Nektan losses grow but revenues also up

Nektan will hit monthly breakeven EBITDA by the end of the current financial year despite posting heavy losses for H1 2015/16, the casino supplier said in a trading update this morning.

The firm said losses for the six months ended 31 December 2015 were ?3.67m, a 55% increase on the ?2.36m losses for the same period in 2014.

However, there were signs of encouragement, with revenues for the period up 550% year-on-year to ?1.63m.

Nektan said the company had seen compound monthly growth in net gaming revenue (NGR) of at least 32% since July, with NGR for January of ?827,000, driven by digital and mobile partners.

The firm also said strong action had been taken during January to reduce the ongoing monthly cost base by 45% to ?270,000 by April.

“In Europe, while we are seeing significant growth in our net gaming revenues, we are disappointed with the delayed acceleration in the period of one large contract which was anticipated to be worth approximately ?7m in current year NGR,” interim CEO Gary Shaw said.

“We are working hard with our partner to provide upgraded content, which will see an accelerated launch later in the second half of this financial year, and this has impacted revenues for the year as a whole,” he added.

Shaw was appointed CEO on an interim basis last month following the departure of David Gosen.

Nektan shares were down 30% on early trading this morning to 75.00p.