Catena maintains 2021 forward momentum despite ‘problem child’ Germany 

Catena Media has maintained its year growth trajectory after overcoming a Q2 trading period including tough European mature market regulatory adjustments. 

Publishing its 2021 interim results, Catena reported YTD revenues of €71 million – up 31% on equivalent 2020 results of €54.5 million.

YTD metrics saw it sustain its ‘forward momentum’ in the growth markets of Japan and North America, as US trading registered a revenue growth of 121% – accounting for 49% of YTD group revenues.

The Catena growth was maintained despite tough Q2 trading impacted by German regulatory adjustments and Italian Google PPC and COVID-19 restrictions that saw group revenues slow to €30.3 million, although still a 9% rise on the previous year (Q2 2020: €27.7m).

Despite Catena’s network benefiting from strong Euro 2020 trading, including registering a 32% increase in new depositing customers (NDC) to 140,000 (Q22020: 104,000), Q2 headwinds saw group EBITDA decreased by 3% to €12.6 million (2020: €13m).

Updating investors, Catena CEO Michael Daly explained: “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.”

A breakdown of network performance saw Catena’s search revenues increase by 34% to €67 million (YTD2020: €50m), as paid media revenues maintained at €4.3 million (YTD2020: €4m). Subscription services registered no income due to  Catena’s divestment of its Hammerstone business during Q4 2020.

Network growth saw group YTD expenses stand at €40 million (YTD 2020: €35m), with Catena incurring a higher PPC spend of €7 million and workforce expenditure to €15 million.

Closing its interim accounts, Catena tracks a YTD EBITDA of €40 million, up 44% on corresponding interim 2020 results of €28 million.

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%.

“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.”

Navigating its European hurdles, Catena YTD operating cash flow increased by 30% to €37 million, helping the company strengthen its balance sheet to €372 million in total assets.

Focusing on H2, Catena leadership anticipates a strong contribution from its new Lineups.com asset – acquired last May for €11.2 million to optimise its website for the start of the new NFL season in September.   

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