TIDMNKTN
RNS Number : 8998C
Nektan PLC
01 July 2016
Nektan plc
("Nektan", the "Company" or the "Group")
Pre-close Trading Update
Nektan plc (AIM: NKTN), a leading international mobile gaming
provider, today provides a pre-close update on trading for the year
ended 30 June 2016.
The Directors expect that growth in revenue for the second half
of the year to be positive with an expected total NGR of GBP4,243k
(H1: GBP1,629k), an increase of 160% over the first half of the
year. Player numbers are similarly up, with total cash bets
increased by 129% to GBP104.1m in H2 (H1: GBP45.4m) and the number
of first time depositors increasing by 77% to 30,997 in H2 (H1:
17,512), reflecting the continued progress of the business.
During the year, Nektan launched 29 new partners in to its
network and achieved a number of important milestones that position
the business favourably for continued growth:
-- Migration of all players and partners to its new and upgraded
Evolve 2 platform, the proprietary back office platform owned and
operated by Nektan.
-- Addition of 110 new games from leading providers such as IGT, NetEnt, SciGames and others.
-- New payment methods available to players including BOKU
-- Launch of Nektan Marketing Services for the provision of
digital gaming player acquisition and marketing services for Nektan
partners.
-- Extension of the customer journey and associated payments to
enable multi-currency processing and the facilitation of
International gaming transactions.
The migration of customer partners to the new Evolve 2 platform
during the last quarter caused some slowdown in growth due to
anticipated downtime and testing of the new platform which is now
fully operational and functioning as expected.
As previously announced in the Interim Results for the six
months ended 31 December 2015, the Directors implemented a
wholescale review of all costs and have reduced fixed costs to a
monthly run rate of approximately GBP340,000 from GBP490,000.
Overall, revenues for the full year are expected to be at or
around market expectations with LBITDA expected to be marginally
below.
As previously announced on 14 June 2016, Respin LLC ("Respin"),
the Group's US joint venture, continued to build on strong momentum
in the period with regulatory approval from a designated
independent test lab for release of its "Rapid Games" product, a
Class II Mobile in venue gaming solution.
Leigh Nissim, the incoming CEO of Nektan PLC, is due to start on
Monday 25(th) July.
Working Capital
The Group's business model continues to see it receive net
gaming revenues in cash on a monthly basis, which will grow in line
with its business activities. The Group has significant cash
outflows around quarterly payments of gaming revenue taxes and
convertible loan note interest. The marginally lower level of
EBITDA has reduced the Company's cash levels and therefore
Directors are continuing to assess the Group's financing
options.
These options include seeking new investors, debt finance or
other financial support from key stakeholders for the Group;
seeking a strategic partner; or seeking to realise value from its
trading assets.
The directors of Respin, the Group's US joint venture, are also
in active discussions with selected parties about the funding of
that business. This may or may not lead to cash being made
available to Nektan.
These options are being explored in detail and, whilst the
Directors believe that, if required, the Group would be reasonably
likely to secure additional funding from one of these options, any
such funding or realisation of value in those circumstances could
be on unfavourable and onerous terms.
Jim Wilkinson, Chairman of Nektan PLC, said:
"The progress in the business this year is encouraging. Our
focus on building the foundations for continued growth has been
positive, with the Evolve 2 platform now established
internationally and our business operations maturing as we expand.
We plan to develop the business further across both Europe and the
US as both mobile casino markets expand."
For further information on the Group, please contact:
Nektan via Newgate below
Gary Shaw, Executive Chairman
Zeus Capital Limited (Nominated Adviser & Broker) Tel: +44 (0)20 3829 5000
Giles Balleny, Nicholas How (Corporate Finance)
Adam Pollock (Corporate Broking)
Newgate (PR Adviser) Tel: +44 (0)20 7680 6550
James Benjamin Em: nektan@newgatecomms.com
Alex Shilov
Lydia Thompson
Further information on Nektan can be found on the Company's
website at www.nektan.com
About Nektan:
Nektan is a leading international B2B mobile gaming content
developer and platform provider. The Group designs, builds and
operates mobile games in the regulated, interactive real money
gaming ("RMG") and freemium gaming space, delivering original and
innovative content to large commercial organisations that have
established online audiences.
About Respin LLC:
Respin LLC located in Reno Nevada, was formed in 2015 by Spin
Games LLC and is currently a joint venture with Nektan PLC. The
company develops disruptive technologies to roll out on- property
mobile gaming solutions for land-based casino operators across
North America where there is legalized gambling. Respin specializes
and offers solutions which allow operators to add mobile technology
and content to their existing offerings, with products to be made
accessible to customers across both cabinets and mobile devices
inside the casinos. Respin has a strong intellectual property
portfolio including game patents for Rapid Games(TM) (on-property
mobile entertainment), and other captivating concepts and
brands.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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