Better Collective targets further North American expansion after Q2 growth
Since the repeal of PASPA in 2018, the US has become the biggest single market for Better Collective, supported by the acquisition of brands such as VegasInsider, Rotogrinders, SportsHandle, ScoresAndOdds.com, Action Network and Canada Sports Betting.
The business has also struck up partnerships with New York Post, Chicago Tribune and, as of today (23 August), Boston.com to support further growth in the US market in particular.
Better Collective co-founder and chief executive Jesper Søgaard said the group will continue to seek out new acquisition opportunities, both in the US and elsewhere, citing the recent purchase of Futbin, a series of esports brands focused on the FIFA series, as a way of driving further growth across the business.
“M&A is part of our DNA and our target list remains strong,” Søgaard said. “We expect to remain active, but we also have a clear focus on our capital allocation and are aware of the current market turmoil that makes capital raises less relevant – and sometimes share buybacks more relevant.
“On the back of this we are working on other financing options should an opportunity arise.”
Turning to the results, group revenue for the three months to 30 June amounted to €56.0m (£47.3m/$56.5m), up from €40.0m in the corresponding period last year.”
Breaking this figure down, publishing revenue, which includes revenue from proprietary online platforms and media partnerships where the online traffic comes directly or through organic search results, was 46.0% higher at €38.1m. Paid media revenue also increased by 27.9% year-on-year to €17.9m.
In terms of geographical performance, revenue from Europe and the Rest of World segment jumped 29.6% to €42.9m, while US revenue rocketed 88.9% to €13.2m, which, as Søgaard said, makes the country the largest single market for the group.
In addition, Better Collective noted that across its business, the number of new depositing customers (NDCs) for the quarter increased 93.0% year-on-year to 387,000.
Looking at spending, expenses were higher across all core areas, with revenue costs up 45.8% to €20.7m, staff spend 86.3% to €17.7m, other external expenses 46.0% to €5.4m, amortisation and impairment 86.7% to €2.8m, and depreciation 15.3% to €483,000.
Better Collective also noted a net positive of €638,000 in special items, whereas last year this was negative €5.6m due to M&A costs, while finance costs amounted to €728,000.
However, despite the overall increase in spending, the jump in revenue meant pre-tax profit was 122.5% higher year-on-year at €8.9m. The group paid €1.8m in tax, leaving a net profit of €7.1m, up 407.1% on last year.
In terms of how this impacted its performance in the first half, revenue for the six months to 30 June was up 56.6% year-on-year to €123.4m.
Costs were again higher across all core segments, with the exception of special items, where net expense was lowered from €5.4m to €1.0m. The difference in special items was mostly due to higher costs related to mergers in 2021, when Better Collective closed many high-profile acquisitions such as that of the Action Network.
Such was the impact of revenue growth in the half that pre-tax profit was 80.5% higher at €26.9m, while after paying €6.1m in tax, net profit was €20.8m, up 108.0% on last year.
“Since founding Better Collective, we have managed to stay largely unaffected by the business cycle and the external environment – a trend I expect to continue,” Søgaard said.
“I now look forward to an action packed H2 where we expect all time high activities in Q4 mainly driven by the NFL kick off and the new FIFA game launch in September, and most major sports leagues being live.
“Lastly, I look forward to the 2022 World Cup being played out in November and December – conceivably, under upright conditions and in the interest of football.
“I feel extremely confident in our strategy and position in the market, all which makes us well prepared to execute.”