Acquisitions power record quarter for Better Collective

Affiliate marketing giant Better Collective reported record revenue of €17.1m (£14.7m/$19.0m) for the third quarter of 2019, a 53.9% year-on-year increase which the business said was largely attributable to acquisitions in the US and Sweden.

In December 2018, Better Collective agreed to acquire Swedish affiliate marketing company the Ribacka Group, which runs sports betting and casino marketing sites in Sweden, including Speltips.se, for €30m.

In May, the company increased its US presence with the acquisition of Rical LLC, operator of the RotoGrinders and SportsHandle portals, for $21m. Rical LLC’s brands started out in the fantasy sports sector, but now also provide affiliate marketing for online betting and casino.

Meanwhile, Better Collective also said that strong growth of new depositing customers (NDCs) to more than 85,000, up 27%, contributed to revenue growth.

Revenue share income made up 69% of the company’s revenue, or €11.8m. Cost per acquisition (CPA) revenue brought in €2.4m, while subscription sales in the US contributed €1.4m of revenue. Other sources contributed €1.5m of revenue.

However, the acquisitions also led to increased costs. Direct costs relating to revenue rose 40.4% year-on-year to €1.7m, while staff costs rose 70.2% to €5.5m. Depreciation costs increased almost four-fold to €202,000, while other external expenses rose 55.4% to €2.9m.

Better Collective’s operating profit before amortisation and special items rose 42.9% to €6.8m. Amortisation costs rose 24.3% to €1.3m, bringing operating profit before special items to €5.5m, up 48%.

After a €421,000 expenditure on special items, Better Collective’s operating profit totalled €5.1m, 41.1% more than in 2018.

The affiliate group made €412,000 from financial income, but incurred €1m of financial expenses, leading to a pre-tax profit of €4.5m, up 31.7%.

After paying €1.2m in tax, Better Collective posted an overall profit of €3.3m, 32.2% more than in 2018.

The third quarter also saw Better Collective agree a new media partnership with British newspaper the Daily Telegraph, as well as with New Jersey-based news site NJ.com.

“Q3 is normally a seasonally weak quarter with lower player activity and with most major sports leagues pausing in July and part of August,” Better Collective chief executive Jesper Søgaard said. “With that in mind, I am happy to see such strong business performance with the highest quarterly revenue in the company’s history.”

“I am very proud of Better Collective being the chosen partner of such prominent media brands. I have high expectations that these partnerships will become an important part of our business in the future.”