Catena Media revenue grew 15% to €27.4m in Q4 2022, while the sale of its AskGamblers business to GiG has freed up resources for future acquisitions.
Topline numbers
In Q4 2022, revenue from continuing operations was €27.4m, which represents a 15% year-on-year increase.
North America accounted for 78% of total revenue as the region grew by 31% year-on-year to €21.5m.Adjusted EBITDA from the group’s continuing operations increased by 14% to €12.3m, up from €10.8m in Q4 2021.
That corresponds to an adjusted EBITDA margin of 45%.
For full-year 2022, revenue from continuing operations was €110.1m, an increase of 7% compared to 2021.
In contrast, adjusted EBITDA from continuing operations decreased by 16% to €50.1m, at a margin of 46%.
News nugget
Catena Media confirmed its commitment to regulated market growth and shared some more insights into its strategic priorities for 2023.
CEO Michael Daly said the sale of its AskGamblers brand to GiG had freed up resources for M&A and organic investment without taking on excessive levels of debt.
Daly said: “AskGamblers is a solid business with healthy margins. However, the accelerating trend towards market regulation led us to conclude that the brand, which partly addresses non-regulated grey markets, would enjoy better development prospects under new ownership.”
Catena Media added that following the completion of a strategic review first announced in May 2022, the business “will positively evaluate M&A investments to further strengthen its position in strategic markets.”
The firm also revealed in its report that it had divested its Financial Trading segment via a management buyout at the end of January 2023.
Daly explained that “shifts in the global sports betting industry and in various trading markets led Financial Trading to become an under-appreciated part of the Catena Media portfolio”.
He added: “Over time, we ceased to have the bandwidth or parameters to maximise the business’ potential under our ownership.”Daly said the company now has “the ability to invest flexibly into newly regulated markets in different regions”.
“At present, those opportunities are concentrated in North America and it is our firm belief that the US and Canada offer the best investment case for the company and its shareholders in current conditions,” he said.
Best quote
Catena Media CEO Michael Daly: “Some 90% of revenue from continuing operations now comes from regulated markets. We are nevertheless not averse to investing in markets that offer stable and predictable operating conditions, even if they are not yet regulated. One example is Japan, which operates a tolerant approach to online casino and where we are committed to expanding our already-significant market presence.”
Best question
Analyst Oscar Rönnkvist from AGB Sundal pointed to Catena Media’s recent trading update that projected adjusted EBITDA from continuing operations of €10.8m. However, the company actually reported adjusted EBITDA of €12.3m.
Rönnkvist asked about the cost reductions made to achieve this result.
In response, CFO Peter Messner said that Catena Media was not focused on faster cost-cutting measures, but was following the plan previously announced as part of its European restructuring and streamlining measures.
Messner further explained there were several elements to consider when comparing Q4 of the previous year to Q4 of 2022.
One element is that certain European grey market assets were divested at the end of Q3 2022, which distorts the year-over-year comparison. The divested Financial Trading segment also had a negative contribution that further deteriorated during the quarter.
Current trading & outlook
Despite a 19% increase in North American revenue in January 2023, group revenue from continuing operations decreased by 4%.This outcome was not unexpected, Catena Media said, as the previous year saw record-breaking market launches that resulted in a 65% increase in North American revenue compared to January 2021.
In other news, the affiliate announced last month that third parties had expressed interest in acquiring the entire company. Today, Daly stated that he would not provide further details on the process but expected the company’s strategic review to be concluded in 2023.
Meanwhile, the affiliate has initiated the process of hiring a new CFO as Messner prepares to leave his current position.