Nektan ‘on track’ despite losses

Nektan ‘on track’ despite losses

Friday, March 27, 2015 Totally Gaming

Leading B2B mobile gaming platform provider Nektan has every reason to remain confident of success despite posting losses for the second half of 2014, according to analyst Panmure Gordon.

Earlier this week, the company announced a loss before tax of £3.9m ($5.81m/€5.35m) for the six months through to the end of December on the back of a fall in revenue from £1.3m to £250,000.

However, Panmure Gordon said in a note released to that the period had been “transformational”, with the company having made significant investments and signed up new partners in the second half of last year.

“Nektan has announced interim results that highlight the significant progress this business has made since the first real-money gaming casino partner was launched in July 2014,” Panmure Gordon said.

“Management has invested wisely in the past 24 months in developing proprietary mobile gaming technology that has opened up a number of different routes to market, all of which have responded positively to Nektan’s offering.

Operational highlights in the second half of 2014 included going live with 10 real-money casino and one content licensing partner, alongside the two existing house brands, and a successful IPO on the Alternative Investment Market of the London Stock Exchange, which raised about £4.1m.

Perhaps most importantly Nektan also signed a US joint venture agreement with Spin Games to pursue US land-based opportunities for the delivery of in-venue mobile-enabled gaming.

“Our forecasts are based on a steady rate of new partner and customer acquisition,” Panmure Gordon added.

“Encouragingly, the company remains on track in this regard, with underlying performance metrics - such as growth in number of real money players and cash stakes - continuing to support the implications that new partner and customer wins have for growth in net gaming revenue.

“Sustaining this momentum will require capital in the near term, so we are pleased to see that the company has secured a £1.2m loan from existing shareholder DTL.”

Nektan said net gaming revenue from real money gaming increased to £115,000 in the half and added that it has continued to invest in the Evolve platform in the period.

That platform will power the new Sun Play operation, which came about after a deal was signed between Nektan and News UK last month.

Executive chairman Gary Shaw said: “Underpinned by our exceptional end-to-end mobile platform, Nektan is in a very strong position to exploit the exciting growth opportunities in the fastest-growing segment of online gaming in Europe as well as significant opportunities in the US.

“Post the period end, we signed a major contract with News UK to power Sun Play, an innovative mobile gaming offering aimed at the Sun's six million daily readers, and we are live in-venue in one casino in the US.

“Nektan has market-leading technology, a dedicated and skilled team and strong commercial momentum and the board remains confident of the delivery of the company's strategy.”

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