Financial report

Kindred sees 2021 revenue up 11% to $1.6B despite Q4 hurdles; launches share buy-back program

Kindred Group CEO Henrik Tjärnström.
Reading time 2:41 min

Online gambling operator Kindred Group has shared its financial report for Q4 2021 and the full fiscal year. The company is calling it its “strongest year to date,” despite temporary headwinds experienced in the last quarter.

For the full year, total revenue (B2C and B2B) amounted to 1.2 billion ($1.6 billion). Gross winnings revenue increased by 11% from 2020 to 1.2 billion ($1.6 billion), while underlying EBITDA grew by 15% to £332 million ($450 million).

The positive news comes despite a tough fourth quarter, in which the Nasdaq Stockholm-listed business experienced a series of hardships. In Q4, total revenue was £244 million ($330 million), with gross winnings revenue decreasing by 34% to £240 million ($325 million). Underlying EBITDA harshly fell by 77% to £27 million ($36 million).

“Closing off 2021, we can look back at a strong year despite a slightly more challenging fourth quarter,” commented CEO Henrik Tjärnström. “Exceptionally strong numbers in 2020 led to tough comparatives for the quarter but despite the low sports betting margin at the beginning of the quarter, and the fact that we ceased services to Dutch residents, our fourth quarter delivered solid revenues.”

While it has now ceased its Netherlands services, the company submitted, at the end of November, a Dutch license application, with the process “advancing according to plan.” Subject to license application approval, the group looks forward “to being a close partner to the Dutch community stakeholders” and contributing to a sustainable gambling industry in the country.

Also in Q4, the company finalized its acquisition of B2B iGaming software supplier Relax Gaming. The company is now working towards achieving the identified annual synergies of £6.9 million ($9.3 million), as well as leveraging unique Relax content “to differentiate our B2C product suite,” Tjärnström said.

“With the North American business in its infancy, our more mature markets in Europe and Australia have performed well during the fourth quarter,” the CEO added. “If we exclude the US, our markets in Europe and Australia grew revenue for the full year by 12% compared to 2020 and delivered growth in underlying EBITDA of 19%. This indicates the strength in our core market performance.”

The business also issued a trading update up to and including February 6, a period in which the average daily gross winnings revenue for the group was 26% lower than the daily average for the full first quarter of 2021. However, excluding the Netherlands, the average daily gross winnings revenue for the group for the period was in line, 4% higher than Q1 2021.

Following the revenue report and the trading update, Kindred Group’s Board of Directors announced it decided to start exercising a buy-back mandate received at an extraordinary general meeting on June 10, 2021. The program will run between February 10 and May 12, 2022, and amounts to a total of up to SEK 300 million ($33 million).

The purpose of the program is to return excess cash to shareholders in line with the company’s distribution policy. Kindred has now entered into an irrevocable agreement with Nordea Bank Abp to conduct the share repurchases on its behalf.

The acquisition of shares is set to take place on Nasdaq Stockholm or other regulated markets, and Nordea will make its trading decisions in relation to Kindred’s shares without influence by the group. The maximum number of shares that can be repurchased is 6 million, and the company’s holdings of its own shares may not exceed 10% of total outstanding shares.

At the time of the announcement, the total number of outstanding shares in the company is  230.1 million and Kindred’s holding of its own shares is 7.4 million. The program does not permit share repurchases to be executed during the closed period ahead of the first quarter 2022 interim report publication, between March 28 and from April 29.

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