August stock market sweep: BetMakers and Catena Media drop on disappointing results
BetMakers Technology Group
Since iGaming NEXT began this series in May, the Australian B2B technology supplier has appeared every month as one of the top losers, with only one exception.
In August, BetMakers experienced a significant 27% decline in its stock value.
Most notably, the company witnessed a sharp 15% drop in its share price after reporting a negative adjusted EBITDA of A$27.9m for the 2023 fiscal year.
Despite achieving a 3.7% increase in revenue, which reached A$95m, the company ended up posting a loss of A$38.8m.
This decline followed significant organisational changes, including cost reductions and a reshuffling of management positions.
However, these actions have yet to win broader investor approval.
Looking ahead to the fiscal year 2024, BetMakers has laid out plans to streamline its operations even further, while also projecting modest low double-digit revenue growth.
Nevertheless, the company’s stock suffered a significant blow in August, adding to a cumulative loss of nearly 48% over the past six months.
Within the affiliate sector, another company that has repeatedly fallen short of expectations in recent months is Catena Media.
The affiliate business faced significant adversity in August, with its stock experiencing a substantial 28% decline.
The company’s stock turbulence was worsened by a severe market reaction to its Q2 2023 financial report on 22 August, which unveiled a concerning 16% drop in revenue, amounting to €16.9m.
Adjusted EBITDA also declined by 60% year-on-year to €2.6m.
Catena Media CEO Michael Daly attributed the Q2 performance to reduced marketing spending by betting operators in North America, impacting search volume and new depositing customers, particularly in sports.
However, given the strong performance of Catena Media rival Better Collective in the US market, investors and analysts were skeptical of this explanation.
Despite the challenging Q2 results, Daly remained undeterred in his optimism about the company’s financial goals for the period spanning from 2023 to 2025.
These objectives include achieving a net cash positive status by the end of the year, realising annual North American revenue of $125m by 2025, and attaining an adjusted EBITDA margin exceeding 50%.
While Catena Media’s shares have experienced a 40% loss over the past six months, they have shown signs of recovery, gaining 5% to date since closing at SEK 17.98 on 31 August.
Entain experienced the most significant decline in share value among operators in August, with a staggering 16% drop.
During this tumultuous month, the company’s share prices plummeted from £13.86 on 31 July to £11.58 on 31 August.
This sharp decline was triggered by Entain’s announcement on 10 August that it had set aside £585m to pay a potential settlement to the UK authorities over alleged bribery offences at its former Turkish betting business.
Entain anticipates that the financial penalty will be disbursed over a span of four years, following the formal establishment of a deferred prosecution agreement with the UK Crown Prosecution Service, which is expected to occur later this year.
Should Entain’s projection of the penalty amount prove accurate, it would constitute the second-largest fine ever imposed by UK authorities on a company for criminal wrongdoing under the deferred prosecution system, which introduced corporate plea arrangements.
This development has overshadowed Entain’s robust H1 2023 results. The operator achieved a substantial 11% increase in overall NGR, totalling £2.4bn, factoring in constant currency fluctuations.
Online revenue for the same period exhibited an impressive 12% surge, reaching £1.7bn.
Additionally, Entain’s underlying EBITDA grew by 6%, reaching £499.4m, while underlying operating profit experienced a remarkable 25% increase, reaching £307.4m compared to the previous year.