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Nektan targeting monthly break-even by June

Published: 18:27 27 Jan 2020 AEDT

Nektan PLC -

Nektan PLC's (LON:NKTN) decision to restructure and focus on providing its gaming platform to businesses is going well, with revenues growing strongly.

The company said its business-to-business (B2B) division in the six months to the end of December saw revenues rise 153.1% to £787,000 from the preceding six months’ total of £311,000.

The company did point out, however, that the final three months of 2019 – the second quarter of the company’s fiscal year (FY20) - saw an intense period of activity with a significant number of sites either entering beta or going live.

Typically, the ramp-up period lasts three or four months following the launch of a new site and December saw revenues double from November, underpinning management's confidence of significant growth over the coming months as sites that have recently gone live get into their stride.

The group is now operating in multiple markets across Europe, Africa and Asia, and expects to go live in Latin America in the first quarter of 2020.

Nektan launched a further six 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 business-to-consumer (B2C) business (which launched as a B2B partner in January 2020) will provide a further uplift to B2B revenues from January 2020 onwards, 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,” said Gary Shaw, the interim chief executive officer of Nektan..

“Trading for the six months to 31 December 2019 saw the group achieving more than double the revenues for the same period last year,” he added.

“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," Shaw revealed.

The restructuring of the group in the second half of last year meant it was unable to publish its full-year results for the year to the end of June, as a result of which trading in its shares was suspended.

The company has now published the full-year results and the listing of its shares has been restored on AIM.

Total revenue in the 12 months to 30 June 2019 rose to £22.58mln from £19.89mln the year before.

Underlying earnings (EBITDA) widened to £2.03mln from £1.34mln the previous year while the loss before tax deepened to £6.41mln from £5.00mln.

Nektan PLC focusing on being cash generative in 2019

Gary Shaw, chief executive of Nektan PLC (LON:NKTN), spoke to Proactive's Andrew Scott after reporting record results for their fourth quarter as the business closed out a strong financial year in 2018. Net gaming revenue (NGR) for its managed gaming solutions division in Europe had risen...

on 5/7/18