Better Collective is anticipating that the COVID-19 pandemic will continue impacting its operations for some time to come, as 2020’s second quarter becomes the exception in an “otherwise strong” growth story.
As global sporting cancellations impact many Q2 performances, Better Collective states that due to a momentary casino increase and significant esports surge revenue dropped four per cent from €15.8m in 2019 to €15.3m, while organic revenue dropped by 24 per cent.
EBITA before special items also reported a Q2 decrease of seven per cent to €6.3m from €6.78m, while profits after tax amounted to €3.91m, down from €3.68m in 2019’s corresponding period.
The number of new depositing customers was approximately 71,000, corresponding to a decline of 36 per cent, attributed to low sports activity and a drop in performance of some of the firm’s digital platforms, affected by lower traffic volumes and performance in searches.
For the year-to-date, revenue increased 17.6 per cent year-on-year to €36.1m (2019: €30.7m), EBITA before special items came in at €14.9m, up 12.1 per cent from €13.3m, and profit after tax increased 16.7 per cent from €7.36m to €8.6m.
“As expected, Q2 was a challenging quarter for online sports betting as the COVID-19 pandemic set a halt on major sports events,” commented Jesper Søgaard, CEO of Better Collective.
“April was the low point, May still significantly affected, and in June some of the major sports in Europe resumed with accelerated play-offs. Sports markets in large countries like the US and LatAm are still affected and will expectedly start again in the second half of the year.
“However, our digital business model has proven strong under these difficult circumstances and Better Collective has demonstrated the flexibility to withstand a period of low sports activity.”
Asserting expectations for a normalised sporting calendar from 2021, Better Collective comments that its M&A-pipeline is progressing well and anticipated the completion of one or more acquisitions before the end of the year. It says that such a move will bring the total revenue growth above the financial target for 2020.
“In general, the market development has so far been in line with the assumptions we made mid-March, when we decided to provide an extraordinary business update based on this unprecedented situation. I am very proud that we could maintain our financial earning target (EBITA > 40%) both for Q2 isolated and for the first half of this year,” added Søgaard.
“With the underlying European business getting back up at Q1 average in June, we enter the second half of 2020 with cautious optimism, however still with some uncertainty mainly regarding US sports and the lost momentum when it comes to NDC-growth.
“We expect the remainder of 2020 to be somewhat affected by the lost momentum. Therefore, we see greater uncertainty than usual regarding our revenue growth targets.”