B2C and B2B growth boosts Nektan as revenue rises in FY19

Gaming technology platform and services provider Nektan has reported a 14.8% year-on-year increase in revenue for the 2019 financial year, as it was boosted by growth across both its B2C and B2B segments.

Net gaming revenue amounted to £22.5m (€24.5m/$27.4m) in the 12 months to June 30, 2019, up from £19.6m in the corresponding period last year.

B2C remains Nektan’s primary source of income, with revenue from this area of the business increasing by 10.8% year-on-year to £21.5m. This was boosted by a 6.8% rise in B2C cash wagering to £597.8m, although there was a 16.3% decline in first-time depositors to 131,128.

Nektan also experienced significant growth within its B2B business area, with revenue rocketing by 308.3% from £240,000 in FY18 to £980,000 in the most recent 12-month period.

This growth comes despite Nektan being hit by year-on-year declines during the fourth quarter, with net gaming revenue slipping 29.3% from £5.8m to £4.1m.

B2C net gaming revenue fell 33.3% to £3.8m after a 31.9% drop in cash wagering to £110.9m, while first-time depositors also slipped 44.9% to 31,914. However, there was more positive news in terms of B2B, with this segment seeing revenue jump 200% year-on-year to £330,000.

Major highlights for Nektan during the three months to June 30, 2019 included launching 13 new white label casino sites via its B2C business and expanding its B2C product offering with the roll-out of a new mobile-first bingo product.

In terms of B2B, the number of partners currently active with Nektan increased from 10 in Q3 to 12 by the end of the fourth quarter, with more scheduled to go live during the current quarter.

Nektan was also able to increase the number of games providers on its casino platform to 42 – with the addition of Rocksalt Interactive, ReelFeel, Rogue Gaming and Inspired Gaming – while four new games have been developed in partnership with Rocksalt and ReelFeel.

“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,” Nektan’s chief executive, Lucy Buckley, said.

“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.

“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.”

The increase in full-year revenue comes after Nektan last month issued a profit warning to investors due to an ongoing, quarter-on-quarter decline in player deposits. At the time, Nektan said this trend would continue into Q4 and this has now been confirmed after figures were published in the trading update.