Nektan PLC Accelerating growth momentum across all business lines

Nektan plc (LON:NKTN), an international gaming technology platform and services provider, has today announced another record quarter for the first three months of the financial year ending 30 June 2019 (Q1 FY19).

Nektan delivers premium and compliant gaming content to gaming sites worldwide, via its proprietary technology platforms Evolve (B2C) and E-Lite (B2B). This latest quarter has delivered stronger than expected growth leading to record quarterly revenues.

The figures stated below are all unaudited.

Managed Gaming Solutions (Europe)

*calculated using underlying, non-rounded figures

Highlights

· KPIs Update:

o In Q1 FY19 Nektan delivered record NGR and Cash Wagering figures, during the summer months, traditionally a quieter time for gaming activity, especially one that included the World Cup.

o The Group’s strong growth in NGR has continued, growing 12.6% in Q1 FY19 versus Q4 FY18 and 64.6% versus Q1 FY18.

o The dip in FTDs during Q1 FY19 is due to an increasing focus on maximising player life time values which will improve profitability going forward for Nektan and its partners.

· Gaming Distribution Update:

o Nektan launched multiple new sites and is now delivering gaming content to a record number of 143 global casino brands in Q1 FY19.

o The Group’s pipeline of additional casino brands from both existing and new UK and international partners remains strong.

· Gaming Content Update:

o Nektan’s platform has over 700 games (over 500 in Q4 FY18, an increase of 40%) from a total of 27 games providers, underlining the diversified nature of Nektan’s large gaming content portfolio.

· Nektan remains on course to become EBITDA break-even in Europe by the end of FY19.

B2B

· As previously reported, via the E-Lite platform, Nektan’s B2B business is seen as an area of significant growth potential and higher margin, which in the past three quarters has provided quarter-on-quarter growth of 77%, 27% with Q1 FY19 delivering revenue of £142k, growth of 35% versus £105k in Q4 FY18.

· Nektan now has a total of 14 deals live globally compared with 12 in Q4 FY18.

· The first global platform deal with Tyche Digital now has 14 sites live from 10 operators and has experienced double digit month on month growth in Q1 FY19, albeit off a low base. In addition, there is a significant pipeline of further integrations expected over the coming months, where Nektan is benefiting from its speed of integration and breadth of premium content and games offering.

· 432 games are now live on E-Lite from a total of 13 games providers.

North America

· In Q1 FY19, Nektan has completed back-end integration, regulatory approval and white label customisation with a major tier-one operator for launch in-venue in Q2 FY19.

· Metric Gaming’s full-service Race and Sports betting platform has now been integrated into the Evolve platform, giving Nektan a wider product offering in the US.

· Using its development team based in India, Nektan has completed the development of four third-party games for launch on Nektan’s Evolve platform in both the US, through its US brand Rapid Games, and in Europe.

· With the recent Supreme Court Professional and Amateur Sports Protection Act (“PASPA”) ruling, the Board is seeing significant interest in the US market. The Board continues to review its options in the US, which include expressions of interest to invest directly into the US business unit, with the objective of reducing the cash burden on Nektan within the next two quarters.

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

“Q1 FY19 has been very strong and we have seen accelerating growth momentum across all business lines. 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.

Given the past few quarters of continual expansion in content provision and our significant build-up of global partnerships, we are now within striking distance of our ambition to be the dominant provider of premium gaming content 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. 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.

We are very confident that Nektan is in an excellent position to capitalise on the solid technological foundation we have built. Our B2B division in particular is bringing a wealth of international opportunities from tier-one partners. In addition, our North America division is making progress and is due to go live shortly with a tier-one operator. We are positioned to take advantage of the opening up of the sector in the United States with a pipeline of upcoming opportunities.”