Regulated markets and mobile drive NetEnt Q1 growth
Revenues up after successful launches in Denmark and Italy " CEO says looking to expand UK operations.
Swedish software provider Net Entertainment has reported strong growth for the period from January to March 2012 driven by strong uptake of the company’s mobile product and new legislation in Italy and Denmark.
The group saw operating revenues increase by 33.9% year-on-year, up from SEK95.2m to SEK127.5m (£11.7m), with the number of game transactions soaring to 3 billion, up 58% from the corresponding period in 2011.
This growth was aided by changes to Italian legislation which saw online casino regulated in February last year and launched in August. NetEnt revealed that Italy, despite the lack of legalised online slots, has since become the group’s third-largest market after Sweden and Norway though the group did not break down revenue by territory.
The opening of the Danish market in January this year also impacted positively on NetEnt’s revenues for the quarter with five customers launching “ Unibet, Bet24, Betsson, Scandicbookmakers and Danbook “ and an additional agreement signed with an existing, unnamed client.
Mobile growth has also accelerated with the business signing 14 new clients to its mobile p’latform NetEnt Touch, three of which have gone live. This follows the launch of two new mobile slots last week alongside the two slots already live on the platform and blackjack and roulette offerings.
After posting a 5% drop in operating profit in its full-year results NetEnt recovered strongly to post a 52% year-on-year rise for the quarter, up from SEK26.3m to SEK40.1m, while profit after tax rose 51% to SEK36.4m. This came despite a rise in operating expenses, which grew 27% to SEK87.4m due to expansion into new markets, and increased investment in sales, product management, development, and IT operations.
NetEnt chief executive Per Eriksson, who joined the company in March, revealed that the company is now looking to build its UK presence. The group’s software is set to go live on SkyBet in the coming weeks, and Eriksson announced that the “positive discussions are ongoing” with several operators.
“The sales and integration process is complex and certain adjustments are needed on Net Entertainment’s platform in order to be able to integrate with the operator’s IT architecture. This development work is expected to be completed during the second half of 2012.
“With new games under development in combination with ongoing strategic initiatives, Net Entertainment has a solid position going into an exciting future,” Eriksson explained.