Kindred Group released Thursday a series of updates addressing the initial impact the "exceptional circumstances caused by the coronavirus pandemic" have had on the company.
Kindred has had a good start to the year, the company reported, with gross winning revenue for the first quarter of 2020 estimated to be in the range of GBP 247-252 million (Q1-2019: GBP 224.4 million) unaudited.
The gross winning revenue was positively impacted by strong sports betting margins in the period up the disruption of sports in the middle of March 2020. Despite this, the margin before free bets was 12.2 percent for the quarter, compared to 9.7 percent in the first quarter of 2019.
The full impact of canceled sports events was largely effective from 16 March 2020, which resulted in lower sportsbook turnover, however partially compensated by solid growth in revenues from other products. As a very short-term indication, during the period 16 March to 31 March 2020, the daily average gross winnings revenue was GBP 2.2 million, which was 10 percent lower than the average for the full year in 2019 (11 percent in constant currency).
"We expect the impact of the coronavirus on our business to be temporary, with sports activities gradually resuming during or after the summer," said CEO Henrik Tjärnström. "In order to reduce the earnings impact of temporarily lower sports revenues, we will adapt our cost base through reduced levels of marketing spend, lower operating costs and delaying certain investments."
Due to the uncertainty caused by COVID-19 and to ensure that Kindred is well-capitalized for future investment opportunities, the Board has decided to change the previously communicated proposal on the 2019 dividend and will recommend to the AGM that no dividend is paid.
Kindred has also taken steps to protect employees and to ensure continuity of operations by adjusting ways of working so that, wherever possible, employees work from home. "As a modern technology-based company, this has been achieved with minimum disruption to the business. Kindred is also working closely with all its partners to continue to provide an attractive sports and racing offer where possible and to be ready for normalized levels of sport activity," the company explained.
"While the current situation presents several challenges, I remain very positive about Kindred's future outlook. Kindred will continue to benefit from a wide geographical reach and a broad product mix as well as a business model which has been resilient during previous times of economic downturns," Tjärnström continued. "I also believe that the social and behavioral changes that are already happening will accelerate the migration from offline to online, which will benefit digital operators like Kindred. Our focus on player safety and care for our customers will naturally continue with the same dedication."
Kindred also announced that it will publish results for the first quarter on 24 April 2020. The results presentation and Q&A session will be available through webcast as usual. The previously planned physical meeting at Regeringsgatan 25 in Stockholm will not take place. The arrangements for the results announcements for subsequent quarters will depend on the relevant advice from public authorities.