Nektan announces new sites and revenues up 14.8% during FY19

Jamie Gordon
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Nektan announces new sites and revenues up 14.8% during FY19
Gaming technology platform Nektan PLC (LON: NKTN) have seen their full year revenues growth in its B2C and B2B segments, and a record number of partners live in the fourth quarter. Despite the impact of UK taxation and player verification – which affected the Company in Q3 and Q4 – the Group’s full-year revenue still grew 14.8% on a year-on-year basis. The Company attributed this to strong growth in the sales pipeline of its B2C and B2B sectors. B2C announced the launch of 13 new white label casino sites during the fourth quarter, along with its first mobile bingo offering. B2B noted 12 live partners, up from 10 for Q3. The segment also announced the release of Volt Casino and MoPlay, as well as entry into the African continent with betting companies Betika and BetLion. The number of game providers in Netkan casino platforms has increased to 42 in Q4, from 38 in Q3. Four new games have been developed with partners Rocksalt Interactive and ReelFeel.

Nektan comments

Lucy Buckley, Chief Executive Officer, said,

“With an established proprietary technology platform and growing sales pipeline, Q4 has seen us go live with more B2C and B2B partners putting us in a strong position to accelerate our growth and increase revenues further over the course of FY20.”

“In the B2B division, we continue to make exciting progress; our pipeline of opportunities is continuing to develop and has seen engagement with an increasing number of larger market participants globally. We expect a number of these to go live during the remainder of 2019, which has the scope to have a transformational impact on our business.”

“Whilst Q4 saw a continuation of the B2C trading conditions we experienced in Q3, we have taken decisive action to structure the Company in response to the changing gaming environment and to provide the strategic platform for expansion and growth in international markets. Furthermore, a number of steps to enhance our product offering, including the launch of bingo and improved player journeys, have been completed in Q4 and we look forward to the new financial year with optimism.”

Investor notes

Perhaps led by recent regulatory conditions, Nektan shares struggled today, down 3.41% or 0.35p to 9.90p a share 31/07/19 13:34 BST. The Group’s p/e ratio and dividend yield are currently unavailable, their market cap is £10.91 million. Elsewhere in the tech sector, there were updates from; Keywords Studios PLC (LON: KWS), Biome Technologies plc (LON: BIOM), Midwich Group PLC (LON: MIDW) and Boku Inc (LON: BOKU).

SMMT: UK car productions drops over a fifth and Brexit costs grow

Dina Caruso
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SMMT: UK car productions drops over a fifth and Brexit costs grow
British car manufacturing output fell by over a fifth in the first half of 2019, according to new data revealed on Wednesday by the Society of Motor Manufacturers and Traders (SMMT). Car manufacturing output declined by 15.2% in June, making it the 13th consecutive month of negative growth. Additionally, the industry body said that at least £330 million has already been spent by the sector on Brexit contingency plans. The money has been spent on stockpiling materials and components, securing warehousing capacity and investing in new logistics solutions, additional insurance and training in new customs procedures, said the SMMT. Equally, inward investment into the sector practically stopped in the first half of the year, as newly pledged investment was down over 70% to £90 million. “Today’s figures are the result of global instability compounded by ongoing fear of ‘no deal’. This fear is causing investment to stall, as hundreds of millions of pounds are diverted to Brexit cliff-edge mitigation – money that would be better spent tackling technological and environmental challenges,” Mike Hawes, SMMT Chief Executive, commented on the data. “The industry’s foundations are fundamentally strong, however, and we’re ready to work with the new government to build on these through the industrial strategy. We need an internationally competitive business environment to encourage more investment, more innovation and more growth,” Mike Hawes continued. “That starts with an ambitious Brexit deal that maintains frictionless trade and we look to the new administration to get a deal done quickly so manufacturers can get back to the business of building cars and helping deliver a brighter future for Britain.” In June, the Chief Executive of SMMT said that a no-deal Brexit is “not an option” now for the automobile sector. Automotive manufacturing delivers £18.6 billion to the UK economy each year, making it one of the nation’s most important economic assets. The success of the sector, however, is dependant on a free and frictionless trade with the European Union. Leaving the union without a deal will lead to the imposition of tariffs, the SMMT added, costing roughly £4.5 billion a year. Just last week Boris Johnson won the Conservative leadership race, becoming the new Prime Minister. But will he be able to agree on a deal before the nation’s Halloween departure date?

Pound takes breather as backstop impasse continues

Jamie Gordon
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Pound takes breather as backstop impasse continues
After falling 2.78% against the Euro and 2.63% against the Dollar in the past week, the Pound appears likely to continue its slide with persisting political uncertainty between the UK and EU, as well as domestically in the UK. Despite rising slightly today, any rally is likely fleeting; with Sterling dropping to a two-year low against the Euro at 1.0888 yesterday, and a two-year low against the Dollar at 1.2164. This forward looking pessimism is corroborated by market analysts today, after a phone call between incumbent UK prime minister Boris Johnson and Ireland’s Taoiseach Leo Varadkar, which did little but confirm a lack of progress in discussions on the Irish backstop and ultimately on the Withdrawal Agreement. In a statement, a Downing Street official stated the following, “The prime minister made clear that the UK will be leaving the EU on October 31, no matter what,” The prime minister told his Irish counterpart that any deal would hinge on the removal of the Irish backstop, and that the UK would not impose any physical restrictions on Irish goods. “The prime minister made clear that the government will approach any negotiations which take place with determination and energy and in a spirit of friendship, and that his clear preference is to leave the EU with a deal, but it must be one that abolishes the backstop,” Downing Street said. “The Taoiseach explained that the EU was united in its view that the Withdrawal Agreement could not be reopened,” the Irish government said. “Alternative arrangements could replace the backstop in the future… but thus far satisfactory options have yet to be identified and demonstrated,” the Irish government said.

The Pound Forex outlook

Based on today’s correspondence, the macro, and micro political climate, the market’s outlook on the Pound is bleak. Responding to the news and looking ahead, CEO of financial advisory service de Vere, Nigel Green, said the following, “The pummelled Pound is going to continue to be battered either way in the short to medium-term under Boris Johnson or Jeremy Corbyn, says the CEO of one of the world’s leading financial advisory organisations […] There is no end in sight to the embattled British pound’s plight with both the current Prime Minister Boris Johnson and the leader of the official opposition Labour Leader Jeremy Corbyn promoting policies that will deliver fresh – and serious – blows to the currency.” “Should the UK leave with no-deal, the Pound can be expected to remain weak for several years until the country and the bloc readjusts […] In addition, many observers predict that there will be a general election before the end of the year. All by itself this too will create uncertainty and therefore turbulence for Sterling.” He finished his statement with the following declaration, “should a Corbyn-led Labour party win that election, there will be even more bad news for the Pound. His anti-business rhetoric, and high tax and low-profit policies would lead to considerable and sustained selling of the Pound.” So, the focus is not solely on Brexit. Markets are fearful of Johnson’s do-or-die approach and are equally, if not more afraid, of the potential realisation of Corbyn’s seeming lack of interest for preserving the market status quo. Any movement in the Sterling will dependent on Boris’s progress in negotiating a deal – or lack thereof. Should a no-deal scenario become a reality, the UK can only hope to emulate the rally in exports witnessed in 2016, and hope more is done by small business to make the necessary preparations for uncertain market conditions.  

Keywords Studios H1 performance weighed down by investment

Jamie Gordon
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Keywords Studios H1 performance weighed down by investment
International video gaming technical and creative services provider Keywords Studios PLC (LON: KWS) saw revenue growth of up to 33% across all seven sectors of its business; however its end of period results in H1 were weighed down by investment in testing operations and four acquisitions. The Group’s revenues were up c.39% on a year-on-year basis, up from €110.0 million for H1 2018 to €153.1 million for H1 2019.

The Company’s two largest sectors witnessed the best performance. The Functional Testing and Game Development service lines represented a total of 39% of pro forma Group revenues. Profit before tax increased 15% on-year, from €16.0 million for H1 2018 to €18.4 million for H1 2019.

This performance was offset by expansion costs and investement in early stage businesses acquired in 2018, which are now approaching commercial launch. Keywords Studios also established Functional Testing operations in Katowice, Tokyo and Mexico City, as well as Localization Testing in Katowice and Player Support in Mexico City. The Company’s net debt was up from €0.1 million at 31 December 2018, to €9.0 million at 30 June 2019. This was led by its four acquisitions which totalled €7.0 million. Keywords Studios comments

Andrew Day, Chief Executive, stated,

“We were pleased by the strong performance of the Group in the first half, incorporating as it does the anticipated lower growth VMC business acquired in October 2017. Particularly steep increases in activity of some of our service lines in the first half required us to invest rapidly in expanding capacity to meet that demand. As we move into the second half, we expect to be able to leverage that investment to the benefit of margins in the second half.”

“Demand from new game streaming services has continued to drive volume increases for us, and we continue to benefit from clients increasing the number of services acquired from Keywords with 113 clients now taking 3 or more services (99 as at 31 December 2018). I’m particularly pleased with the progress in building our Game Development services which we first entered only two years ago and, with further acquisitions still to come, is well set to become our largest service line by revenue.”

“We continue to review a healthy pipeline of acquisition candidates in line with our strategy to build our business both organically and through acquisition. The new, enlarged banking facility will give us the flexibility and headroom to deliver that strategy and further enhance shareholder value.”

Investor notes

With a warning that the Company’s profits would be weighed towards the second half, their shares dipped 2.74% or 47.00p to 1,669.00p a share 31/07/19 12:25 BST. Liberum Capital analysts downgraded its stance from ‘Buy’ to ‘Hold’, and Peel Hunt reiterated their ‘Sell’ rating on Keywords Studios stock, having previously downgraded it from ‘Hold’. The Company’s p/e ratio is currently 39.17 and their dividend yield stands at 0.10%. Elsewhere in the tech sector, there were updates from; Biome Technologies plc (LON: BIOM), Midwich Group PLC (LON: MIDW), Boku Inc (LON: BOKU) and Telit Communications Plc (LON: TCM).

Intu shares plummet as tough retail environment weighs

Dina Caruso
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Intu shares plummet as tough retail environment weighs
Intu posted a deeper loss before tax on Wednesday in its half year results as changes to the retail environment weigh. Shares in the business were trading over 23% lower following the announcement. The shopping centre landlord said that loss before tax deepened to £856.4 million during the six months ended 30 June, down even further from the £506.5 million figure for the same period in 2018. Net rental income decreased by 17.9% to £205.2 million, and 7.7% on a like-for-like basis. Intu added that it expects this decline to run at a similar level through the remainder of the year as the impact of recent administrations and CVAs are resolved. In order to reduce net external debt, the company has been forced to cut its dividend for 2019. “The first half of 2019 has been challenging for intu. We have experienced further downward pressure on like-for-like net rental income and property values resulting from a higher level of administrations and CVAs as some retailers struggle to remain relevant in a multichannel world,” Matthew Roberts, Intu Chief Executive, commented on the results. “These challenges, facing intu and the whole sector, have been well-documented and, while there are no quick fixes, I am confident that we can address them head on. Over the past nine months we have carried out the most comprehensive review of the business that intu has ever undertaken,” Intu’s Chief Executive continued. The shopping centre landlord drew upon recent concerns surrounding the “death of the store” as consumers seek online shopping alternatives to brick-and-mortar shops. Intu affirmed “the right stores in the right locations still play a vital role for retailers” as 85% of all retail transactions still touch a physical store. Indeed, the challenging retail environment to have hit the UK high street has been well documented by several retailers as they see staff cuts and store closures. “We know radical transformation is required and have developed a new, ambitious five year strategy to reshape our business and address the challenges we face, with a priority to fix our balance sheet. With the people changes we have made, we now have the right leadership team in place with the appropriate skill sets to deliver this plan and drive the business forward,” Intu’s Chief Executive added. Shares in Intu Properties plc (LON:INTU) were trading at -23.46% as of 11:56 BST.

Intelligent Ultrasound Group develops AI software in H1

Jamie Gordon
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Intelligent Ultrasound Group develops AI software in H1
AI based ultrasound software and simulation company Intelligent Ultrasound Group PLC (LON: MED) saw increased sales and testing of its new AI based offerings within its IU Simulation Division and IU Clinical AI Division during the first half of 2019. As the first half ended, the Company signed its first long-term licence and co-development agreement for their AI software with a leading ultrasound equipment manufacturer. The Intelligent Ultrasound Group also formed an alliance with Mediscan Systems to use AI and simulation to improve patient care in India and develop the Group’s ultrasound scan image library.

The IU Simulation Division saw sales up 24% on a year-on-year basis – from £2.5 million for H1 2018 to £3.1 million for H1 2019 – driven by North American revenue contribution. The Group also performed the first demonstration of their ScanNav AnatomyGuide to clinicians.

The Company’s cash balance dipped from £5.6 million to £3.5 million on-year for the first half.

Intelligent Ultrasound Group comments

IUG Chairman Riccardo Pigliucci, said, “This has been an excellent first half of the year, with Simulation Division sales increasing by 24% and excellent progress made by our Clinical AI Division, which recently announced the signing of the its first long-term agreement with a major ultrasound machine manufacturer, which could be transformational for the Group. We look forward to continuing growth in Simulation sales and winning additional contracts with original equipment manufacturers for our growing range of AI based image analysis software.” This update followed the Group’s change to AI led tech and a name change in January. Commenting on the change, the Chairman said, “The Board believes that the new name reflects the fact that the Group is no longer just a global leader in ultrasound training through simulation, but has expanded into the development of artificial intelligence (AI) software to guide and support doctors and sonographers in clinical ultrasound scanning.”

Investor notes

The Company’s shares are down 4.35% or 0.50p to 11.00p a share 31/01/19 08:22 BST. The Group’s p/e ratio and dividend yield are currently unavailable, their market cap is £18.01 million. Elsewhere in the tech sector; Sophos Group plc (LON: SOPH), MiriAd Advertising plc (LON: MIRI), Zoo Digital Group plc (LON: ZOO) and Vela Technologies Plc (LON: VELA).

Just Eat posts 98% drop in half year profits

Dina Caruso
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0
Just Eat posts 98% drop in half year profits
Just Eat (LON:JE) posted a sharp fall in pre-tax profits on Wednesday in its half year results, but shares remained in the green. The results come just days after the business announced it had agreed in principle on the key terms of an £8.2 billion all-share deal with its rival Takeaway.com. For the six months to 30 June, Just Eat’s pre-tax profit amounted to £0.8 million, down 98% from the £48.1 million figure posted a year prior. The 98% decline in pre-tax profit reflects its planned investments in delivery and iFood, Just Eat said. The food delivery company added that half year revenue came to £464.5 million, up 30% compared to the first half of 2018. Just Eat saw a recovery in UK order growth to 11.2% in the second quarter, giving 9.3% order growth for the first half. European markets showed good growth, with strong order performances in Italy and Switzerland. Moreover, Australia returned to revenue and order growth in the second quarter, and Canada was profitable in the first half with continuing positive order momentum. Marketing costs amounted to £83.8 million, up from the £68.8 million figure recorded for the first half of 2018. https://platform.twitter.com/widgets.js The company recently revealed that it will be offering delivery from Gregg’s stores through its service.
“We’ve been working at pace and made good progress in the first half of the year to become the preferred food delivery app for our customers, with a broader choice of restaurants, a better user experience and a more personalised and impactful approach to communication,” Peter Duffy, Interim Chief Executive Officer, commented on the results.
“Performance in our UK business strengthened in Q2, our Canadian and European businesses are performing well and Australia has returned to top line growth with our delivery operations achieving gross profitability. These are strong foundations for Just Eat to build on, as the business continues to drive forward,” Peter Duffy continued.
Shares in Just Eat plc (LON:JE) were trading at +2.4% as of 11:02 BST Wednesday.

Nationwide: UK house price growth slows in July

Dina Caruso
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Nationwide: UK house price growth slows in July
UK house price growth remained subdued in July, new data from Nationwide revealed on Wednesday. Annual house price growth remained below 1% for the eighth month in a row in July, with the monthly rise at 0.3%. House prices also increased by 0.3% when compared to the same period a year earlier. In June, Nationwide data showed a house price growth of 0.5% compared to June 2018.
“While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months,” Robert Gardner, Nationwide’s Chief Economist, commented on the data.
“Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable,” Nationwide’s Chief Economist continued.
“Housing market trends will remain heavily dependent on developments in the broader economy. In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.” Indeed, as the nation’s departure date from the European Union approaches, the possibility of leaving without a deal is creating uncertainty among consumers. Just last week, Boris Johnson won the Conservative leadership contest, becoming the new Prime Minister of the UK. But how will the new Prime Minister lead the nation out of the European Union in a way that does the least harm to British business in the long-run?
“Taking a longer-term view, housing market activity has been broadly stable in recent years, with the number of properties changing hands equal to around 5% of the total number of homes in the UK,” Nationwide’s Chief Economist added.

Aston Martin posts half-year loss, shares plunge

Dina Caruso
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2
Aston Martin posts half-year loss, shares plunge
Aston Martin (LON:AML) posted a pre-tax loss on Wednesday in its half year results, sending shares down. Shares in the luxury sports car manufacturer were trading over 18% lower following the announcement. Founded in 1913, Aston Martin is one of the UK’s most iconic brands and has become synonymous with James Bond. In its half year results for the period ending 30 June, Aston Martin made a pre-tax loss of £78.8 million, swinging to red from the £20.8 million pre-tax profit it had made during the same period the year prior. Last week, Aston Martin issued a trading update in which it cut its sales and profit expectations for the financial year. The warning highlighted the challenging global macro-economic environment that was impacting the business. “As described in our trading statement on 24 July, both our retail and wholesale volumes have increased year-on-year,” Dr Andy Palmer, Aston Martin Lagonda President and Group CEO, said in a company statement. “However, we are disappointed that our projections for wholesales have fallen short or our original targets impacted by weakness in two of our key markets as well as continued macro-economic uncertainty. Accordingly, we have taken action to reduce wholesale guidance for 2019. We are also improving efficiency across the business, whilst protecting the brand,” the President and Group CEO continued. “With the UK’s exit from the European Union imminent, we have enacted our plans to ensure operational readiness for the supply of parts and cars. We remain focused on execution of the Second Century Plan, financial discipline, long-term sustainable growth and ensuring we have the right funding structure in place. The strength of our brand underpins our confidence in the long-term opportunities ahead.” Shares in Aston Martin Lagonda Global Holdings plc (LON:AML) were trading at -18.56% as of 09:43 BST Wednesday.

Fastjet revenues rise and losses narrow during first half

Jamie Gordon
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2
Fastjet revenues rise and losses narrow during first half
British-South African low-cost airline holding company Fastjet PLC (LON: FJET) have seen their share price dip during Tuesday trading despite narrowing their first half losses and widening their revenues on a year-on-year comparison. The Company’s revenues grew from little under $14.5 million to over $19.7 million; revenues from Fastjet Zimbabwe grew 19% to $12.1 million. Losses after tax narrowed from $14.6 million to just under $4.5 million. Further, the Group announced that operating expenses were down $0.7 million on-year, and revenue per passenger was up 38% on the previous year.

Fastjet comments

Commenting on the results, Chief Executive Officer Nico Bezuidenhout said,

“It is pleasing to note the improved results for the first half, seasonally the weakest period of the year, as they illustrate the positive impact the Company’s stabilisation efforts have had on the financial performance of the business.”

“Key metrics such as revenue per available seat kilometre showed a year-on-year improvement of 39% in H1 2019; this is now 140% higher than the corresponding period in 2016.”

“In addition to our improved financial results we were also pleased to win again Best Low-Cost Carrier in Africa at the Paris Air Show last month, demonstrating our continued commitment to delivering exceptional service for our customers.”

“Whilst the stabilisation process, now concluded, was no-doubt painful, it is encouraging to see the benefit in improved financial results and a stronger foundation for the future. I would like to thank our shareholders, employees, suppliers and customers for their continued support over the past year.”

Investor notes

The Company’s shares closed down 1.69% or 0.025p at 1.45p a share 30/07/19 16:30 BST. Its p/e ratio and dividend yield are currently unavailable, its market cap is £56.06 million. Elsewhere in aviation, there have been updates from; John Menzies plc (LON: MNZS), Wizz Air (LON: WIZZ), Thomas Cook (LON:TCG) and Ryanair Holdings Plc (LON:RYA).
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