Catena Media pivots sports sites to casino to minimise Covid-19 impact
Malta-based affiliate ramps up casino portfolio after the vertical contributed 59% of revenue in January and February
Catena Media is converting traffic from its portfolio of sports betting brands to online casino to mitigate a shortfall in sports betting revenue.
The strategy is being used by most sports betting businesses at present as they seek to diversify revenue streams following the postponement and cancellation of global sporting events due to the coronavirus pandemic.
Issuing a trading update for the first two months of 2020, Catena reported a revenue increase of 5.7% for January and February to €18m.
Casino represented 59% of revenue during the first two months of 2020, before the negative financial effects of the coronavirus outbreak had really been felt.
Casino traffic has reportedly increased in March as punters seek out different verticals, although the affiliate has pledged to work with operators to specifically promote sports which are still ongoing.
The Malta-based firm will also hold back on low-margin media spend for now.
Although 35% of revenue in January and February was generated from sports, Catena believes the Covid-19 outbreak will have “no foreseeable negative long-term effects on the business”.
“The world is facing an unusual and challenging situation due to Covid-19,” said Catena Media CEO Per Hellberg.
“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 segment.
“Provided that the sports events start up after the summer break, our target remains unchanged to reach double-digit profitable growth in 2020,” he added.
As of 29 February, Catena Media had cash and cash equivalents of €19.2m and a net interest-bearing debt position of €162.5m.
Catena Media’s new chief financial officer will take over from 1 April 2020. Catena Media’s share price was up 45% at the time of writing.