The business model for Better Collective has shown resilience against COVID-19 headwinds, as it moves to diversify its publishing assets to compete within the esports market.
A strong opening to 2020 trading saw Better Collective record a 40% increase in group revenues to €20m (Q12019: €15m), which has been driven by a combination of improved sports win margins and increased customer activity across its portfolio.
Despite trading being impacted by the mid-March cancellation of global sports fixtures under lockdown, Better Collective has delivered an EBITDA increase of 32% to €8.6m (Q12019: €6.5m).
Prior to virus circumstances, Better Collective reported that group cash-flow conversion had improved to €9.5m (Q12019: €7.5m), recording improvements across all core trading metrics.
Closing Q1 2020 trading, Better Collective declared a 27% increase in group operating profits to €6.5m (Q12019: €5.2m).
Better Collective CEO Jesper Søgaard said: “2020 got off to a strong start with significant growth throughout the business and key performance indicators. During mid-March, an unprecedented halt on major sports events was seen as a result of the COVID-19 pandemic postponing events and thus revenue.
“However, our digital business model has proven strong under these circumstances and we have as a company demonstrated the flexibility to withstand a period with low sports activity.”
Despite its strong opening, Better Collective stated that it has had to move quickly to mitigate the pandemic factors that have impacted its business channels.
Better Collective reported that April revenues were down approximately €4.6m as a result of COVID-19 consequences, which will likely see the company report its first negative quarter since listing on Stockholm Nasdaq in 2018.
Commenting on COVID-19 circumstances, Søgaard continued: “I would like to express my sincere thanks to all Better Collective’s stakeholders; our employees and management team, our Board of Directors and all our business partners for their extraordinary performance and flexibility during the difficult times that the entire global society is currently facing. At Better Collective we love sports and betting and we hope that major sports events will be back in the arenas soon.”
Countering multiple unknowns, the publisher implemented a cost-savings programme, which saw board members and founders waive their 2020 salaries and compensation packages.
Prior to mid-March’s outbreak, Better Collective was able to secure its €35m acquisition of leading Nordic esports publishing group HLTV APS, which became the group’s first esports asset.
Søgaard added: “Through the acquisition of HLTV.org, which is the world’s largest community-site within Counter-Strike: Global Offensive (CS:GO), we believe we have found the best-positioned organisation and brand within this field.”
“We expect strong synergies as many of the betting operators we collaborate with today also offer betting on esports. As it turns out, the timing of this acquisition was just right and we are off to a great start”