Good morning! It was the monthly investor evening called "Mello" last night, in Beckenham, and I have to say what a pleasant evening it was. I really do strongly recommend that people based in the South East try to get along to these evenings, as it's such a pleasant crowd of regulars, who are very welcoming to newcomers. Last night I did the first presentation, then it was the turn of NetPlay TV (LON:NPT), who gave us a very thorough briefing on their recent strong results.

My main issue with Netplay, and the reason I sold my shares after just a couple of days of holding them, was that a friend alerted me to the significant negative impact on their earnings which is likely to happen when the UK Govt changes the tax regime for online betting companies. I felt this was somewhat glossed over in the presentation last night, and has the potential in my view to harm the share price once investors latch onto the impact of the tax changes. Some of that impact can be mitigated, and the company explained their strategies for that, but it's still a nasty headwind, and for that reason I won't be revisiting this one until I'm clearer on how the earnings figures are likely to look from 2015 onwards.

That said, Netplay are cushioned by a very strong Balance Sheet, with lots of net cash, and arguably the low current valuation (once you strip out cash) already factors in some reduction in earnings in the future. Sorry to sound negative, and thank you to the Directors for giving up their time to explain the company to investors. It's always very interesting to meet Directors and hear them explain the business in their own words.

 

 

 

Turning to this morning's announcements, Porvair (LON:PRV) has issued a positive IMS, covering the nine months to 31 Aug 2013. They say that revenue in constant currency was up 13%, and that profit before tax is now expected to be ahead of expectations. Excellent stuff, although they needed to be doing well, to justify a valuation that had really become very stretched. I couldn't fathom why the market took it as high as 200p back in the spring, but much to my amazement it…

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