Slow Growth forces NetEnt to “take action”

Therese Hillman, NetEnt Online Casinos new CEO claimed that the software developer is taking action to rise from a disappointing second quarter in which revenue growth was subpar. The reason for this was the slowdown that happened in the UK and NetEnt will be doing everything in their power to do better in the third quarter. This news was definitely not good for casinos like William Hill and Betfair who use NetEnt’s games but things will surely improve in the following quarter.

For the NetEnt Online Casinos Q2 report, NetEnt claimed that they had a 6% rise in year-on-year revenue up to (£39m/€44m/$51m). Their earnings before tax grew by only 1.2% while they suffered a 0.8% decline in euro terms. During a conference call, Hillman admitted that the UK market is a challenging one and that the slowdown there is the main reason for the weak quarter.

Hillman also added: “We need to grow our live casino and have more growth initiatives to kick in.” Surely BGO, Rolla, PowerSpin, and other casinos whose game majority comes from NetEnt will be happy to hear that. On top of that, Hillman mentioned that their markets in southern Europe are doing much better compared to the UK. Nevertheless, she also admitted that the World Cup had a great impact on the company’s performance and that without it the numbers would have been even lower.

According to Regulus Partners, the problems that NetEnt Online Casinos is experiencing are twofold. First, the Northern European markets which are key for them are maturing, making serious growth almost impossible. Second, mobile-led businesses have been growing rapidly which has shattered the supply-chain. There are tons of suppliers and operators right now and to be successful a company must be more agile, more efficient, more innovative, and more relevant.

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