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Catena Media details continued struggles in its corporate recovery, as the media firm implements a ‘new operating model’ to secure improved organic growth in H2 trading.
Updating investors, Catena summarised its Q1 financial performance as “another quarter of underperformance” opening its 2024 accounts.
Headline results saw Catena register a 50% decline in corporate revenues from continued operations of €16m (Q1 2023: €31.5m). The downturn was attributed to its North American media unit impacted by a 50% drop in revenues to €14m, “equivalent to 90% of group revenue from continuing operations.”
Reflecting its North American struggles, period KPIs saw Catena detail a 41% decrease in new depositing customers (NDCs) registered on its media network to 44,000 (Q1 2023: 74,000).
Revenue results were branded unsatisfactory with regards to its North American sports performance, as Interim CEO, Pierre Cadena explained: “Operational outcomes during the period were again unsatisfactory, especially in North American sports. Stronger competition, tightened marketing spending by operators, and challenging comparatives with Q1 2023.”
Competitive intensity continued to build in North American sports overall, reflecting the entry of more affiliates into the market.
Crimped operator marketing budgets again squeezed user traffic and reduced the recruitment of new depositing customers. We nevertheless showed resilience by maintaining stable conversion rates.”
Leadership cites that it is tackling underperformance head-on, in which Catena has switched its operating structure from a “geography-based model” to a “product-focused strategy”.
The change will ensure the accountability of the commercial performance of individual assets in Catena’s media network, in which investors were notified that “product squads are also being created to address problems as they arise, and make sure we respond faster and more decisively to market dynamics than in our recent past.”
Providing a breakdown of individual unit performance, Catena’s sports network detailed a 68% revenue decline to €6.1m (Q1 2023: €19m), combined with an EBITDA loss of €1.9m.
Struggles were further recorded by Catena’s casino network, which registered a 20% decline in revenues to €9.9m (Q1 2023: €12m) as the unit’s EBITDA contribution halved to €3.7m.
Q1 impacts saw adjusted EBITDA from continued operations stand at €1.9m, reflecting a 90% decline on 2023 comparatives of €19m, as the media group’s trading margin stumbled to 12% (Q1 2023: 53%).
Period trading saw Catena disclose total operating expenses, including items affecting comparability of €16.4m. Closing its Q1 accounts, Catena operates with cash and cash equivalents of €23.4m (Q1 2023: €52m) as of 31st March.
Catena moves into the second half of the year in trading, announcing the appointment of Manu Stan as the new CEO, effective from 1 July. Alongside the appointment of Michael Gerrow as CFO, (effective 15 April) Stan will spearhead Catena’s corporate strategy to revitalise North American growth, market prospects, and corporate efficiencies.
As noted by Pierre Cadena, from H2 onward, Catena will implement a “management transformation and a sharper product focus as we remain on course to resume growth later this year.”
Catena Media is implementing a programme of organisational and leadership changes to confront continued poor performance through Q1 2024. This transition is essential as we continue to target organic revenue growth in the second half of this year.”
