opposed to the H1 2014 numbers. However all three numbers are presented in this section for transparency.

* Adjusted EBITDA is a non-GAAP, company specific measure and excludes reorganisation and other expenses, impairment of intangible assets and share based payment charges.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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