Nektan sets new revenue record in Q1 results

Nektan sets new revenue record in Q1 results

Wednesday, October 3, 2018 Posted by News Team
Finance
Supplier beats expectations in traditionally quiet quarter

iGaming platform and services provider Nektan has set a new revenue record in the first three months of its 2019 financial year.

Net gaming revenue for the quarter ended September 30th grew 64.6% year-on-year to £6.4m. It outperformed expectations in a period that the company described as traditionally quieter for gaming. This was more impressive considering the quarter included the final stages of the 2018 World Cup, suggesting customers would be focused on sports betting.

The revenue growth came despite a decline in first time depositors, falling 2.9% year-on-year to 38,981. This also represented a 10% decline from the final quarter of Nektan’s 2018 financial year ended June 30th. Nektan said that this decline was down to its focus on maximising player lifetime value for its core white label platform business, which it said would improve profitability for the supplier and its partners going forward.

This focus on maximising player value saw deposits rise 40.7% to £178.3m, aided by the launch of multiple new sites during the period. By the end of the three months, Nektan was delivering gaming content to 143 global casino brands, with its pipeline of new launches from existing and new partners strong. 

It currently offers more than 700 games on its platform, up from 500 in the previous quarter, from 27 games providers. 

Nektan has moved to further diversify its revenue with the launch of its B2B E-Lite platform, which it describes as “an area of significant growth potential and higher margin”. B2B revenue grew 35% to £142,000 in Q1, with 14 clients live on the platform at the end of the quarter. It currently offers 432 games on the platform, from 13 games providers. 

The company is also targeting growth in the US market, and expects to launch an in-venue solution for “a major tier-one operator” in the second quarter of its 2019 financial year. 

It is also targeting further growth resulting from the repeal of the Professional and Amateur Sports Protection Act. Nektan has integrated Metric Gaming’s sports betting platform into the Evolve platform, and is examining potential opportunities for investors to provide capital to support its US business unit. 

Nektan has also completed the development of four third-party games for launch on its Evolve platform in the US and Europe. 

“Q1 FY19 has been very strong and we have seen accelerating growth momentum across all business lines,” Nektan interim chief executive Gary Shaw said. “We are on course to be EBITDA positive in Europe by the end of this financial year.  Since becoming a public company in 2014, Nektan has seen only one quarter-on-quarter decline in revenue, which was during this usually quieter period of activity in the same period last year, so we are very encouraged to see such a positive quarter and expect this success to continue.

Shaw said that the company was now “within striking distance” of its ambition to be the dominant premium gaming content provider in the industry. 

“We will continue to build our portfolio of content which, combined with speed of content delivery into partners’ live gaming sites globally, makes Nektan's offering a very attractive proposition,” he continued. “We are adding more cutting-edge content and channelling this not only to more partners, but bigger partners too. Nektan is live in more jurisdictions and languages than ever before and, in particular, our Asia business, is scaling substantially as our technology is applied by more partners."

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