Publishing its interim H1 2019 results (period ending 30 June), Catena Media Plc said it is ‘working hard to adapt to new market conditions’ facing all industry incumbents.
The Stockholm-listed affiliate marketing network reported tough Q2 2019 trading, facing seasonal adjustments, regulatory headwinds and ‘high casino pay-offs’.
The tough set of factors see Catena post a flat H1 2019 revenue performance of €49.5 million (H12019: €50m), as the company records declines across all core reporting metrics and KPIs.
“The second quarter is normally five to ten percent weaker than the first quarter,” said Catena Media CEO Per Hellberg. “It’s a seasonal pattern that’s already part of our forecasting. However, this year was negatively affected by regulatory changes in the United Kingdom and France but we haven’t been biding our time – instead we have pulled out all the stops to gear up for a strong second half.”
Catena admitted that its affiliate services have been impacted by new UK KYC requirements and French-market enforced product changes, which have impacted period ‘new depositing customer (NDC)’ volumes to 225,000 (H1 2018: 270,000).
The NDC slowdown – combined with ‘high player pay-offs’ – saw the firm record a period EBITDA decline of 8% to €20.6 million (H12018: €22.5m) with the firm’s EBITDA margin reduced to 41% (45%).
Operating within a number of ‘saturated markets’, Catena said that the company has moved to diversify its ‘revenue channels’, offering its operator customers player retention services.
Moving forward, Catena continues to expand its affiliate portfolio globally preparing for the new US media property launches in H2 ahead of the start of the 2019/2020 NFL season.
Supporting the firm’s global efforts, Catena details that it will launch a fully translated Japanese, Spanish and Portuguese version of AskGamblers.com by the end of Q3 2019 trading.
“Markets are increasingly regulated and undergoing changes, and this will continue. As we have often said, this is good for Catena Media in the long run; markets tend to consolidate, and key affiliates, therefore, grow larger but it takes time and we need to act to capture this growth.”
“This year is teaching us that we need to continually improve existing products to do so,” added Hellberg. “Furthermore, we need to add new markets to avoid regulatory changes having large impacts on our short-term results, as they did in the first and second quarter this year.
“Our product improvements and market expansions are programmed to start showing positive effects from the third quarter onwards, and even though we are early in the quarter, it looks positive.”