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Catena Media Plc maintains confidence in its corporate reorganisation and long term growth targets, despite a difficult start to year trading, dragged by underperforming US results.
Publishing its Q1 2023 trading update, total group revenue from continuing operations stood at €35m, down 5% on corresponding 2022 results of €37m.
Period trading saw Catena’s North American unit impacted by a 2% decrease in revenues to €28.9m (Q12022: €29.5m), reflecting “challenging comparatives from the record New York launch in January 2022.”
Irrespective of tough NY comparatives, Catena highlighted the launch of online sports betting in Ohio on 1 January 2023, which helped deliver one of the group’s best-ever US state launches, contributing positively to the company’s performance in Q1.
“We had a solid start to 2023, particularly with our new launches in Ohio and Massachusetts. These new markets helped drive solid revenue in our core North American affiliation business during the period,” said Michael Daly, CEO of Catena Media.
“In Europe, we saw higher profitability in the wake of the strategic review we concluded at the end of last year. We are particularly gratified by the immediate payback on our decision to target resources on our most profitable markets.”
Providing an overview of its media KPIs, Catena detailed that during Q1 trading it had registered a total of 113,300 new depositing customers (NDCs), down 3% on 2022 comparatives of 117,000.
Continuing its reorganisation of European media assets, Catena reported a 7% decrease in adjusted EBITDA to €20.5m (Q12022: €22m) – period results reflecting an adjusted EBITDA margin of 59%.
Shareholders were informed that ‘EBITDA from continuing operations’, including items affecting comparability, stood at €19.7m, corresponding to an EBITDA margin of 56%.
Catena governance maintains its long-term projections for revenue growth to resume in 2024, with an expected revenue of $125m in 2025 – equivalent to a compound annual organic growth rate of 12% from 2022 – and an adjusted EBITDA margin exceeding 50%.
For 2023, Catena outlined that it would optimise its key strategic partnerships in the US, such as NJ.com which has contributed positively to the revenue. Furthermore, the company announced a long-term partnership with Lee Enterprises Inc., one of the largest newspaper publishers in the US, to provide online sports betting and casino content.
Evaluating strategic options, the group is considering the potential sale of all remaining assets or a share listing in the US. Daly concluded, “North America represents a highly attractive opportunity for sustainable long-term growth, and Catena Media is well positioned to be a leading affiliate in that market. We remain open to strategic alternatives and structural options.”
It was noted that the US market is entering a ‘Federal Election cycle’, which is expected to slow the pace of new state launches for the rest of this year and possibly in 2024.
However, Catena’s CEO remains optimistic about the future of the company, expecting state openings to resume and potentially even accelerate once a new legislative cycle starts in 2025.
Daly remarked: “In the coming quarters, we will focus on achieving further business efficiencies to continue delivering high margins. Our ambition is to be net cash positive already during the second half of this year.”
