Catena Media has reported a 5.7% year-on-year increase in revenue for the two months to 29 February, with the affiliate marketing giant saying that it anticipates further growth amid the novel coronavirus (Covid-19) pandemic.In a trading update, Catena revealed that revenue for January and February amounted to €18.0m (£16.4m/$19.5m), with casino revenue accounting for 59% of the total figure, sports 35% and financial services 5%.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the two-month period increased 16.6% year-on-year to €8.6m with a higher margin of 47.9%, compared to 43.4% in 2019.
Catena also noted that adjusted EBITDA, excluding non-recurring costs, was up 19.9% to €8.9m, with an increased margin of 49.2%.
The affiliate business did not make any major investments during the period and, by the end of February, it had cash and cash equivalents of €19.2m and a net interest-bearing debt position of €162.5m.
In terms of both its current performance and the future of the business, given the ongoing situation regarding coronavirus, Catena said it expects to see continued positive development in its casino segment and does not foresee any negative impact on revenues during the second quarter.
Catena said that its casino segment has continued to perform well in March, with traffic higher than average traffic in January and February 2020, when this area of the business was its primary source of revenue.
However, while Catena did note that the suspension of many sports leagues and the postponement of major events is likely to impact sports revenue, it is working with key operators to promote sports events that are still running.
To mitigate the shortfall in sports revenue, Catena said it will focus on growing its casino business by converting traffic from a number of sports-related sites into casino revenue and holding back on low-margin media spend.
In addition, Catena noted that it has experienced a positive traffic trend within its financial services segment.
“We believe the Covid-19 outbreak will have no foreseeable negative long-term effects on the business and currently postponed events may contribute with a positive effect in the future when they are rescheduled,” Catena said.
Chief executive Per Hellberg added: “The world is facing an unusual and challenging situation due to Covid-19. Catena Media’s largest business segment, casino, represented 73% of EBITDA during January and February, is performing well and shows a positive development under the current circumstances.
“Several sport events have been cancelled or postponed, and it is uncertain for how long this will last, but we are holding back on costs and finding alternative revenue streams for the sport segment.
“Provided that the sports events start up after the summer break, our target remains unchanged, to reach double-digit profitable growth in 2020.”
Catena, which plans to publish its full results for the first quarter on 20 May, last month reported a full-year loss of €10.5m for 2019, primarily due to impairment charges related to assets acquired between 2016 and 2018, while all of its core business units struggled in the period.
Revenue for the 12-month period through to 31 December 2019 amounted to €102.8m, down 2.1% from €105.0m in the previous year. Catena noted a 1.8% year-on-year fall in search revenue from €89.9m to €88.3m, while paid revenue also dropped 15.0% to €11.9m and subscription revenue 57.7% to €2.6m.
