NetPlay Loses Popularity
The first half of 2010 NetPlay TV saw an increased revenue growth of 11%; unfortunately its losses have more than doubled compared to last year after the failed 6 month trial-period ITV product “Bingo Stars”.
NetPlay concluded an agreement with ITV to air a bingo game called “Bingo Stars” in April this year. Unfortunately, “Bingo Stars’, new software gaming format “underperformed and we were disappointed since our forecasts has not been met,” said Clive Jones, NetPlay’s non-executive chairman in an interview today. According to the statement it indicated that the first half of the year was a “difficult period” for the company and the losses incurred to date will most definitely have an adverse impact on its full year results.
Combined revenues increased from 21% to £11.31m from £9.34m in 2009 company has seen its profit margin increase substantially following its investment in its terrestrial teleshopping partnership with Channel Five in September 2009. Bingo Stars was the Company’s “Achilles Heel” and this very costly venture has seen its losses before tax, rose to £7.9m from £3.2m in 2009.
A profit warning had been released by NetPlay in June after BingoStars could not live up to its expectations by means of increasing the company’s profits. Before interest tax earnings depreciation and amortisation (EBITDA) were £0.74m in the first half of this year, in comparison with £0.12m during the same period last year.
In today’s announcement, CEO Martin Higginson added that following the termination of Bingo Stars, staff numbers had been “reduced significantly” and that a number of non-core contracts had been “terminated”. He went on to say that NetPlay would renew its focus on its core casino assets. In an interview with eGaming Review earlier this year, Higginson admitted that NetPlay had “taken a big gamble” investing heavily in the ITV model.
Various brands operate under the NetPlay banner like SuperCasino and ChallengeJackpot, which it purchased from Virgin Media Television earlier this year. Total casino revenues increased by 73% to £8.81m for the first half of this year in comparison to £5.07m the previous year.
“November sees the end of the ITV trial and our main aim now is to restructure our business again and shareholders will be updated on a regular basis as regard to the outcome in the next quarter,” explained Higginson.
“We gained a tremendous amount of insight from the failed ITV experience, in turn this failed experience would be utilised to increase the profit margin substantially again of our principal live casino offering and enhance sustainable profitability to our shareholders,” said Higginson.[addtoany]