Kindred Group announced last week its 2019 financial results for the fourth quarter and full year.
Gross winnings revenue amounted to GBP 236.2 (250.1) million for the fourth quarter of 2019, and GBP 912.8 (907.6) million for the full year 2019, while underlying EBITDA for the fourth quarter of 2019 was GBP 30.7 (58.8) million, and GBP 130.0 (203.7) million for the full year 2019.
"The initiatives we have taken in Sweden to return to growth has resulted in continued recovery from the low EBITDA in the first half of the year; however, compared to the fourth quarter of 2018 the EBITDA from Sweden was still down by GBP 6.6 million," CEO Henrik Tjärnström explained.
Net cash generated from operating activities for the fourth quarter of 2019 amounted to GBP 30.5 (65.2) million and GBP 120.3 (206.4) million for the full year 2019.
Profit before tax for the fourth quarter of 2019 amounted to GBP 13.3 (45.0) million, and GBP 67.1 (149.5) million for the full year 2019, while profit after tax for the fourth quarter of 2019 amounted to GBP 10.9 (39.3) million and GBP 56.6 (131.6) million for the full year 2019.
Earnings per share for the fourth quarter of 2019 were GBP 0.048 (0.173) and GBP 0.250 (0.580) for the full year 2019.
"Some of the factors that impacted the fourth quarter of 2019 were the same as we reported in previous quarters, such as the Swedish regulation and increasing restrictions in the Dutch market," Tjärnström said. "These and other headwinds are a normal part of our business that we address, adjust to and, over time, use as a competitive advantage."
"As we noted in our trading update on 13 January 2020, there were some temporary factors that reduced the profit for the fourth quarter. We had below-average sports betting margins in many markets, including France. The French turnover-based gambling tax increased the negative effects of the low margins significantly, however the tax system in France changed on 1 January 2020 to a tax on revenues," he continued.
"We also had the first full quarter of trading in the locally regulated US states of New Jersey and Pennsylvania. It was expected that the first months of trading in the US would be loss-making which is completely in line with Kindred’s experience of launches into other new markets. This is logical as revenues grow from zero in response to our marketing investments, which includes initial marketing production costs (USD 2 million) to go live that will be used longer term. I am confident that we will see continued improvements in 2020 as our business in the US grows and our revenues increase. The US is the market with the largest long-term growth potential as regulation gathers pace, with the US online sports betting market estimated to be USD 13.6 billion by 2023 (by the independent research firm Eilers & Krejcik Gaming)."