Cellcast posts drop in revenue as it warns over future profitability

LONDON (ShareCast) - (ShareCast News) - Cellcast (LSE: CLTV.L - news) posted a drop in revenues for the six months to 30 June, as it warned over future profitability. The participation TV broadcaster and producer saw a drop in interactive broadcast revenues to £5.6m, down from £6.3m in the first half of 2014.

However the AIM-listed company is starting to turn things around, with a first half profit of £0.26m.

In 2014 the company avoided reporting a gross loss of £0.436m thanks to a one off payment from Entertainment Networks of £2.98m, taking the group's half year profit to £2.9m.

Cellcast chief executive Andrew Wilson remained positive despite a mixed bag of results.

"Whilst we continue to see a decline in demand for our core products and services in the UK, the cost restructuring efforts undertaken in 2013 and 2014 have enabled us to maintain profitability.

"The board is actively pursuing new business opportunities for the company in the gaming and gambling sectors.

Wilson (Oslo: WILS.OL - news) said the board hopes to be able to update shareholders on progress by the end of the year.

The outlook wasn't as rosy, however, with a warning that the company needs to maintain consumer demand at current levels to keep being profitable.

"The business has now implemented the bulk of the cost cutting programme that can be achieved without impacting revenue." "The group's diversification initiatives, focused on the mobile gambling sector in emerging markets, continue. However, service launches planned for the third quarter have been delayed by technical and regulatory challenges and are being rescheduled for the last quarter of this year." At 1331 BST, Cellcast shares were down 15.8% at 1.20p.