NDC growth sees Better Collective revenue soar in Q1
Affiliate marketing giant Better Collective has seen revenue almost double in the first quarter of 2019, driven by record numbers of new depositing customers (NDC) in the period.
Revenue was up 97% year-on-year to €14.9m (£12.8m/$16.7m), beating company expectations and performing particularly well compared to Q1 2018, which Better Collective noted was an especially weak quarter.
Revenue share deals accounted for 72% of total revenue, with 18% coming from cost per acquisition, and 10% from other sources. More than 116,000 NDCs were signed up over the period, a 147% year-on-year rise, and setting a new quarterly record.
Unlike many of its competitors, Better Collective said the performance of its Swedish business had been satisfactory in the first quarter, aided by the €30m acquisition of Ribacka Group in December 2018.
“We expect that the market will continue to find a new balance, and in the long run, we expect Sweden to be an important and valuable market for online sports betting,” Better Collective chief executive Jesper Søgaard (pictured) said.
During Q1, Better Collective allocated significant resources to the development of new markets such as the US, as well as establishing new subsidiaries in the UK and Poland to support increased activities in each market. This, it noted, had led to an increase in expenses for the period.
Costs for the quarter rose 53% to €8.4m, driven by increases in revenue-related expenses to €1.4m, with staff costs rising to €4.2m and other external expenses to €2.7m. This left an operating profit before amortisation and special items of €6.5m, a 212% year-on-year rise.
Once amortisation and impairment charges of €1.2m and special items of €87,000 - related to M&A activity - were stripped out, the operating profit stood at €5.2m, up 230% from Q1 2018. After financial income and expenses and income tax, Better Collective’s net profit for the quarter was €3.7m, up 225%.
Looking ahead to the rest of 2019, Søgaard said Better Collective would look to shore up its US position by developing new products and adjusting current offerings for the US market.
"While the pace of regulation is uncertain, we see progress and we are preparing for the next states to regulate online sports betting and casino,” he said. “On this note, Pennsylvania has decided to open for online casino as from July 15, 2019, and possibly online sports betting as soon as May.
“We continue the efforts to find new business from the organic approach as well as through possible collaborations and acquisitions.”
Yesterday the company also announced that it would pay the final deferred payment of €6m for its Ribacka acquisition would be paid in 896,727 ordinary shares in Better Collective.
Its short term growth targets, for the 2018-20 period remain unchanged, with Better Collective aiming for annual growth of 30-50%, driven by M&A and double-digit organic growth. However it noted that 2019 results were likely to beat this target, driven by strong underlying organic growth in key performance indicators such as NDCs, player deposits and gross gaming activity.