Raketech lauded strong operational development driven by the launch or enhancement of several initiatives during the second quarter of the year, resulting in stable performance on the product portfolio.
The online affiliate and content marketing firm saw Q2 revenue increase from €5.7 million year-on-year by 24.1 percent to €7.02 million in the expected sporting drop-off.
This represents a geographic split of 81 percent in the Nordics and the remaining 19 percent across other global jurisdictions, with the company’s casino segment accounting for 89 percent of total revenue, eight percent ‘sports’ and three percent ‘other.’
This increase in performance is associated with a pair of acquisitions, firstly the purchase in August 2019 of Casumba Media, a Maltese licensed media company with operations mainly in Japan, as well as Lead Republik, acquired in March for €1.4 m and praised as improving its offering in New Zealand and Canada.
Operating income for the quarter dropped 22.8 percent to €1.53 million (2019: €1.98 million) and adjusted EBITDA dropped 2.3 percent to €2.82 million (2019: €2.89 million), organic growth was negative 1.2 percent with Raketech ‘s casino portfolio, led by properties in Norway and Sweden, partially mitigating the sports industry risk.
However, operating profit and adjusted EBITDA decreased 39.4 percent and 14.5 percent respectively to €2.89 million (2019: €4.78 million) and €5.45 million (2019: €6.38 million), respectively, for the first half of the year revenue amounted to €13.5 million, a 12 percent increase from €12.1 million.
Raketech CEO Oskar Mühlbach commented: “As expected, we witnessed a significant drop within our sports related products due to COVID-19 and we experienced decreased traffic to these assets as an effect of cancelled sport events. This is something we expect, and to some extent already are able to witness, will regain traction again once sports return back to normal.
“In addition, we could see that June slowed down even for our casino assets, mainly due to seasonality but also to some extent due to hesitance towards marketing investments from the operators, awaiting the new temporary Swedish regulations coming into force on July 2.”
Outlining a variety of the above-mentioned programs established and delivered during the quarter by the company, Raketech stipulates that the U.S. is to form a core community sector.
In preparation for the launch of its TV-Sports Guide to the American audience in Q4, Raketech, which saw Colorado approval gain the country ‘s third license, highlights a continuing goal to move the US from a strategic target to a strategic market in 2020.
Mühlbach concluded his address as CEO by outlining the future outlook for the group: “Revenues for July amount to €2.4m, despite sports still trailing behind due to COVID-19. Activity was high, following the temporary re-regulations on the Swedish market, as many players sought to open new accounts following the 5,000 SEK per week deposit limit.
“Despite us significantly increasing our revenues from outside the Nordics to close to 20 percent, the volatility on the Swedish market due to the re regulations makes it challenging to navigate. The unpredictability mentioned in the previous report is still very much present even though our dependency on this market is lower.
“And depending on the market development on our existing markets, it is worth mentioning that our US organic investments could have a slightly negative effect on our margins in the short to midterm.
“Although volatility might be high, I am excited by the combination of Raketech being both debt free and operationally stronger than ever. This allows us to continue our efforts to deliver on our strategic goals within product development and diversification as well as geographical expansion, organically and through M&A.”