Financial News — Weekly Round-up for July 07, 2017

GVC Reports First Half Results

Positive momentum maintained across core businesses

The GVC Holdings online gambling group has released a trading update covering the first six months of 2017, noting that it has maintained performance momentum across its core businesses, and flagging the following achievements:

H1 2017 Group daily NGR up 10 percent year on year (+12 percent constant currency);

H1 2017 NGR Euro 484.8 million up 10 percent y-o-y (+11 percent in constant currency);

Q2 2017 Group daily NGR up 8 percent (+10 percent in constant currency) vs Q2 2016;

Q2 2017 underlying Group daily NGR up 15 percent vs Q2 2016 (excluding Euro 2016 revenues).

* Kalixa disposal completed 31 May 2017 – during the first half the payment firm contributed revenues of Euro 6.1 million – down on the Euro 7.6 illionm for pro forma H1 2016.

Management noted that the strong performance in the sports sector was achieved despite the absence of a major football tournament, reflecting continued good momentum across the business. Gross win margin in Sports was 10.1 percent (9.9 percent Q2 2016), in line with expectations of the long-term sustainable average. Gaming daily NGR from Sports Brands continued to benefit from improved product and CRM, increasing +16 percent (+18 percent constant currency) on Q2 2016.

Games Brands daily NGR increased 13 percent (+15 percent in constant currency) over the same period last year, the highest quarterly growth reported by the division since the acquisition of bwin.party in February 2016. Growth is being driven by partypoker and an improving performance from the Group’s standalone casino brands.

Chief executive officer Kenneth Alexander (CEO) reported to shareholders:

“The Group continues to perform well with positive momentum across our core businesses. Achieving Q2 constant currency NGR growth of 10 percent in the absence of a major football tournament is particularly pleasing.

“As demonstrated at our recent Capital Markets Day, the organic opportunity is significant, whilst we are also well positioned to pursue further acquisition opportunities should they arise. This combined with an increase in marketing investment in the second half to more normalised levels gives the Board confidence of GVC delivering another year of strong progress.”

Macau Revenue Up 25.9 Percent In June

But there are concerns regarding tightening regulation in the Asian gambling hub

Figures for June 2017 released Saturday by the Macau Gaming Inspection and Coordination Bureau show that revenues climbed 25.9 percent to 20 billion patacas, slightly short of analyst expectations amid fears of increasing regulatory clampdowns on the gambling island.

The rise follows a 24 percent increase in revenues recorded in May 2017 (see previous InfoPowa report.)

Analysts said the June increase is the highest since February 2014, and that last June revenues were at the lowest since 2010 as Macau struggled to prosper against a backdrop of a central government crackdown on anti-corruption and ostentatious spending, along with a slowing Chinese economy.

Nektan Delivers Trading Update

Appoints new interim CEO

Nektan PLC reported strong fourth quarter results in a trading update that also detailed the appointment of former Mansion Group CEO, Sagi Lahav, as the company’s new interim chief executive officer, effective July 3, 2017.

Nektan reported it continues to experience strong growth in its Managed Gaming Solutions (Europe) business across all key performance indicators, driven by a combination of increased First Time Depositors, ongoing product innovation and the launch of 9 new casinos in the quarter.

“Year on year revenue growth of 130 percent reflects substantial organic growth and is accompanied by an improvement in the cost of sales through effective casino management,” a company statement reads.

Other key performance highlights include:

Net gaming revenue amounting to GBP 4.2 million (Q4/2016: GBP 2.0 million), up 110 percent

First time depositors, up 164 percent to 42,429.

Cash wagers amounting to GBP 118.7 million (Q4/2016: 48.5 million), up 145 percent.

Nektan’s B2B Europe business has extended its games licensing partnership with Spin Games LLC to include a selection of gaming titles from Konami and three other unnamed third party developers.  The company plans on publishing its first games on its managed casino network via Spin’s Remote Gaming Server (ROC) during the first quarter of 2018.

Respin, Nektan’s US subsidiary, continues to develop and expects to launch its Rapid Games mobile solution in its first US casino in the next quarter.

Gary Shaw, Interim Chief Executive Officer of Nektan, said:

“We continue to make progress across our three divisions. I am especially encouraged by the progress of the European managed casino network which is benefiting from the hard work of our team, our casino partners and the strong technical foundation of our proprietary platform, Evolve. Revenues have grown by 130% over the last year, whilst our cost base has reduced, providing a more financially efficient platform from which to grow.

“Our younger B2B division is attracting a lot of interest from games studios, offering distribution and services under our Gibraltar gambling licence. In a significant step forward, our North American team is installing an operating multi-tenant solution in its first, central casino location.

“This is an exciting period for Nektan and I’m delighted to be working with Sagi and the rest of the team to develop fully the potential opportunities across the whole of our business.”