Newsplayer shares sink despite Sir David Frost's £300,000 lifeline

Sir David Frost, the veteran TV presenter, has thrown a £300,000 lifeline to Newsplayer, a struggling internet company, which has admitted it could run out of cash early next year.

Shares in the group, which owns a database of internet newsreels, sunk by nearly three-quarters yesterday after it issued a profits warning and extended its expected break-even date by six months.

Newsplayer, which owns the internet distribution rights to ITN and Reuters news archives, EMI music videos and 40 years of Sir David's TV interviews, said it was burning about £160,000 cash a month. The group had cash reserves of £438,000 at the end of October.

Sir David, who is a non-executive director at Newsplayer, said he had agreed to defer a £150,000 payment that the company owed him in January. The broadcaster, who has interviewed the last six US presidents and six British prime ministers, has also agreed to extend a three-year £160,000 convertible loan to the company.

The group, which was floated at 84p-a-share in mid-2000, said its pre-tax loss for the year to end-October would be around £2.3m, on revenues of £950,000. It expects to break-even in October 2003. Its shares fell 10p to 3.5p, valuing the group at £2.4m.

Newsplayer said despite the difficult trading outlook, it was confident of securing access to "sufficient funds ... to fund [its] working capital requirements". It added that "a number of parties and individuals both in London and New York ... have expressed an interest in investing in the company".

The group, which relies on customers accessing its archives over the internet, has suffered from the slow take-up of broadband services in Britain. Penetration in the UK is only 7 per cent of the population.