Catena Media Plc has booked a non-cash impairment charge of €40m ($43.1m) ahead of publishing its Q3 trading results on 7 November 2024.
The impairment charge is recognised as Catena has authorized a writedown of “specific sports betting assets” as part of the media group’s transition to a new operating model.
As disclosed in H1 trading, Catena modified its remaining US media network, taking the “strategic decision to focus product development efforts on a cluster of core brands.”
The transition comes as Catena observes an “underperformance in sports betting,” impacting the firm’s book value. H2 trading saw Catena register year-to-date losses of €5m ($5.3 m) attached to its US sports betting unit, impacted by higher operating costs and Google algorithm changes.
Preliminary figures for Q3 trading indicate that revenues will stand between €10.5-€11.0m ($11.33m- $11.88 m) (Q32023: €15m ($16.19). Catena expects adjusted EBITDA to be in the range of €1.0n-€1.5m ($1,06m -$1,59m) (Q32023: €3.2m ($3.39m), corresponding to a margin of 10-14%.
New CEO Manuel Stan commented: “It is important that our balance sheet reflects current realities. In sports betting, we have been operating at a loss for an extended period. We have responded to market challenges by shifting resources away from loss-making products and into those that we believe have the best potential to generate long-term value. I believe that this strategy will position us for success in the coming quarters.”
Entering Q4, Catena has terminated 29 positions within its content marketing team, as it seeks to further “streamline and rightsize” resources within its media network.
Staff redundancies will see Catena pay severance costs of approximately €400,000, ($424,000) with Catena projecting cost savings of €2.2m, ($2,33m), effective from 1 November 2024.
Manuel Stan commented on corporate developments: “As part of our drive to embed our new product-led organization, we are optimizing the operational teams to achieve a flatter structure that is more closely aligned with our product goals. Today, our priority is to support all the individuals who are affected by these changes.”
Moving forward, management will prioritise addressing the monetisation of a smaller core of flagship products and diversifying revenue streams.
Stan concluded: “We are keenly aware that the market is looking for signs of a return to revenue growth. Although the figures reported today do not yet show that improvement, we see positive signals from the changes we have made in recent months, such as a leaner cost base and improved search rankings, and we remain on course to achieve our objectives.”
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