Nektan Reveals 2018 Loss Despite 51.5% Revenue Growth In New Report
London based company Nektan has reported a 2018 loss despite its 51.5% revenue growth
Revenue for the firm, which focuses on developing and distributing casino games, grew to £20.1 million over the last 12 months and Nektan launched an additional 38 white label casino sites during the period which contributed a 48.1% increase in gaming revenue.
By the end of June 2018, Nektan had launched over 100 white label casino sites and its first-time depositors grew around 20% year-on-year to a whopping of 156,703 last year. In addition, the amount of money wagered increased 43.4%.
Nektan’s Evolve Lit, a content aggregation platform that launched back in November 2017, generated an additional £556,000. Last year saw the service roll out to popular betting site and online casino BetVictor.
On top of that, the firm generated £99,000 from its US-based Respin subsidiary which recently rebranded to Rapid Games. Nektan announced last year that it had struck a deal to sell a 57.5% stake in the subsidiary to an anonymous third-party partner.
However, the cost of sales rose year-on-year by 57.8% to £7.5 million. This left Nektan with a gross profit of £12.6 million at the end of their 2018 financial year. Alongside this, Nektan saw its marking, partner and affiliate costs rise 31% to £9.5 million.
Meanwhile, the firm’s administrative expenses rose to £5.4 million due to the US subsidiary, which was only consolidated for six months. Nektan’s European business also reported a rise in administrative expenses, up 11.8% to £4.4 million. The company also landed an additional expense of £404,000 due to fundraising and restructuring.
Because of this, Nektan’s adjusted earnings before interest, tax, depreciation and amortisation loss fell to £2.4 million. This saw the company make a loss of £5.5 million, an 18% increase from the previous year, and a pre-tax loss of £7.2 million. Following a £230,000 tax credit, Nektan made a loss of £7.0 million for the entire year, an increase of 13.6% from the previous year.
As stated above, Nektan announced that it had struck a deal with an unknown third-party partner to sell a majority stake of its Rapid Games subsidiary for £2.0 million. The company also has plans to make an additional £1.5 million through equity placing and subscriptions.
The plans will be pioneered by Chief Executive Lucy Buckley, who joined Nektan in early December 2018. In a statement, Buckley said: “I am delighted to have joined Nektan at this pivotal point in the company’s evolution.
“The global gaming market, in particular on mobile, is still growing rapidly and I believe Nektan is well positioned to increase its market share and capture new value from emerging markets. Our next-generation mobile casino platform, Evolve, is new technology that has been built mobile-first; a key competitive advantage as we see mobile play outstrip desktop and tablet globally.”
She added: “Nektan’s extensive experience in managing over 150 casino brands in competitive and highly regulated markers ensures that new platform features are data-driven and experience-led.”
To find out more about Nektan and its casino websites, click here.