20th Jul 2015 11:00
LONDON (Alliance News) - Panmure Gordon reduces its revenue and earnings before interest, tax, depreciation and amortisation forecast for Nektan's full financial year 2016, after the mobile gaming company Monday said that delays to investments held back revenue growth in the financial year 2015.
On Monday, Nektan said that net gaming revenue for the financial year 2015 is expected to be around GBP0.5 million, while its adjusted Ebitda loss should be better-than-expected at GBP5.5 million.
Panmure Gordon analyst Adam Lawson says that while Nektan's guided Ebitda loss for financial 2015 is in line with its expectations, funding delays, which held back the timing of investment and the rate of revenue growth, have caused him to reduce his revenue forecast for financial 2016 to GBP16.4 million from GBP36.0 million.
The broker has also reduces its Ebitda estimate for the financial year 2016 to a GBP0.5 million profit from GBP2.8 million, but Lawson says he is encouraged by news of strong progress in Nektan's Real Money Gaming activities and from the Respin joint venture with Spin Games in the US.
"While the push of revenues and profits to the right is frustrating, we are highly encouraged by the progress the business has made both in terms of commercial traction and proving of the business model. In our view, the focusing of investment on RMG and Respin makes absolute sense given the scale of the opportunity presented by both markets and the early momentum that has been gained," Lawson writes.
Nektan is a "delayed bet, but hand still strong," Panmure says.
Panmure Gordon keeps its Buy recommendation on Nektan but lowers its price target to 278 pence from 374p.
Shares in Nektan were untraded on Monday, last trading at 167.00 pence.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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