• Home
  • News
  • Results
  • Better Collective poised for further M&A as acquired brands drive Q2 growth
igamingnext photo
Better Collective remains on the lookout for acquisition opportunities after posting the financial results from its best ever Q2. 

Topline numbers

Revenue for Q2 was €78.1m amid a year-on-year increase of 39.4%. 

Of the total, €53.5m or 68.5% came from Better Collective’s publishing division, which includes revenue from the company’s proprietary owned and operated sports media as well as media partnerships.

That gave the segment a year-on-year growth rate of 40.4%.

The remaining €24.6m (31.4% of total revenue) came from Better Collective’s paid media business segment, which includes revenue from paid advertising on search platforms such as Google and Bing, as well as advertising on third party sports media.

That segment grew by 37.1% year-on-year.

By geography, 70.6% of revenue came from the Europe and Rest of World segment, as revenue there grew by 32.3% year-on-year to €55.2m.

The remaining €22.9m was generated in North America as the region showed a year-on-year growth rate of 59.9%.

Better Collective declared EBITDA before special items of €28.7m, up 134.7% year-on-year, at an EBITDA margin of 37%.

The business posted profit after tax of €8.3m for the quarter, up 16.8% year-on-year.

News nugget

In its Q2 report, Better Collective lauded the acquisitions it has made this year and suggested that further M&A deals may be in the pipeline.

During the quarter, it completed the acquisition of display advertising company Skycon in a deal worth up to £45m.

At the time, Better Collective said the business would complement its existing search engine-based approach to marketing, providing synergies for both companies.

Skycon “has already delivered strong performance after a swift onboarding,” Better Collective said, adding that the integration of the business is expected to improve margins in the paid media segment going forward.

During Q2, Better Collective also acquired Futbin, the leading online media asset for players of the FIFA football video game and esports franchise.

Following the end of the quarter, Better Collective undertook two further acquisitions. 

One of those acquisitions was a $54m deal for sports and entertainment media platform Playmaker HQ, and the other was the €3.7m purchase of four Swedish-facing sports media brands from Everysport Group.

In its Q2 report, Better Collective emphasised the importance of AI technology for the future of the business, and suggested it may pursue additional M&A deals in this space.

The business said the use of AI “has revolutionised the way we create, distribute and consume content,” and also “empowers us to scale content production efficiently, maintaining a consistent flow of high-quality material across our sports brands.”

In turn, such technology will allow the business to “reach a wider audience, engage them more effectively, and enhance their overall experience,” it said.

In the company’s earnings call, CFO Flemming Pedersen said: “Our total financial capacity exceeds €150m euros now, hence we have plenty of firepower for expanding our activities.”

No further detail was given on the businesses Better Collective may be considering as potential targets for acquisition.

Best quote

“There are some operators leaving the market but also newcomers, so we are in the middle of making arrangements with the new ones. As in previous seasons, that is a moving target right now.”

– Better Collective CFO Flemming Pedersen on shifting US market dynamics.

Best question

During the Q2 earnings call, Oscar Rönnkvist of ABG asked CFO Pedersen how a recently renewed financing deal would impact the company’s ability to undertake further M&A in the current macroeconomic climate.

In response, Pedersen said: “We have expanded the bank arrangement and are working closely with three banks that have supported our growth. 

“We are basically updating the facilities with our increased earnings and leverage, so we are very satisfied with that. 

“Clearly, we see some of the same increased interest rates as the rest of society – we are basically also exposed to that, but compared to the industry in general, I think from a very low base. So we still have what I would consider very cheap funding.”

Current trading and outlook

Better Collective reiterated earnings guidance for the full-year 2023, which was previously upgraded in June this year.

Revenue is expected to fall between €315m and €325m for the year, up from a previously issued guidance range between €305m and €315m.

EBITDA before special items for the full year is expected to total between €105m and €115m, up from previous guidance of €95m to €105m.

Following the end of the reporting period, Better Collective said July trading showed revenue of €23m, implying a year-on-year growth rate of 39% for the month.

Following the release of its Q2 results, shares in Better Collective traded up around 9%.

Similar posts