Kindred H1 rocked by compounded KOA and Euro market drags 

By | July 22, 2022

Kindred Group Plc has reported a further frustrating quarterly trading period as business performance continues to be interrupted by short-term Euro market headwinds. 

Publishing its H1 2022 interim trading results, the firm registered a 32% drop in year-to-date corporate revenues (B2C+B2B) to £485m (H12021: £716m).

Reflecting a further trading period with no income generated from the Dutch market, Kindred reported Q2 gross winnings of £238m, down 32% on 2021 results of £363m.

Having ceased its Dutch trade in October 2021, observing KOA market rules, the company reported a fourth consecutive quarter of sports betting declines to £98m (Q22021: €170m).

The Stockholm-listed group cited that “excluding the Netherlands, sports betting turnover saw a decline of 20 per cent in the second quarter of 2022 compared to the second quarter of 2021”, as unit performance was matched against record COVID-influenced 2021 outcomes.

“The second quarter is a seasonally low period of activity as sports leagues end, with major football tournaments only taking place every other year,” remarked Group CEO Henrik Tjärnström.

“With an exceptional period of sports in 2021, with Euros 2020 causing higher-than-normal activity during Q2 2021, we are now back to a normal sports calendar.”

Meanwhile, despite registering improved quarterly revenues of €123m, Kindred Casino & Games unit results were down 53%, matched against 2021 record comparatives.  

“Despite the tough comparatives, the casino product segment saw a slight increase of 1 per cent in Gross winnings revenue when excluding the Netherlands,” Tjärnström’s statement reflected.

“I am pleased to see business remaining stable when compared to the exceptional second quarter of 2021 when COVID-19 limited entertainment options.”

Providing a regional breakdown, Kindred highlighted several Western Market headwinds (beyond Dutch impacts), which saw regional gross winnings halved to £119m.

The UK market was reported to have been slowed by 17% due to stricter self-imposed affordability checks demanded by the industry – whilst in France, Kindred saw a 34% reduction in gross winnings due to a volume reduction in sports betting, in contrast to the market’s peak 2021 activity.

Elsewhere, Kindred recorded stagnant home market results, as Nordic unit revenues stood at £74m – in which improved casino results could not mitigate against a ‘quieter sports calendar’.

The slow-down in Western activity was reflected in Kindred KPIs, as for a third consecutive quarter the group recorded an active player decline to 1.3m – down 30% on record Q1 2021 results of 1.9m players.

Kindred’s Q2 registered a 75% decline in group EBITDA to £25m as compounded negative quarters saw YTD EBITDA results decrease by a further 77% to £50m (YTD2021: £219m).

Interim period trading saw the group report lower costs of sales of £220m, which reflected smaller outgoings in betting duties and marketing rev-share costs.

Irrespective of its headwinds, Kindred maintained Q2 profitability at £7m (Q22021: £103m), as YTD profits currently stand at £15m (YTD2021: £187m).

Kindred heads into a critical H2 trading period, which will see it return its business to the Dutch KOA market. Tjärnström stated: “On 8 June we finally received our licence from the Dutch Gambling Authority (KSA) and a process to connect all our systems and processes to the KSA began.

“We opened our doors to Dutch players on 4 July and have seen strong customer intake and activity in the period between 4 and 19 July. I am very pleased with this initial performance and expect to see our Unibet brand gradually reclaim a leading position in the Netherlands.”

Further H2 group objectives will see Kindred accelerate the development of both its proprietary sportsbook and newly acquired Relax Gaming studio.

Tjärnström commented on Tech developments: “We are recruiting spearhead competence to our tech and product teams, and the spirit in these teams is high.

“Once operational, our key projects  will give us a unique and important flexibility to tailor our offering towards our customers across the world, providing them with an unforgettable experience and providing Kindred with a highly scalable platform while reducing our cost base.”

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