UK becomes NetEnt’s biggest market as regulated focus pays off
Provider’s FY revenues up 28% with increasing scale driving improved profit margin
NetEnt this morning reported a 29% rise in full year revenues for 2016, with the firm hailing its regulated markets strategy.
Revenues hit £131m, with operating profits up 28% to £14m with an operating margin of 38%.
”2016 was another exciting year for NetEnt with new record levels in revenues, earnings and cash flow,” NetEnt CEO Per Eriksson said.
“Great Britain continues to offer great growth potential for us and in December, it became our largest geographical market for the first time.”
The firm also picked up new licences for regulated markets in Romania, Bulgaria and Portugal.
The Q4 figures were similar to the full year’s, with revenues up 24% to £36m and profit up 28% to £14m.
“The fourth quarter developed well, compared to the very strong fourth quarter of 2015,” Eriksson said. “The operating margin improved to 39%, mainly due to better scalability in the business.
“We also took our first step into Latin America by extending our partnership with Codere to include the regulated online casino market in Mexico.”
Looking forward, Eriksson said the Q1 2017 results would be relatively flat compared to Q4 2016, but he predicted “solid growth” thereafter, thanks to US expansion and growing market share in the UK.
Eriksson added: “We increase the number of employees, enhance our product offering and integrate more customers on new regulated markets.
“With this in mind, we foresee higher costs and an ongoing need to invest during 2017. These are all projects that will enable continued solid growth for NetEnt going forward.”
The NetEnt share price was virtually unchanged at 76 SEK in early trading.