Nektan claims it's close to breaking even

Nektan was doing its best to convince investors it was close to positive EBITDA, as it updated the market on its trading ahead of the release of its first half results.

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The AIM-traded B2B mobile gaming platform and content provider saw total revenue for the six months to 31 December 2015 grow to £1.6m, from £0.25m a year earlier.

Its adjusted EBITDA performed comparatively poorly, however, growing to a £3.6m loss, from a £2.36m loss in 2014.

At period end, Nektan had total cash of £1.35m.

During the period, Nektan's US joint venture Respin performed strongly and had 54 existing or pending contracts with tribal and commercial casino operators, up from nine a year earlier.

It also became the first company to be approved by Apple for mobile in-venue gaming within the United States.

In its European operations, the company saw at least 32% compound monthly growth in overall net gaming revenue during the period.

Nektan's board did say that a delay in the acceleration of a particular large contract, anticipated to be worth £7m in the current year's net gaming revenue, would have a significant impact on group revenues and EBITDA with the accelerated launch now expected towards the end of the current financial year.

"Nektan has a very strong and strengthening strategic position in the US through our Respin venture and a fast growing European business", said non-executive chairman Jim Wilkinson.

"With a reduced cost base and the high growth rates being achieved, we believe that the company will start fulfilling its undoubted potential", he added.

Post period end, Nektan did take significant action to reduce its ongoing monthly cost base by 45% to £270,000 by April 2016, which would lower the level of monthly net gaming revenue at which the company would be EBITDA positive.

Nektan's board now expected to reach an EBITDA break-even monthly run rate late in the second half of the financial year.