Catena Media says focus is on shareholder returns as sale talks stutter and share price slumps
CEO Michael Daly remains bullish on future expectations as team aim to maximise opportunities for company
Catena Media CEO Michael Daly has said internal focus at the company remains on day-to-day operations despite ongoing conversations regarding a potential sale of the business.
Providing an update as part of the analyst call following a set of disappointing Q1 results, the American CEO said the remit of the business was centred around driving the value of the company moving forwards.
Since the release of the results this morning, 17 May, Catena Media’s share price has plummeted more than 16% in trading to SEK21.20.
Despite a focus on North America, the division returned a 2% decrease in revenue while total group revenue dipped 5%.
Catena Media confirmed it was retaining the services of Carnegie Investment Bank to support its strategic review.
As part of the results disclosure, the affiliate noted that conversations around a potential sale of the business had “yet to produce an adequate valuation of the group’s expected future performance and cash flows”.
Daly explained: “As a management team, our focus is on driving the value of the company. That is working on the North America opportunities [and] cost optimisation to continue across the organisation at all levels in order to optimise the business.
“We are a very high margin [business], and our intent is to remain that way. Management and the board [are engaging] with Carnegie to evaluate all of the other strategic opportunities for the company.
“The rest of the team is focused on maximising the current business. We continue to look at all the opportunities on the table and what is the best path for us and our investors in terms of the assets we have, the markets we are in and where we are listed,” he added.
While it does not appear that a sale will be completed anytime soon, Daly did divulge that M&A could be used by the affiliate to expand its reach.
It was arguably a series of unneeded and overvalued M&A deals that left Catena Media bloated in the past, so a return to bolt-on deals is an interesting shift.
The CEO continued: “There is definitely M&A opportunity in the world today in North America, Latam and other parts of the world, both in media as well as technological advancements in order to further develop our platforms and teams. We have to balance those [against] what is in the best interest of the shareholders.”