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Nektan plc

Nektan double revenues in latest trading update

Nektan (LON:NKTN), the fast growing, award-winning international gaming technology platform and services provider, today announced a trading update for the six months ended 31 December 2019. 

Following the Group’s restructuring, as announced on 7 January 2020, the Company is now focused on delivering enhanced casino technology and gaming content into international markets with leading operators under a higher margin B2B business model. With this in mind, Nektan is pleased to announce the following trading update for the continuing business, on an unaudited basis for the six months ended 31 December 2019.

Six months ended 31 December 2019 KPIs (unaudited)

 H1 FY20H1 FY19ChangeDec 2019Nov 2019Change
B2B Revenue£787k£311k153.1%£225k£111k102.7%
# sites live / generating revenue285 2818 
# sites live / in beta6 64 
# sites in pipeline to launch216 216 

* Number of sites is the key KPI as B2B partners may operate multiple sites across markets.

In the B2B division, the Group generated revenues of £787k in H1 FY20 – growth of 153.1% over H1 FY19.  It should be noted that Q2 FY20 saw an intense period of activity with a significant number of sites either entering beta or going live.  Whilst we would expect a ramp up period of 3-4 months following launch, revenue in December 2019 grew by 102.7% over November 2019, underpinning management’s confidence of significant growth over the coming months as sites which have recently gone live ramp up.

The Group is now live in multiple markets across Europe, Africa and Asia, with Latin America to be launched in Q3 2020.  Following the period end, the Board is pleased to report that the Group has launched a further 6 sites in January 2020 that were in beta in December 2019.  A further pipeline of 21 confirmed sites is currently due to be launched over the coming months.  The monthly revenue to be earned under the recently signed platform agreement with Grace Media Limited following their acquisition of the Group’s previously held UK B2C business (which launched as a B2B partner in January 2020) will provide a further uplift to B2B revenues from January 2020 onwards.

Gary Shaw, Interim Chief Executive Officer of Nektan, said:

“The restructuring represents an important milestone for Nektan. We can now focus on executing our strategy of becoming a dedicated casino technology and gaming content provider globally.  These initial results support the Directors’ decision to focus solely on B2B opportunities.

Trading for the six months to 31 December 2019 saw the Group achieving more than double the revenues for the same period last year. The last few months have seen an intense period of activity culminating in now having 34 sites live. With the majority of these going live at the back end of the calendar year, combined with a 3-4 month ramp up period, we expect to report further significant revenue growth during the current quarter (Q3 2020) – early signs in January underpin this.  As a result, the Group continues to anticipate reaching monthly EBITDA break-even by the end of this financial year.”

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.