Kindred: online gambling adoption will be coronavirus silver lining


kindred-group-coronavirus-online-gambling-silver-liningNordic online gambling operator Kindred Group wants the investment community to remember how young and virile they were before the stupid coronavirus came along and spoiled things.

On Thursday, the Stockholm-listed Kindred issued an update on “the initial impact of COVID-19” on its operations. Citing the “exceptional circumstances” and the need to ensure that Kindred is “well capitalized for future investment opportunities,” the company is now recommending no 2019 dividend be paid to shareholders.

Kindred, the parent company of Unibet, will publish its official Q1 financial figures on April 24 but the company said it estimates revenue will come in between £247m-252m (up from £224.4m in Q1 2019). Kindred says sports margins were up 2.5 points to 12.2% prior to “the disruption of sports in the middle of March” as the COVID-19 pandemic took hold.

Like some other operators, Kindred said the reduced sportsbook turnover was “partially compensated by solid growth in revenues from other products.” Nonetheless, daily average revenue from March 16-31 was around £2.2m, 10% lower that the daily average throughout 2019.

Kindred CEO Henrik Tjärnström boldly predicted that the COVID-19 impact on the company’s operations would be “temporary, with sports activities gradually resuming during or after the summer.” Tjärnström said Kindred would adjust its marketing spend accordingly, while also reducing costs and delaying certain investments while it rides out this storm.

Tjärnström also offered a potential silver lining to the corona-clouds, in that “social and behavioural changes that are already happening will accelerate the migration from offline to online,” with Kindred poised to reap the benefits. Or, you know, global unemployment remains in double-digit territory for an extended period and nobody has anything remotely resembling discretionary income, but tomato, tomahto.

Kindred’s shares were down 4.4% to SEK33.24 at the close of Thursday’s trading, a far cry from the SEK58.50 at the start of the year but a far sight better than their March 19 low of SEK23.02 (which came after Sweden’s gambling regulator hit the company with a record SEK100m fine for alleged bonus offer abuse).

Like many other operators, some of Kindred’s senior management used the temporary depression of its stock price to boost their holdings. Chairman Anders Ström recently added 330k shares at a total cost of SEK6.9m, boosting his Kindred stake to 3%.