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Nektan PLC

Nektan PLC Continuing Improved Trading in Q3

Nektan plc (LON:NKTN), a leading international B2B gaming solutions and services provider, provided today an update on trading for the three months ended 31 March 2017.

Managed Gaming Solutions (Europe)

· Continued improvements in trading, with growth across key performance indicators (“KPIs”) in conjunction with a realignment of player marketing towards higher margin activities which will continue to improve Company profitability.

Q3 FY17 Q3 FY16 Change Q2 FY17 Change
Net Gaming Revenue (NGR) £3.7m £2.2m 63% £3.6m 3%
First Time Depositors 38,424 15,568 147% 35,215 9%
Cash Wagering £99.0m £56.1m 77% £106.7m -7%
Transactions processed (bets or spins) 132.3m 56.3m 235% 122.7m 8%

· Further casino network and product improvements in Q3 in Europe:

o Launched 39 new casino games from IGT, NetEnt, Microgaming and NYX.

o New localised casino proposition for the Swedish market.

o Signed and launched 13 new casinos for both existing and new customers.

B2B (Europe)

· As the Company proceeds with its realigned strategy to leverage its assets, expertise and networks across both North America and Europe, the Company launched a new B2B software licensing and games distribution business with the signing of:

o Partnership agreement with Hi5 Games to become the distributor of its game titles in Europe and Canada with exclusive rights over the games portfolio and additional rights to transfer the games to HTML5 mobile format.

o Distribution contract with Spin Games LLC (“Spin”) to license and supply Spin’s portfolio of proprietary and certain third party mobile casino games to European gaming operators.

On-Premise Gaming (North America)

· On 6 February 2017, the Company increased its ownership of Respin Inc, the US focused Class II mobile in-venue solution provider, to 100%, transitioning the business to an operating subsidiary of Nektan from a joint venture.

· In the quarter, Respin signed its first major contract with a Tier-1 US casino operator to launch its real money in venue mobile games solution into the US casino market and has a further 5 signed Letters of Intent from other casinos to install the solution.

Leigh Nissim, Chief Executive Officer of Nektan Plc, said: “I’m encouraged by Nektan’s continuing improvements in trading and the continuing realignment of the Company to a leading international gaming solutions and services provider.

In our Managed Solutions business in Europe, we have focused intentionally on optimising the managed casino network, improving the return on our player marketing spend for certain partner brands and proactively controlling our operating costs across the casino network. The net impact of both adjustments is positive – the network continues to grow and at the same time our margins are improving.

The launch of our new B2B games and software licensing business in Q3 is exciting and will be an important focus for Nektan to support our growth. The good progress of our North American business in signing new customers also positions the business well for future success.

Nektan continues to make positive progress across our businesses in Europe and the US, powered by our proprietary core platform, Evolve, helping the Company to strengthen its position as an international gaming provider, offering solutions and services that are fresh, high quality and tangibly different from other suppliers.”

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