Catena H1 dragged by macro elements ahead of Euro asset review 

By | August 18, 2022

Catena Media Plc has detailed continued North American strategic progress but warns of multiple European headwinds impacting its earnings results.    

Publishing its interim H1 2022 trading statement, Catena registered Group revenues of €74m, up 4% on H12021 comparative results of €71m.

Headline growth is maintained as the Stockholm-listed publisher overcomes a tough comparative Q2 trading period which saw group revenues decline by -5% to €29m (H12021: €30.5m).

Q2’s revenue dip accounted for European media assets being dragged by sports calendar seasonality and macroeconomic impacts on player spend.

As previously reported, Catena underscored the accelerated growth of its US network, which registered a 21% revenue increase to €14.8m, as the unit’s year-to-date revenues stand at €44m (H12021: €35m).

Continued North American growth was achieved against a slower sports calendar backdrop, in which Catena detailed slower-than-expected initial revenue gains from its Ontario market launch.

Though buoyed by US growth, Catena cannot escape European macroeconomic elements in “energy prices and weaker economic conditions affected consumer spending in European markets in both sports betting and casino.” – CEO Michael Daly explained.

“Q2 proved a challenging quarter for Catena Media as largely external factors led to a disappointing 5 percent dip in group revenue and a margin squeeze in parts of the business that caused adjusted EBITDA to decrease by 40 percent.

“A sharp deterioration in global economic conditions affected trading in multiple markets, denting performance in parts of our online sports betting and casino portfolio just as we had taken on extra cost to support new market launches and product upgrades.”

Group KPIs saw Cantena register a 3% decrease in Q2 new depositing customers (NDCs) to 135,000 – as total YTD NDC’s stood at 307,000.

Tough H1 trading saw Catena generate an adjusted EBITDA of €34m, 10% down on comparative 2021 results of £40m. 

A breakdown of unit performance pointed to a H1 casino media decline of €36m revenues (-22%) combined with an EBITDA result of €18m (-43%)

YTD operating expenses stand at a total of €25m (YTD2021: €20m) in which Catena accounts for direct North American marketing costs of €4.2m.

As stands, Catena tracks consolidated profits of €3.7m, down 2.5x on YTD 2021 comparative income of €10.4m – results which reflected Catena sports unit no profit contribution as the group continues to prioritise accelerating US growth and spend.

Entering H2, Catena leadership has placed all European assets under strategic review, as the group targets further annualised savings of €5m in operational and capital expenditure, to be re-invested in North American growth initiatives.

“In May, we announced a strategic review of specific parts of the business in response to third-party interest in some of our brands,” Daly continued..

“The announcement attracted strong interest from additional investors, extending the process beyond our expected time frame.

“On 10 August, we expanded the review to the entire European business, where we will be seeking cost reductions. In fast-changing economic conditions, we are working diligently to obtain the best outcomes for Catena Media and our shareholders.”

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