Affiliate business Catena Media reported a 1,421.4% year-on-year increase in net profit for the first half of its financial year, after the return to a traditional sports calendar helped push revenue up during the period.
Revenue for the six months to 30 June reached €71.1m (£60.9m/$84.3m), up 30.5% from €54.5m in the first half of 2020.
Search revenue accounted for €66.8m of total revenue, an increase of 34.1% on last year, while Catena also saw paid revenue climb by 10.3% to €4.3m. However, the sale of its Hammerstone business in the fourth quarter of 2020 meant it did not generate any subscription revenue during the half.
Looking at business segment performance and casino remained the main source of income for Catena, with revenue here rising 23.1% year-on-year to €46.3m, accounting for 69% of all revenue in the half
This, Catena said, was helped by growth in the North American and Japanese markets, but changes to Google search parameters in Italy meant revenue from that country declined.
Sports betting revenue jumped 64.5% to €22.7m, making up 28% of all revenue, as Catena felt the benefits of the return to a more traditional sports calendar, following the disruption caused by the novel coronavirus (Covid-19) pandemic in the first half of last year.
Catena also noted the launch of legal online sports betting in the US states of Virginia and Michigan as contributors to growth.
However, the sale of the Hammerstone business negatively impacted financial trading, with revenue in this part of the busines down 32.3% to €2.1m, or 3% of overall revenue for the first half.
Catena also said the decision by Google to suspend paid finance-related advertising by non-registered financial institutions slowed progress in this area of the business but has hope that the situation will change later in the year.
Turning to costs, operating expenses for the period were €39.7m, up 11.2% on last year, but when excluding depreciation and amortisation costs, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were 44.4% higher at €40.0m.
After accounting for finance costs, pre-tax profit was €26.3m, up 1,095.5% from €2.2m last year. Aside from revenue growth, this was down to a significant drop in losses on financial liabilities and equity instruments when compared to 2020, as these losses were reduced from €10.7m to €2.0m.
Catena paid €2.1m in income tax in the half and after also including a €2.9m loss related to currency translation and interest on hybrid capital structures, comprehensive profit for the period was €21.3m, up 1,421.4% year-on-year.
Looking at the second quarter, revenue for the three months to 30 June was €30.4m, a rise of 9.4% on the corresponding period last year.
Search revenue for the quarter climbed 10.1% to €28.4m, while paid revenue increased by 33.3% to €2.0m, though subscription revenue disappeared after the disposal of the Hammerstone business.
Casino revenue edged down 0.5% to €21.1m, but sports revenue jumped 66.0% to €8.3m following the resumption of sports events, though financial trading revenue slipped 37.3% to €974,000.
Operating expenses were 11.8% higher at €19.9m but adjusted EBITDA was increased to €14.9m, marginally higher than €14.8m in the second quarter of 2020.
Pre-tax profit amounted to €6.9m, compared to a loss of €7.4m at the same point last year. This was again down to a big reduction in expenses related to financial liability and equity instruments, with this dropping from €14.9m to just €800,000.
After paying €779,000 in tax and accounting for €1.8m in costs for currency translation and interest on hybrid capital structures, comprehensive profit for the quarter amounted to €4.3m, compared to a €7.8m loss last year.
“The results demonstrate the robustness of our business model as they came in the face of low seasonal sports activity in the US, the re-opening this year of land-based entertainment venues in North America and other locations, and a sharp increase in product investment in Q2 compared to the same period last year,” Catena chief executive Michael Daly said.
“Looking ahead, we are moving ever closer towards our goal of a globally diverse portfolio with a strong presence in North America and Europe buttressed by positive contributions from Asia, Latin America and Africa as markets there come online.
“Our transformation plan to prioritise keyword and search engine optimisation and product content development in key markets is on schedule and progressing as expected.
“We expect the transformation effort to begin delivering a positive revenue impact later this year and to provide lasting impact as we move into 2022 and beyond.”
