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Nektan Plc

Nektan PLC Strong and growing global sales pipeline

Nektan plc (LON: NKTN), the fast growing, award-winning international gaming technology platform and services provider, has announced today its trading update for the fourth and final quarter of its financial year ended 30 June 2019 (Q4 FY19).

During FY19, total revenue increased by 14.8% over FY18 with good growth across both the B2C and B2B segments, and a record number of partners live. As previously announced, our Q4 FY19 KPIs continued to be impacted by similar conditions that affected Q3, including increased UK taxation and player verifications. Management has taken decisive action to ensure the Group is structured appropriately to these market conditions, whilst providing the strategic platform for planned expansion and growth in international markets.

Highlights

· Strong and growing global sales pipeline across both B2C and B2B.

· B2C – 13 new white label casino sites were launched in Q4 FY19, in addition to the expansion of the B2C product offering with the launch of a new mobile-first bingo product, which is now available across the white label network of casino sites.

· B2B – 12 partners currently live, up from 10 in Q3 FY19, with a number of partners due to go live during the current quarter. Recent launches include Volt Casino and MoPlay, along with entry into Africa with two of the leading gaming companies, Betika and BetLion, using E-Lite, the Company’s B2B content distribution platform.

· Total number of games providers into Nektan’s casino platform has increased to 42 from 38 in Q3 FY19, with the addition of Rocksalt Interactive, ReelFeel, Rogue Gaming and Inspired Gaming.

· Four new games have been developed in partnership with Rocksalt Interactive and ReelFeel, leading to increased higher margin content for the Company, with more games in the development pipeline.

Full-Year KPIs

 FY19FY18Change
Revenue*£22.5m£19.6M14.8%
B2C Net Gaming Revenue£21.5m£19.4M10.8%
B2B Revenue£0.98m£0.24m308.3%
B2C First Time Depositors (FTDs)131,128156,703-16.3%
B2C Cash Wagering£597.8m£559.8m6.8%

Q4 KPIs

 Q4 FY19Q3 FY19ChangeQ4 FY18**Change
Revenue*£4.1m£5.4m-24.1%£5.8m-29.3%
B2C Net Gaming Revenue£3.8m£5.1m-25.5%£5.7m-33.3%
B2B Revenue£0.33m£0.35m-5.7%£0.11m200.0%
B2C First Time Depositors (FTDs)23,85031,914-25.3%43,289-44.9%
B2C Cash Wagering£110.9m£141.0m-21.3%£162.9m-31.9%

The figures stated above are all unaudited.
*Net Gaming Revenue (jackpot adjusted) from B2C and Revenue Share from B2B
**adjusted

Lucy Buckley, Chief Executive Officer of Nektan, said:

“With an established proprietary technology platform and growing sales pipeline, Q4 has seen us go live with more B2C and B2B partners putting us in a strong position to accelerate our growth and increase revenues further over the course of FY20.

In the B2B division, we continue to make exciting progress; our pipeline of opportunities is continuing to develop and has seen engagement with an increasing number of larger market participants globally. We expect a number of these to go live during the remainder of 2019, which has the scope to have a transformational impact on our business.

Whilst Q4 saw a continuation of the B2C trading conditions we experienced in Q3, we have taken decisive action to structure the Company in response to the changing gaming environment and to provide the strategic platform for expansion and growth in international markets. Furthermore, a number of steps to enhance our product offering, including the launch of bingo and improved player journeys, have been completed in Q4 and we look forward to the new financial year with optimism.”