Raketech adopts development and diversification focus after ‘stable’ Q2

Raketech has lauded strong operational development driven by the launch or improvement of several initiatives during the year’s second quarter, resulting in a stable product portfolio performance.

Amid an expected sporting drop-off, the online affiliate and content marketing firm saw Q2 revenue increase 24.1 per cent to €7.02m from €5.7m year-on-year. 

This represents a geographical split of 81 per cent in the Nordics and the remaining 19 per cent across other global jurisdictions, with the firm’s casino segment making up 89 per cent of total revenue, ‘sports’ eight per cent and ‘other’ three per cent.

This surge in performance is aligned with a pair of acquisitions, firstly the August 2019 purchase of Casumba Media, a Maltese registered media company with operations mainly in Japan, as well as Lead Republik, secured for €1.4m in March and lauded as strengthening its offering in New Zealand and Canada.

Operating profit for the quarter dropped 22.8 per cent to €1.53m (2019: €1.98m) and adjusted EBITDA fell 2.3 per cent to €2.82m (2019: €2.89m), organic growth was negative 1.2 per cent with Raketech’s casino portfolio, driven by assets in Norway and Sweden, partially mitigating the challenge of the sports market.

For the first half of the year revenue amounted to €13.5m, a 12 per cent rise from €12.1m, however, operating profit and adjusted EBITDA declined 39.4 and 14.5 per cent to €2.89m (2019: €4.78m) and €5.45m (2019: €6.38m), respectively.

Oskar Mühlbach, Raketech CEO, commented: “As expected, we witnessed a significant drop within our sports related products due to COVID-19 and we experienced decreased traffic to these assets as an effect of cancelled sport events. This is something we expect, and to some extent already are able to witness, will regain traction again once sports return back to normal.

“In addition, we could see that June slowed down even for our casino assets, mainly due to seasonality but also to some extent due to hesitance towards marketing investments from the operators, awaiting the new temporary Swedish regulations coming into force on July 2.” 

Outlining a number of aforementioned initiatives developed and delivered by the organisation during the quarter, Raketech stipulates that the US is to form a key market for the group.

Preparing to launch its TV-Sportsguide to the American audience in Q4, Raketech, which saw Colorado approval secure its third licence in the country, highlights an ongoing ambition to shift the US from a strategic target to a strategic market in 2020.  

Mühlbach concluded his CEO address by outlining the group’s future outlook: “Revenues for July amount to €2.4m, despite sports still trailing behind due to COVID-19. Activity was high, following the temporary re-regulations on the Swedish market, as many players sought to open new accounts following the 5,000 SEK per week deposit limit. 

“Despite us significantly increasing our revenues from outside the Nordics to close to 20 per cent, the volatility on the Swedish market due to the re regulations makes it challenging to navigate. The unpredictability mentioned in the previous report is still very much present even though our dependency on this market is lower. 

“And depending on the market development on our existing markets, it is worth mentioning that our US organic investments could have a slightly negative effect on our margins in the short to midterm. 

“Although volatility might be high, I am excited by the combination of Raketech being both debt free and operationally stronger than ever. This allows us to continue our efforts to deliver on our strategic goals within product development and diversification as well as geographical expansion, organically and through M&A.”