Catalyst Media Group (CMG) has provided a snapshot into SIS’ (Sports Information Services) performance during 2022, revealing some hurdles for the firm in the second half of the year.
In an update to its AIM investors this morning, CMG – which counts a 20.54% stake in SIS as its ‘main asset’ – outlined that the 24/7 betting services supplier recorded revenue of £125.8m between June and December 2022.
This marked a 10% increase on corresponding 2021 revenues of £113.4m, as SIS closed a year that saw a series of agreements with prominent betting companies and horse racing organisations, among others.
For example, towards the end of 2022 the firm was able to make its market debut in the US, going live with bet365 in New Jersey, whilst additional agreements saw an expansion of its presence in its founding markets of the UK and Ireland, as well as South Africa, Chile and Malta, among others.
A large number of the firm’s partnerships revolve around delivery of televised sports content, particularly horse racing, to licensed betting offices (LBOs), meaning high-street bookmakers such as Entain’s Ladbrokes and Coral brands.
As CMG puts it, the bulk of SIS H2 2022 revenue was ‘derived from its business of providing integrated television and data services to licensed betting offices in the UK, Ireland and overseas’.
However, despite making progress on revenue, SIS’ operating profit during the last six months of 2022 stood at £1.9m, a 36% decline on £3m the year prior.
It is uncertain what factors could have contributed to this, although market entry can often be a costly affair, and SIS did make several major hires throughout 2022, potentially increasing the firm’s salary expenses.
What is clear is the impact the drop off in profit has had on CMG’s dividend, derived from a share in SIS’ profits. The company’s investment in SIS dropped slightly to £34.9m, down 1.4% on £35.4m in H2 2021.
Closing its own accounts, CMG held net assets of £35.8m as of 31 December 2022, a slight increase on H1 2022 (£35.5m), whilst net cash rose from £100,000 on 30 June 2022 to £900,000 on 31 December.
However, in tandem with the marginal reduction in value of its investment in SIS, CMG recorded a net profit of £350,000, down 2.2% from £450,000 in H2 2021.
In his statement to investors, the company’s Chairman, Michael Rosenberg, said that ‘the carrying value of our investment in SIS will be reviewed again at our financial year end’.
Earlier this year, reports circulated in British media that two of SIS’ more prominent betting industry stakeholders, Entain and Betfred owner Fred Done, had asked their investors to assess potential buyers for the duo’s shares in the company.