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After surviving a difficult Q2 trading season that included challenging European ‘mature market’ regulatory adjustments, Catena Media has maintained its year-to-date growth trajectory.
Catena reported YTD revenues of €71 million in its 2021 interim results, up 31 percent from corresponding 2020 results of €54.5 million.
In the first half of the year, it maintained its ‘forward momentum’ in the growth markets of Japan and North America, with revenue growth of 121 percent in US trade accounting for 49 percent of YTD group sales.
Despite difficult Q2 trade, which was hampered by German regulatory adjustments as well as Italian Google PPC and COVID-19 limits, Catena’s revenue slowed to €30.3 million, a 9 percent increase over the previous year (Q2 2020: €27.7 million).
Despite Catena’s network benefitting from strong Euro 2020 trading, including a 32 percent rise in new depositing clients (NDC) to 140,000 (Q22020: 104,000), group EBITDA declined by 3 percent to €12.6 million (2020: €13 million) due to headwinds in Q2.
Unclear market impact of new rules
Catena CEO Michael Daly revealed how he keeps investors up to date: “In Europe, Germany will remain a problem child for some time to come due to a lack of clarity surrounding the market impact of new regulations.
“Nevertheless, as operators acclimatise to the restrictions and obtain operating licences, affiliates will gain fresh market access and I see Germany becoming a good market for Catena Media in the next couple of years.”
Catena’s search revenues increased by 34 percent to €67 million (YTD2020: €50 million), while paid media sales remained unchanged at €4.3 million (YTD2020: €4 million). Due to Catena’s divestiture of its Hammerstone business in Q4 2020, subscription services generated no revenue.
Catena’s PPC spend increased to €7 million, while its labour expenditure increased to €15 million, bringing the group’s YTD expenses to €40 million (YTD 2020: €35 million).
Catena reported a YTD EBITDA of €40 million in its interim statements, up 44 percent over the €28 million reported in the same period last year.
Pleased with financial results
Daly added: “I am exceptionally pleased with the group’s financial results for the second quarter, in which we surpassed last year’s revenue by 9 percent and lifted adjusted EBITDA by 1 percent.
“This outcome represents a notable achievement considering the one-off spike in casino gaming seen in the second quarter of 2020, when COVID-related lockdowns sparked an unprecedented surge in consumer interest and player activity.
“The results demonstrate the robustness of our business model as they came in the face of low seasonal sports activity in the US, the re-opening this year of land-based entertainment venues in North America and other locations, and a sharp increase in product investment in Q2 compared to the same period last year. These factors together explain the expected drop in quarter-on-quarter revenue and EBITDA.”
Catena’s YTD operating cash flow improved by 30 percent to €37 million as it navigated its European challenges, helping the firm strengthen its balance sheet to €372 million in total assets.
In terms of H2, Catena management expects a big contribution from its new Lineups.com asset, which was purchased for €11.2 million in May to help the company prepare for the start of the new NFL season in September.