Nektan PLC (LON:NKTN), a leading international B2B gaming solutions and services provider, announces its unaudited results for the six months ended 31 December 2016.
Financial Summary:
| Unaudited | Unaudited | |
| Six months ended | Six months ended | |
| 31 December 2016 | 31 December 2015 | |
| £’000 | £’000 | |
| Total revenue | 5727 | 1,629 |
| Adjusted EBITDA* | (1,498) | (3,658) |
| Operating loss ** | (512) | (5,015) |
| Profit / (loss) before taxation ** | 1,188 | (6,579) |
| Adjusted loss before taxation*** | (2,873) | (5,781) |
| Basic & diluted earnings / (loss) per share (pence) | 4.9 | (28.9) |
*Adjusted EBITDA excludes fundraising costs, impairments, non-recurring expenses and credits, and non-cash charges relating to share based payments and the profit on brands disposal
**In 2016 operating profit included the profit on brands disposal of £1,950k and profit before taxation includes the profit on brands disposal and the fair value adjustment on increase in equity ownership of £2,322k
*** Adjusted loss before taxation excludes fundraising costs, impairments, non-recurring expenses and credits, and non-cash charges relating to share based payments, profit on brands disposal and the fair value adjustment on increase in equity ownership of £2,322k
Summary:
· Revenue increase of 252% versus six months ended 31 December 2015 and 38% versus six months ended 30 June 2016
· Consistent quarterly growth across all key performance indicators (“KPIs”) in the Managed Services business in Europe
· Continued progress in the Company’s North American subsidiary Respin Games LLC (“Respin”), with its real money in-venue mobile games solution for the US casino market
Post-period end:
· Respin signed first major contract with a Tier-1 US casino operator to launch its real money in-venue mobile games solution into the US casino market and has five signed letters of intent from other casinos to install the solution
· The formal launch this quarter of Nektan’s new software licensing and games distribution B2B business. New agreements with Spin Games and Hi5 Games (“H5G”) help to position Nektan favourably as a new and innovative supplier in an important area of the interactive gaming market:
- Distribution contract with Spin Games LLC (“Spin”) to license and supply Spin’s portfolio of proprietary and certain third party mobile casino games to European gaming operators
- Partnership agreement with H5G to become the distributor of its game titles in Europe and Canada with exclusive rights over the games portfolio and additional rights to transfer the games to HTML5 mobile format
· The Company raised a total of £2.4 million via a subscription and open offer in December 2016 and January 2017
· The Company appointed Patrick Sinclair as Chief Financial Officer
· The Group is in discussions with a number of potential parties about securing long term funding and existing stakeholders about restructuring its capital structure with the aim of completing this in the coming weeks
Leigh Nissim, Chief Executive Officer of Nektan, said: The business continues to make significant positive progress as Nektan transitions from a white label operator to a leading international gaming solutions and services provider.
Our European managed solutions business, which now comprises 63 casino labels, continues to improve from a product perspective and is appealing to more players than ever. In parallel, our US business is installing its in-venue gaming solution, Rapid Games, in multiple casinos and is continuing to attract interest from potential casino customers. We expect that the work underway on augmenting our innovative and exciting in-venue mobile wagering products, with the addition of new games and player features, will continue to accelerate in an important section of the North American gaming market.
Nektan’s access to high-quality casino manufacturer game titles, coupled with our proprietary technology platform, Evolve, and licensing infrastructure, presents B2B opportunities for game licensing and software supply in Europe under traditional licensing arrangements. The formal launch this quarter of our B2B business with a distribution agreement signed with Spin Games and a partnership agreement with Hi5 Games, positions Nektan favourably as a new and innovative supplier in an important area of the interactive gaming market.
We are encouraged by these developments which are in line with our strategy to leverage our assets, expertise and networks across both North America and Europe, helping to maximise revenue in both territories.
In addition, we are pleased to report continuing growth across a number of our key metrics through the current quarter and we look forward to updating further in due course.
