Netplay TV

AIM-quoted gaming concern Netplay TV is hoping a recent £2.5m placing will boost its prospects.

The company, which raised the money through a placing of 83.3m shares at a discounted 3p, plans to use the proceeds to strengthen its balance sheet. For the six months to September, Netplay reported losses more than doubled to £7.9m (2009: loss of £3.2m), despite increased sales of £11.3m (2009: £9.34m), caused by losses of £4.3m and £2.3m in its casino and bingo divisions. Cash dwindled from over £10m to £4.9m.

Led by CEO Martin Higginson, formerly the CEO and founder of ringtone company Monstermob, Netplay operates a number of brands including online gambling site SuperCasino.com, bingo website bingos.co.uk and online casino games operator ChallengeJackpot.com.

In July, Growth Company Investor recommended the shares as a speculative buy at 22.75p, at which stage we noted Netplay was forecast to produce full year profits of £3.12m and earnings of 1.5p a share. Since then, the company has disappointed, producing a weak set of results followed by 73% share price fall to 6.13p. For the year to December, the market now expects a widening in losses per share to 2.38p (2009: loss per share of 2.29p), ahead of losses of 0.41p in 2011.

Set to fail to meet earlier forecasts of profitability and having produced poor results, it is worth selling off any holdings in Netplay and avoiding the shares for the foreseeable future.