London-listed gaming technology specialist Nektan has reached a major milestone in its move to break-even as announced in its unaudited interim results for the six months ending 31 December 2018.
The group announced back in January that it was on-course to breaking even in 2019, having reported record KPI growth, new commercial partnerships and progress on its US market foundations.
Lucy Buckley, Chief Executive Officer of Nektan, praised the achievement. She commented:“Achieving EBITDA break-even during the period is a key milestone for Nektan and our key focus for the remainder of FY19 is on maintaining and improving profitability. EBITDA break-even was reached due to both increased revenues and operational efficiencies.”
The group’s revenues had grown by 48 per cent for the 12 months, totalling just over £13m. Nektan’s progress has been significantly aided through the development of its white-label product, which took the group’s casino portfolio to a record 152 in Europe.
Buckley added: “Whilst we believe in our US mobile casino product, and are excited about the macro trends in the market, the proposed sale of the majority shareholding of our US subsidiary is a major contributor to our profitability plan by removing Nektan funding for the US going forward, but retaining a material stake in the emerging US market.
“In Europe, Asia and Africa, our emergent B2B division is generating new high margin revenue by licensing our proprietary technology to leading operators. We are successfully attracting major casino and gaming partners as evidenced by our BetVictor launch in October 2018 and post-period end contract win with MoPlay, announced in March 2019.
“Nektan is in a strong position to build on the success of the first half of FY19 and we look forward to providing further updates.”
While the group remains in ongoing discussions with the UK tax authority regarding a £2.9mln point of consumption tax bill, the group hopes that it will be “ significantly reduced by virtue of the funds received from the equity fundraising and part disposal of Respin”
Nektan’s US subsidiary, Respin, had soft launched its proprietary in-venue mobile gaming product with a major US tier-one casino operator and signed a new contract with one of the largest casinos in Palm Springs, California.
The gaming technology provider has since recorded an impairment charge in relation to Respin. Currently, a majority stake is being sold for Respin, which is expected to be completed by the end of next month.