Kindred Group remains optimistic despite “short-term headwinds”

The group has presented its Q1 interim update, reporting a 31 per cent drop in revenue year-on-year.

Sweden.- Kindred Group has presented its interim results for the first three months of 2022, revealing a drop in revenue of 31 per cent year-on-year. Total revenue came in at £246.7m, down from £352.6m in the same quarter last year.

Gross winnings revenue (B2C) was down 31 per cent to £242.4m, largely because of its block on customers in the Netherlands. Outside of the Netherlands, gross winnings were down 7 per cent (or 3 per cent in constant currency).

Underlying EBITDA was down 77 per cent to £24.5m and profit after tax was down from £72.6m to £6.4m. The number of active customers fell to 1,377,317 (down from 1,818,759).

CEO Henrik Tjärnström said: “While the start of 2022 has seen societies returning to normal after two years of COVID-19 impacting our lives, we are today witnessing worrying geopolitical development in Europe, bringing both uncertainty and tragedy that will leave its mark for the foreseeable future.

“Whilst these developments have had a limited impact on Kindred’s performance for the first quarter of 2022, we continue to notice an impact from post-COVID-19 normalisation across markets, as well as the decision to cease activity in the Dutch market in Q3 2021.

“Our diversified product and market mix provides us with a relative degree of stability across the group. We have seen this on several occasions, not least during the pandemic when sports virtually disappeared for a period.

“Excluding the Netherlands, our diversified portfolio has seen solid casino performance across markets during the first quarter of 2022 with growth of 1 per cent from the same period in the prior year despite tough comparatives. This has balanced out the slightly more volatile sportsbook, which started out strong but had a weaker second half of the quarter.

“The cessation of activity in the Dutch market continued to have a short-term impact on our gross winnings revenue, which came in at £242.4m for the quarter, in line with the fourth quarter 2021 but significantly below the same period last year.

“While this temporary top-line pressure reduces our profitability in the short-term, we maintain a very positive long-term view on the return from investments in our tech platform and strategic projects, such as our US expansion and the recently announced Kindred Sportsbook Platform.

“We embarked on our transformation journey more than ten years ago and it is very satisfying that we are nearing, in the coming months, one of the final major milestones. We have an exciting time ahead of us and I have great confidence in the direction we are taking through our long-term focus.”

Excluding the Netherlands, the average daily gross winnings revenue for the group up to and including April 26 was 15 per cent lower than the daily average for the full second quarter of 2021.

Sports betting gross winning revenue has been negatively impacted by a weak sports betting margin of only 7.8 per cent after free bets (compared to 10.7 per cent in the second quarter of 2021). The daily average gross winnings revenue for casino and other products has remained at the same level as the full first quarter of 2022.

Kindred publishes annual sustainability report

Last month, Kindred published its annual sustainability report as part of its objective to make 0 per cent of its revenues from harmful gaming by 2023. The group had announced last year that it intended to become the first online gambling company to report on safer gambling and sustainability metrics as part of its financial duties.

The report shows that in 2021, Kindred made gross winnings of £1.26bn and EBITDA £332m (a 26 per cent EBITDA margin). Of the gross win, 4 per cent was calculated to have come from “high-risk customers“, which Kindred defines as players who have closed their account due to addiction or who were detected by Kindred’s player detection system (PS-EDS) for having a high risk.

The group says it has added 24 new criteria for monitoring customer play using web analytics, risk calculations and data points. It also evaluated over 430,000 player survey responses to monitor its KPIs. The company said it had received positive feedback from its 3.5 million active players, saying that 86 per cent of customers believe that Kindred brands offer a “trustworthy online gambling experience”.

Meanwhile, Kindred has renewed its investment in the Glasgow Rangers Charity Foundation‘s Team Talk programme which will see a “significant” investment after initial funding in 2021. Team Talk helps men in Glasgow to seek advice, help and encouragement on issues regarding mental health.