Regulated market expansion sees NetEnt deliver H1 solid growth & profits

Publishing its H1 2017 interim trading results (period ending 31 June), Stockholm-listed industry content and games developer NetEnt has detailed a strong commercial momentum, recording growth across its core metrics.

Updating investors, NetEnt governance stated that H1 had delivered ‘solid growth’ for its verticals, with the company hitting H1 revenues of SEK 805 million, up 15% on corresponding H1 2016’s SEK 697 million.

Adding a further 21 new customers during the H1 period, NetEnt would declare a period profit of SEK 281 million (H1 2016: SEK 251 million) despite the firm recording a slight decline in operating margins to 35%.

Closing a busy period, NetEnt governance would declare a group profit after tax of SEK 258 million (H1 2016: 235million), representing a 9.5% increase in performance.

NetEnt governance detailed that the delivery of growth and profits was a testament to the firm’s ongoing strategy of expanding its services within regulated markets. The company would highlight the performance of its content within the UK and Italian markets.

The company further highlights that it expects rapid growth in the markets of Spain, Denmark, Belgium and New Jersey to support its established markets in the coming months.

Per Eriksson, President and CEO would comment on H1 2017 trading

The number of gaming transactions in our systems amounted to 10.1 billion during the quarter, corresponding to an increase of 14.4 percent compared to the second quarter of last year. At the same time, the royalty level for our products remained stable. Mobile gaming continued to contribute to our growth and accounted for more than half of our revenues in June. NetEnt continues to generate strong cash flows – in the second quarter free cash flow after investments amounted to 131 SEKm, an increase of 39.8 percent compared to Q2 2016. At the end of May, 540 SEKm of cash was distributed to shareholders through an automatic redemption program. The cash flow generation of our business gives us the financial flexibility to invest in future growth while we continue to aim for significant cash returns to our shareholders.”