Catena Media's Q3 revenue plummets 28% as sale of Italian business is agreed

Catena Media has announced it has agreed to sell its Italy-facing online sports betting and casino assets for €19.8m (£17.3m).

It said the proceeds from the sale will primarily be used to reduce company debt.

The sale of the Italian business will also give rise to an impairment charge of €2.7m.

Catena confirmed that the completion of the sale of its Italy-facing assets will conclude its 18-month-long strategic review. 

Over the past year-and-a-half, the firm has sold several brands including its flagship AskGamblers site to Gaming Innovation Group (GiG) in December 2022 for €45m as well as its UK and Australian sports betting brands for €6m.

Catena said that overall it has raised €76m and cut costs by between €3.8m to €4.2m

On the deal for the Italian business, Catena CEO Michael Daly said: “We are pleased today to have secured a positive outcome for our Italian sports betting and casino brands. We believe their new ownerships will provide them with the right environment to prosper and grow.”

The sale of the Italian business aligns with the firm’s focus on regulated markets, specifically the Americas.

Daly added: “The sales further sharpen our strategic focus and strengthen our financial position, allowing us to streamline operations further and redeploy capital into our core areas as we double down on capturing expanding opportunities in regulated markets in the Americas.”

On the completion of the strategic review, the CEO was buoyant about Catena’s position moving forward.

He remarked: “Today marks the completion of our transition into a group with a crystal-clear focus on stable, regulated markets, notably in the Americas.

“The divestments we have made have improved our financial position significantly, and now that the streamlining process is complete, we can devote our full resources and attention to capturing the long-term growth opportunity we see ahead.”

Catena Media also reported a 28% slump in Q3 revenue due to “intensified competition” and lower cost per action (CPA) from operators. 

Revenue for the affiliate fell from €21.9m in Q3 2022 to €15.9m in Q3 2023. 

Adjusted EBITDA from continuing operations also plummeted 65% from €8.8m to €3.1m, corresponding to the firm’s adjusted EBITDA margin falling from 40% in Q3 2022 to 19% in Q3 2023.  

The majority of Catena’s revenue came from its North American operations, but this segment also saw a drop-off of 29%, decreasing from €18.6m in Q3 2022 to €13.3m in Q3 2023. This translated to a fall from 85% of group revenue in Q3 2022 to 84% in Q3 2023. 

Revenue from casino operations dropped by 23% to €10.1m, while adjusted EBITDA from the segment dipped 27% to €4.7m for the quarter.

Sports betting revenue decreased 34% to €5.7m, with North American sports betting revenue falling from €8m to €4.6m over the period. 

New depositing customers (NDCs) fell 34% at group level to from Q3 2022’s 68,174 to 44,986, with casino decreasing the most from 43,135 last year to 24,330 in 2023. 

Cash and cash equivalents as of 30 September were €33.5m, up from €28.3m in 2022. 

Following the publication of the affiliate’s results (21 November), Catena Media’s share price fell to SEK12.18 (£0.93) but has since recovered to SEK13.37 at the time of writing.