Nektan PLC (LON:NKTN) Chief Executive Officer Lucy Buckley caught up with DirectorsTalk for an exclusive interview to discuss their interim results, achieving EBITDA breakeven, Respin and what to expect in the next 6-12 months.
Q1: Interim results just out, the revenue growth has been impressive in last few quarters which has now been reflected in these H1 interims. What has been the key driver behind this, and can you expand further on the company’s key opportunities for continued growth?
A1: As you’ve said, we’ve had a very strong H1 mainly driven by growth across the business so in our B2C white label casino business and also in our new emerging B2B software supply business.
In B2C, we’ve now got 152 casinos that we manage and the net growth being impressive across Europe and we’ve seen that driving an increase in first-time depositors and cash wagering on the network.
Excitingly, our B2B division has really started to expand in this H1, we’ve now got 10 partners live, the key of those being the well-known brand BetVictor, and we announced a couple of weeks ago a new contract with MoPlay, another big operator.
That’s really what will be a key focus for the rest of the year, signing up more partners across B2C and also B2B.
Q2: Now, Nektan’s achieved EBITDA breakeven for the first time, what’s the significance of this for the business?
A2: This is the first time that the company has been reporting EBITDA breakeven, that’s a great milestone for the business and, as you can see, there’s an increase in the revenue but this is also driven by the operational efficiencies in the business.
So, it’s really a case of us maturing, we’ve now reached a good scale and it’s continuing to build on that through the remainder of the year so increase our revenue and an overall profitability.
Q3: We saw the sale of the US subsidiary, Respin, can you explain the decision behind the sale and provide any further updates on that?
A3: Respin, we recently announced the soft launch of the in-venue mobile gaming solution with a major tier 1 operator.
This solution allows players in California, where there’s no iGaming regulation, to be able to play on their own mobile devices in the casino so they don’t have to just play on a slot machine, they can play wherever they are on the casino floor or in bars, restaurants, by the pool. So, it’s a really exciting product from land-based operators in the US to be able to move players along that digital journey especially where regulation doesn’t yet allow it.
We also signed a new contract with another large operator in California and we have a strong pipeline of other contracts that we should be announcing in the next couple of months.
So, we do believe in the product and the macro trends in the US, there’s a lot changing now with the repeal of PASPA, there’s a lot of activity going on in that market and we see it being a key regulated market for the future. So, it’s important to us that we maintain a stake in that business but doing this transaction allows us to focus on funding the core European and Asia business. The new partner will take on the funding of that business going forward.
Q4: I think you’ve already hinted at this but what can investors look forward to from Nektan PLC over the coming -6-12 months?
A4: B2C, we are expanding the number of partners, we’re watching new games continually and new products and really growing the success of that casino business so increasing player retention and increasing the quality of the product as well as bringing new partners on board.
On the B2B side, signing up major new operators, BetVictor and MoPlay are two key ones that I mentioned, and we’ve got a strong sales pipeline of similar operators that we’ll be announcing in the coming months.
So, really strong sales pipeline on both sides and it’s about building that scale to increase revenue but always focussing on the profitability.