Online gambling operator Kindred Group reported record revenue in the final quarter of 2020 on stronger sports margins, higher customer engagement and aggressive cost-cutting.
In a trading update released Tuesday, the Stockholm-listed Kindred reported all-time high revenue of £365m in the three months ending December 31, 2020, up 55% from the same period last year and around 30% better than the company reported in Q3 2020. Final figures won’t be released until February 10 but eager investors sent the stock up 5% by Tuesday’s close.
Kindred credited the revenue surge to a variety of positive benchmarks, including a record 1.78m active customers during Q4, up 11% year-on-year. Another contributing factor was a 10% sports margin, up around 1.5 points from the long-term average.
Kindred expects Q4 earnings to come in around £115m, a nearly four-fold rise from Q4 2019’s £30.7m and only £15m below the company’s full-year 2019 earnings. Possibly fearing a media and/or regulatory backlash from such a bottom-line surge, Kindred played down the gains, saying only that the result was “significantly higher than the current consensus.”
Kindred claimed the earnings bounty stemmed from its “continued focus on operational efficiency and costs.” Kindred trimmed its staff headcount as the pandemic took hold and scaled back its marketing efforts during the halt of major sports play. The company’s marketing spend rose steadily as sports returned but “improved marketing efficiencies” and the revenue surge kept Q4’s marketing spend to around 21% of gross revenue.
Kindred spent much of Q4 reinvesting its profits to both ensure stability in its established markets and expand its toehold in the US. Last October, Kindred struck a £25m deal to purchase Rank Group’s last Belgian casino to ensure the Unibet brand’s right to remain in that market. That same month, Unibet announced a marketing tie-up with the Philadelphia Eagles to bolster its Pennsylvania-licensed online casino.
It remains to be seen whether Kindred can continue its bull run as more of its key markets tighten their regulatory belts. Last week, Kindred’s affiliate marketing partners were instructed to remove all promotions and advertisements for Unibet Germany’s slots and poker products “to comply with new German regulatory requirements.”