The growth was aided by a higher than average sports betting margin

Kindred sees 11% revenue growth, profits hit by exceptional charges

Kindred Group CEO Henrik Tjärnström reported a non-cash charge of GBP 10.8 million (USD 13.4 M) in the first quarter.
2020-04-27
Reading time 1:47 min
The company's EBITDA amounted to GBP 32.5 million (USD 40.3 M), up from GBP 30 million year-over-year, despite reporting a number of "items affecting comparability." The CEO said revenues and margins are less volatile in current circumstances because of the reduced proportion of revenues coming from sports betting.

Kindred Group released Friday its interim report for the first quarter of 2020. Gross winnings revenue amounted to GBP 249.7 million (USD 309.8 million) for the first quarter of 2020, returning to double-digit growth in gross winnings revenue of 11 percent (14 percent in constant currency) from the same period last year. The growth was aided by a higher than average Sports betting margin, according to the company.

Underlying EBITDA for the first quarter of 2020 was GBP 42.5 million (USD 52.7M), up from GBP 31.1 M in Q1 2019. Kindred maintained an improved EBITDA of GBP 32.5 million (USD 40.3 M), up from GBP 30 million year-over-year, despite reporting a number of ‘items affecting comparability’, with the group choosing to absorb specific charges related to ‘disputed regulatory sanctions’ (GBP 8 M) and ‘accelerated amortisation costs attached to acquired assets’ (GBP 10 M) during period trading.

Despite reporting improved top-line results, accounting for significant exceptional charges Kindred declared operating profits of GBP 7.3 million (USD 9 M), down from GBP 15 million in the same period of the prior year.

The number of active customers during the first quarter was 1,531,302, down from 1,631,636.

Kindred Group CEO Henrik Tjärnström said: “As part of the previously communicated plans to review the Group’s cost base, we have recognised a charge of GBP 1.9 million in the first quarter of 2020 in connection with restructuring costs. We have additionally decided to rationalise the Group’s brand portfolio and have announced the pending closure of several smaller brands. This, together with a wider review of acquired intangibles, has triggered a non-cash charge of GBP 10.8 million in the first quarter.”

He said that daily revenues for the period from 1 to 19 April have continued to be around GBP 2.2 million, and explained that revenues and margins are less volatile in current circumstances because of the reduced proportion of revenues coming from sports betting. “The largest decline in daily revenues has been in France, which is expected due to its high reliance on sports, but it remains a low margin territory for Kindred because of the high betting taxes,” he added.

“As a pure digital company, we are well prepared and ready to take the opportunities that will come when markets start to normalise. I am very confident that Kindred’s well-diversified and financially sound business model will enable us to emerge stronger over the coming quarters,” Tjärnström concluded.

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