Kindred Q3 boosted by World Cup, Western Europe growth

TAGs: kindred group

kindred-world-cup-sports-bettingOnline gambling operator Kindred Group reported strong double-digit gains in revenue, earnings and profit in the third quarter of 2018.

Figures released Friday show the Stockholm-based Kindred reporting gross winnings revenue of £230.7m in the three months ending September 30, up 19% from the same period last year. Earnings also improved 19% to £55.5m and after-tax profit rose 23.4% to £36.9m.

Kindred CEO Henrik Tjärnström claimed that the one-quarter rise in active customers during the quarter justified his company’s decision to boost its marketing spending by 24% prior to this summer’s FIFA World Cup. Tjärnström noted that the earnings rise came despite this marketing increase and a one-third rise in betting duties.

As one might expect from a World Cup quarter, sports betting claimed the largest share of Q3 revenue, albeit just barely. Betting revenue was up 29.6% to £111.1m, with in-play bets accounting for 63.8% of turnover and 55.2% of revenue. The overall sports betting margin (after free bets) was 8.5%, up 0.8 points year-on-year.

Kindred’s 2018 World Cup was a significant improvement over its 2014 tournament experience. The number of individual wagers was up 112% from 2014, turnover rose 163% to £295m and revenue rose 119% to £35m. Sadly, the betting margin fell 2.4 points to 11.9%.

The casino & games vertical was a close second on the Q3 revenue chart with £109.9m, up 11% year-on-year. The poker vertical had a stellar quarter, shooting up 47% to £4.4m, and up 10% from Q2 (although still below the £4.6m reported in Q1). The ‘other’ category was less fortunate, falling 5% to £5.3m.

Kindred continues to lessen its early reliance on Nordic markets, which accounted for 34% of Kindred’s overall revenue (down from 45% just two years ago), a modest 3% year-on-year gain. By contrast, Western European market revenue was up 29% year-on-year for a 56% share of the overall pie.

The Central, Eastern and Southern Europe category produced the largest year-on-year growth (+44%), although its share of the total remains in the single-digits (8%). The ‘other’ geographic category was down 14% year-on-year, reducing its share to 2%.

Kindred derived 42% of its Q3 revenue from ‘locally regulated markets,’ and this figure is likely to increase in the new year. Kindred has applied for a new Swedish online gambling license ahead of that market’s scheduled liberalization on January 1, and Kindred has also applied for an online license in New Jersey, where the company has partnered with the Hard Rock Atlantic City casino and platform provider SG Digital.

In the meantime, Kindred says the fourth quarter of 2018 has started off on a negative note, with daily average gross winnings revenue down 5% in the period up to October 24. However, Kindred says the decline is primarily down to a tough comparison with Q4 2017, which featured an absurdly high win-rate.


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