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Nektan Q2 Trading Update – Record Quarterly Revenues Combining B2C and B2B Divisions

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Nektan plc (AIM: NKTN), the fast growing international gaming technology platform and services provider, is pleased to announce another record quarter for the second three months of the financial year ending 30 June 2019 (Q2 FY19).

The figures stated below are all unaudited.

Group Total (B2C & B2B, excluding US)

Q2 FY19 Q1 FY19** Change Q2 FY18** Change
Total Gaming Revenue* £8.6m £6.7m 28.4% £4.7m 83.0%
Cash Wagering £222.5m £182.4m 22.0% £127.8m 74.1%

*NGR from B2C and GGR from B2B
**adjusted using new GGR

Highlights

  • KPIs Update:
    • Total Gaming Revenue increased 28.4% to £8.6m in Q2 FY19, up from £6.7m in Q1 FY19 (up 83% on Q2 FY18).
    • In Q2 FY19 Nektan’s technology generated over £222.5m in Cash Wagers, up from £182.4m in Q1 FY19, representing an increase of £40.1m (22% growth).
    • Growth driven by a significant increase in the number of unique players on the B2B platform, helped by 4 new partners going live.
    • Premium gaming content added across both B2C and B2B divisions.
    • Additional partners signed up across both B2C and B2B divisions, including BetVictor in B2B.

 

  • EBITDA break-even on track:
    • Growth trajectory should result in European EBITDA break-even by the end of FY19 (30 June 2019).
  • Board:
    • Lucy Buckley joined as Chief Executive Officer on 3 December 2018.

Excluding the Company’s US division, the combination of both its B2C and B2B divisions has seen this latest quarter deliver stronger than expected growth, leading to record quarterly revenues. The higher margin B2B division has been a particular standout with significant increases in commercial partnerships, player numbers and cash wagering, with the highlight being Nektan’s new partnership with global tier-one online gaming company, BetVictor.

As a result of the new revenues from the emerging B2B division, the quarterly trading updates will now report the Total Gaming Revenue which includes the industry standard Net Gaming Revenue (NGR) from B2C and, due to the global nature of the B2B business, the Gross Gaming Revenue (GGR) from B2B.

Nektan aggregates and delivers premium casino content from the industry’s leading game providers which, using its proprietary technology, it delivers as either a fully managed white label casino solution to its B2C partners or as a content distributor to its B2B partners. Nektan’s white label solution is delivered via its Evolve platform, while the E-Lite platform distributes cutting-edge content. Both platforms leverage Nektan’s market leading bonusing and business intelligence tools.

B2C White Label Managed Casino Solutions Update

 

Q2 FY19 Q1 FY19 Change* Q2 FY18 Change*
Net Gaming Revenue (NGR)** £6.2m £6.4m -3.1% £4.7m 31.9%
First Time Depositors (FTDs) 36,328 38,981 -6.8% 36,907 -1.6%
Cash Wagering £168m £178.3m -5.8% £127.8m 31.5%

*calculated using underlying, non-rounded figures

  • Higher than expected player wins and bonusing led to small decline in B2C NGR.
  • Launched new white label casino partners, notably the Shipley Brothers, taking the number of managed global casino brands to a record of 145 across Europe.
  • Considerable enhancements to Nektan’s technology platform including new Content Management System tool, New Partner Request Console
  • Player and acquisition marketing now managed in-house by Nektan.
  • Swedish Gambling Licence application submitted to operate online casinos in the newly regulated market.

 

B2B Platform and Distribution Update

Q2 FY19 Q1 FY19 Change* Q2 FY18 Change*
Gross Gaming Revenue (GGR) £2.4m £0.3m 700% N/A N/A
Unique Players 77,961 4,079 1811% N/A N/A
Cash Wagering £54.5m £4.1m 1229% N/A N/A
Number of Partners Live 10 6 66.7% N/A N/A

*calculated using underlying, non-rounded figures

  • Nektan went live with 4 new operators, including BetVictor and 1xBet, taking the total number of B2B partners to 10.
  • Two new sheltering deals agreed with Habanero and Spin Games.
  • Nektan’s B2B division is benefiting from its speed of integration and breadth of premium gaming content leading to significant global sales pipeline of B2B partners.

 

Gaming Content Update

  • Nektan’s first co-developed game with Rising Entertainment, Rank Up Dragon launched in December 2018 across Nektan’s 145 B2C white label sites and will be launched across Nektan’s B2B partners in Q3 FY19. It has become a top performing game across Nektan’s B2C network.
  • More higher margin co-developed titles expected to be launched in the coming months.
  • NetEnt’s new Live Dealer product launched across Nektan’s B2C white label casinos.
  • Nektan continues to position itself as a leading distributor of market-leading casino content:
    • In Q2 FY19 Nektan signed up new game studios, including Aspect, Probability Jones and The Games Company.
    • The total number of available games increased to over 750 (700 in Q1 FY19, an increase of 7%), from a total of 27 games providers.

 

North America Update

  • Nektan’s US subsidiary, Respin LLC (Respin), continues to make commercial headway in US Class II and Class III markets for mobile ‘On Premise’ gaming:
    • Signed an agreement to launch Respin’s on premise digital gaming platform and games with another California based tribal casino, expecting to go live with real money gaming offered on mobile and smart table devices in February 2019.
    • Respin secured agreements with Leap Virtual Sports and with Grand Vision Gaming (owned by Century Gaming Technologies), the leading supplier of Keno content in North America, to offer their content via Respin’s mobile platform for Class II and Class III gaming.
    • In December 2018 Respin launched a free-to-play version of the Respin platform at a casino based in Oregon.  The platform is powering 4 smart tables and is being marketed to customers as a training tool and way to create interest for an eventual launch of the real money version of the platform.
    • Launch of tier-one casino, based in California, now due to go live in January 2019 (previously due to go live in Q2 FY19).
  • Nektan recently announced that it is in advanced discussions to sell 57.5 per cent of the issued share capital of its US subsidiary, Respin, to a third party for total consideration of £2.0 million in cash as well as the provision of £300,000 in working capital to Respin by the investing entity. If concluded, this would reduce the cash burden on the wider Group. These developments remain ongoing but are expected to be concluded before the end of Q3 FY19.

 

Lucy Buckley, Chief Executive Officer of Nektan, said:

“This record-breaking quarter for the Group has not only highlighted that we have made significant enhancements to our technology, but we are becoming a firmly established business that is on track to be profitable in our core European business by the end of this financial year ending 30 June 2019.

Looking back at this quarter and ahead, we are very excited about the size of partners we are now attracting. Our BetVictor contract win with this tier-one operator is a landmark for Nektan and we are proud to have them believe in the breadth and depth of our offering. The B2B figures continue to demonstrate the huge potential that that division has in fuelling our growth going forward.

Another significant highlight from the end of the last quarter was the announcement of potential external investment in our US business. Once completed, we believe these developments will put Nektan in its strongest and most secure position to date.”

For further information on the Group, please contact:

Nektan

Lucy Buckley, Chief Executive Officer

Gary Shaw, Executive Officer

+44 20 3463 8735
Stockdale Securities Limited (Nominated Adviser and Joint Broker)

Tom Griffiths / Ed Thomas

+44 20 7601 6100
Smaller Company Capital Limited (Joint Broker)

Rupert Williams / Jeremy Woodgate

+44 20 3651 2911
Nominis Advisory (PR Adviser)

Angus Campbell

+44 7 881 625 098

Email: [email protected]

Further information on Nektan can be found on the Group’s website at www.nektan.com.

About Nektan:

Nektan is an international B2B and white label gaming software and services provider, operating in the regulated, interactive real money gaming (RMG) space, delivering original and innovative solutions to commercial organisations that have established online audiences.

Nektan’s full end-to-end technology platform, Evolve, simplifies and supports the route to mobile and desktop gaming revenues, managing the full customer experience and back-office operations, allowing commercial partners to focus on marketing the product to their consumers.

Nektan’s US operating subsidiary, provides US land-based casinos with in-venue mobile gaming solutions which allow operators to add mobile technology and content to their existing offerings, with products accessible to players across both cabinets and mobile devices inside the casinos. Respin has a strong intellectual property portfolio including game patents for Rapid Games (on-property mobile entertainment), and other captivating concepts and brands.

Nektan is headquartered in Gibraltar, regulated by the Gibraltar Licensing Authority and the UK Gambling Commission, as well as in the Irish market and maintains sales and customer support operations in Europe and North America. The proprietary Evolve technology is developed and maintained by a talented and experienced team of employees from Nektan’s Indian office.

Nektan plc was admitted to the AIM market of the London Stock Exchange in November 2014.

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Speechless Announces Hybrid License, Giving Actors Greater Control Over Their AI-Generated Voices

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New platform will enable voice actors to gain commission on their AI-generated counterparts while also streamlining the development process for studios

Today, Speechless, the voice actor database and asset tool for the games industry, has announced its new Hybrid AI License, combining real voice talent and generative artificial intelligence (AI). This new license will enable game developers to utilize all aspects of modern voice-over production while providing more equitable opportunities for the actors themselves. With the current games landscape increasingly experimenting with the potential of AI, Speechless is offering a solution that takes a greater ethical approach to this technology.

The first complete management system for the games industry, Speechless’ Hybrid AI License easily allows developers to use the full range of voice-over options in one place; from text-to-speech, speech-to-speech and conventional voice recording. Unlike other text-to-speech providers, Speechless’ integrated approach allows developers to access the voice actors behind the AI-generated, text-to-speech options. This license not only enables developers to gain greater creative control over voice production but also gives actors control over their AI-generated voice.

Voice actors will benefit from this license by having their AI-generated voice earn a commission when it is licensed by developers. In addition, developers can utilize text-to-speech options to refine their scripts before bringing on the voice actor for the full recording. Developers can then adjust the voice actor’s recording with its AI counterpart at the later stages of development, removing the need for reshoots and allowing voice actors to move on to new projects.

The potential of Speechless’ License also enables a greater depth of content for side characters and NPCs and streamlines localization in new markets while keeping voice talent involved. With the rise of generative AI in game development, Speechless is establishing the best practice for utilizing the advantages of this technology without excluding the creative talent of voice actors.

This new license is available immediately and follows Speechless’ recent collaboration with audio middleware leader Audiokinetic Wwise.

“We can’t ignore the potential AI has for the games industry but we need to approach this technology ethically; that’s what we aim to achieve when it comes to voice-acting,” the Chief Executive Officer for Speechless, Peo Drangert (pictured), said. “By offering a hybrid license, developers can streamline their processes and experiment with different voice actors at a lower cost. At the same time, voice actors are compensated for their work and the work of their AI-generated voice, have greater opportunities to collaborate with studios and can work more flexibly. AI will continue to grow in the games sector, so we must use it responsibly to ensure a fairer industry.”

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eSports

Oddin.gg has entered into an exclusive multi-year data partnership with premier esports tournament organizer, PGL

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Building on the exceptional viewership of the PGL Major Copenhagen, which ascended to the third-most watched event in Counter-Strike history, PGL and Oddin.gg have agreed their strategic alliance through a substantive multi-year agreement.

This extension reinforces Oddin.gg’s position as the exclusive provider of Data & Integrity services for PGL’s premium Dota 2 and Counter-Strike 2 events, underscoring Oddin.gg’s ascendancy as a pivotal force in the esports official data sphere.

The scale and caliber of esports content under this partnership have catapulted Oddin.gg to the forefront as a major data authority. The success of this collaboration is a testament to the synergy between Oddin.gg and one of the most impactful tournament organizers in the competitive gaming arena.

The extended multi-year pact encompasses a minimum of eight Dota 2 headline events along with a minimum of eleven Tier 1 Counter-Strike 2 tournaments. These competitions will feature the elite of global teams, competing for prize pools of at least USD 1 million each, promising to further elevate the profile of this flourishing partnership.

Marek Suchar, Co-founder & Managing Director of Partnerships at Oddin.gg, enthusiastically speaks on the extended partnership: “Our commitment is to affiliate with the premier entities in esports, and PGL stands out as a peak of excellence within the tournament circuit.

Their team has masterfully orchestrated the top three most-watched Counter-Strike and the two most-watched Dota 2 tournaments in history. With the dynamic evolution expected in 2025, we are both excited and privileged to align with PGL’s visionary path for the esports community to support, protect and entertain esports fans. This partnership is a strategic step towards enhancing the global esports experience, and we eagerly anticipate the groundbreaking advancements PGL will introduce for Counter-Strike 2 and Dota 2 in the years ahead.”

Silviu Stroie, CEO of PGL, shares his perspective on the alliance’s growth: “At PGL, our core mission is to craft the ultimate esports experience on a global scale. Independence, innovation, and integrity are the pillars we stand on, promoting fairness and sustainability within the esports world. In Oddin.gg, we’ve found an ally that resonates with our ethos, making them the ideal partner as we forge ahead. Our ongoing partnership solidified through a multi-year contract, echoes our mutual commitment to the community of esports. With Oddin.gg’s unmatched data and integrity expertise, we’re elevating our tournaments beyond mere excitement to meet the highest benchmarks of fairness. United, we are on a quest to curate unrivaled esports events, propelling this dynamic industry toward a vibrant and thrilling future.”

The renewed alliance with Oddin.gg arrives at a transformative juncture for PGL, marking a significant expansion in their annual event roster. This strategic development is timed with the enactment of new regulations starting January 1st, 2025, which mandate the separation of tournament organizers from teams. These guidelines are set to foster a more competitive and varied landscape for Counter-Strike 2 tournaments, ensuring a level playing field and circumventing any potential conflicts of interest.

This partnership renewal covering 2024 to 2026 underscores the commitment to these principles, promising an array of thrilling competitive spectacles in the years to come. It signals a fresh epoch for PGL events, championed by the upcoming Wallachia tournament in May 2024, which will serve as the inaugural event under this new agreement. The Wallachia event is just the beginning, heralding a series of tournaments designed to captivate the global audience with unparalleled competitive narratives and a showcase of elite talent, reinforcing PGL’s status as a trailblazer in the esports domain.

 

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eSports

DATA.BET offers streaming videos collaborating with Bayes Esports

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The provider is reshaping esports content distribution with its new Bayes Esports video streams

DATA.BET, a reliable supplier of esports betting solutions, now delivers a tool that elevates the viewing experience on operators’ platforms in collaboration with Bayes Esports, the leading supplier of official esports live data, services, and products.

The introduction of video streams from a trusted source represents a significant step in addressing the challenges in content distribution for popular disciplines, such as CS2 and Dota 2. Approximately 90-97% of esports events are broadcasted through Twitch. However, the platform generally has delays that can reach up to 2 minutes, equal to a round in CS2, leading to an outdated viewing experience.

“Our live streams with reduced latency mark a significant milestone in esports betting development,” stated Alex Kozachenko, Chief Product Officer at DATA.BET. “In a strong partnership with Bayes Esports, we deliver our clients and their users a faster, more reliable alternative to conventional streaming platforms, ensuring an immersive and authentic viewing experience.”

Bayes Esports’ video streams offer a solution for minimizing delays by providing official broadcasts directly from tournament organizers, serving as a “source of truth” for esports streaming content. The integration of this streaming feature also presents new opportunities for operators to increase retention and enhance their services by incorporating branding and marketing campaigns directly into the streams.

“Our partnership with DATA.BET unlocks new avenues for platform engagement,” commented Amir Mirzaee, CCO and Managing Director of Bayes Esports. “In an industry where user satisfaction is essential, providing operators access to high-quality, low-delay tournament broadcasts is a game-changer. It enables them to provide unique content and enhance the overall betting experience, fostering deeper connections with their audience and driving sustained growth. Official, low delay video feeds are a sure way to identify the respective official data offerings for users and a way to make sure that their engagement benefits the esports ecosystem.”

 

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