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Better Collective AS has opened FY2023 trading with a further consecutive recording-breaking quarter, underlining the success of its strategic business shift and M&A strategy.
The results of Q1 2023 have been deemed as a “high-water mark in its financial performance” as group revenues total €88m, up 30% on corresponding 2021 results of €67m.
“We’ve achieved another record-breaking quarter. The performance was driven by Latin America and state launches in the US, as well as general strong underlying organic growth across the Group,” said Jesper Søgaard, Co-founder and CEO of Better Collective.
Marked as a key performance indicator, Better Collectivee emphasized that it had achieved a 75% increase in group recurring revenues from its existing media portfolio to €41m – accounting for 46% of total revenue contribution.
Further KPIs saw the firm’s media network generate a 35% increase in new depositing customers to 488,000 (+35%) of which 71% were acquired via revenue share contracts.
Group leadership underlined the firm’s continued ‘strategic shift’ to better valued rev-share media contracts improving the firm’s ‘operational leverage’ as Q1 EBITDA before special items grew by 44% to €33m (Q12021: €23m).
As noted by Søgaad: “Our focus on recurring revenue continues to pay off. We’ve managed to grow significantly while transitioning towards recurring revenue share.”
Of strategic significance, Q1 trading saw Better Collective strengthen its underlying financial results as excluding special items the firm’s operating cash flow increased x3 to €33.5m from €13m recorded in Q1 2022.
Improved bottom-line results, see Better Collective point to a strengthened cash reserve amounting to €91m – comprised of €28m in cash, €17m in current financial assets, and €45.5m in unused banking credit facilities.
Q1 trading saw the company secure a series of new strategic international partnerships, teaming up with the digital soccer platform Goal, the Polish news portal Wirtualna Polska, and Nigeria’s leading news media, PUNCH, to expand its digital reach and global coverage with sports audiences.
Continuing its media diversification strategy, Better Collective has expanded investment in the development of its in-house AdTech platform. This will allow the company to offer targeted marketing ads directly to the millions of sports fans that visit its media and betting portfolio.
“By building our own AdTech platform, we will be able to diversify our revenue streams, making us more attractive to our business partners and maximizing our advertising capabilities,” Søgaard added.
In connection with its new business strategy, Better Collective announced the long-term financial targets for 2023-2027, in which it has prioritised Revenue CAGR of +20%, an EBITDA-margin before special items of 30-40%, and net debt to EBITDA below 3.
Entering Q2 reported an April revenue of €27m, indicating a growth of 40%, the company also successfully acquired Skycon Limited, a move aimed at expanding its efforts within digital display advertising.
Further financial highlights saw the company complete a share buyback program capped at €5m and acquire a circa 5% stake in competitor Catena Media, to improve its options within igaming media.
“Better Collective has progressed from being ”a business” to being an “integrated collective of businesses’ with an increased reach and a more diversified offering, which in recent years has proven its worth,” Søgaard detailed in his Q1 breakdown to investors.
“We have decreased the dependency on search engine traffic from around 60% to less than 35% by mainly acquiring strong brands with heavy direct traffic. Previously, our largest business partner accounted for 50% of the Group’s revenue. Today, the same and still largest partner accounts for less than 20%, though we have grown the partnership significantly in absolute terms.”
