Lucy Buckley has resigned as Nektan CEO 10 months after her appointment was announced, with the company currently reviewing its leadership structure.
Shaw, who once again takes over as Interim CEO, has told Gambling Insider the company’s growing international focus was the main reason behind Buckley’s departure. Read our Q & A below:
Is there anything you can tell us outside what was discussed in your initial press release about Lucy’s departure?
Lucy’s been very good at helping with a very challenging UK market. Who knows what kind of events will occur in the UK market, with the potential ban on credit card gambling and also restrictions on stake levels? Lucy has been very helpful in the UK but, I’ll be frank with you, one of the things happening to our business is it is growing quite rapidly internationally. That’s something I’ve been involved in for quite a while, spending time in Taiwan, Africa and Latin America. The returns there are way higher as a technology supplier than a B2C white label in the UK.
We won’t abandon the UK as we have a very good business there. But the truth is we see returns in terms of partners moving quickly into markets where you have hundreds of millions of people as opposed to 11 million, like in Sweden. We’ve got a partner in India with a database approaching 26 million people. So I think what’s happened is Lucy has done a good job in terms of looking at what we can do in the UK market. The reality is our international expansion plan is where we’ll be spending most of our time. That isn’t really UK-centric, where Lucy is based.
It was one of those interesting conversations where we’re going to be spending 80-90% of our technology elsewhere in the next six to nine months. The big markets for us are going to be India, Taiwan and Africa. Our Africa business is our fastest-growing business. The Playtechs are much more accustomed to a GVC account than an operator in Kenya, for example. We are much more suited to newer operators who need to get to market quickly. So I think Lucy felt she probably had a little less to offer in that area, as our company moves to markets like India and Africa, where we’ve seen our growth.
Bearing this international development in mind, what qualities are you looking for in Nektan's next CEO?
What we’re going to do is look at what we might do to split the role between Asia and Europe. We may have somebody that focuses very much on Europe and we may have someone who focuses on Asia; we’ve got a very strong leader in Jaydeep Chakravartty. He’s a very, very solid operator. I think what we probably need is someone in Europe to play a similar role, knowing in the medium to long term, it probably won’t be as big a business. Playtech is so ingrained across Europe so it’s hard to compete with them. But in some of these emerging markets, it’s all mobile, it’s all speed and we have a lot more content to offer.
What kind of partners are you looking for in these international markets?
We’re looking at people we think in the medium term will become license holders. We’re really looking at where there’s a large populous and where we can apply our technology quite quickly. We don’t want to get stuck into too big a cycle in terms of time of contract and things like that. We’ve got one partner launching in India in September and we’ve only known them a few weeks.
Our focus is going to stay on casino; we have partners who want us to supply sports but we would do that in conjunction with someone we already work with – we’re integrating into BetVictor and other people. We’re seeing the globalisation of our business going far quicker than we saw even four months ago.
To be honest with you, it’s a hard fight in the regulated market. I’m not sure anyone’s even making money anymore in Sweden, based on the cost per acquisition (CPA). The CPA in India is currently very low compared to a much higher return. It’s not like the UK, where CPAs are constantly going up.
How confident are you Nektan’s next financial report will show improved results?
I think we’ll focus more on improving our B2B line. We’ll probably report numbers that are similar but with actual retained margins going forward. We make four times more with a solution we’ve got in India than we do in the UK. We’re making 12 pence ($0.14) in the pound in the UK; we’ve made 40 odd pence in the pound in India with a similar solution. That gives you a scale of the magnitude of the difference in what we get as a return. Let’s say you make £100,000 top line, you’d retain £40,000, whereas in the UK you’re retaining around £12,000.
Top line probably won’t grow as much but we will become a far more profitable business. We want to really scale that into large populous markets, such as Tawain. We’ll see improvements in some areas; it’ll look odd from the outside because you’ll see the business is a bit flat. But what we’re doing is focusing on where we get a much bigger return. Everyone knows turnover’s vanity and profit’s sanity.
