Online gambling operator Kindred Group set revenue records in the final quarter of 2017 thanks to new acquisitions and the bad luck of sports bettors.
Figures released Wednesday by the Stockholm-listed Kindred show revenue hitting £238m in the three months ending December 31, 2017, a nearly 56% improvement from the same period one year earlier and a new company record. Earnings nearly doubled to £74.5m while after-tax profit shot up nearly 73% to £50.8m.
For the year as a whole, Kindred’s revenue rose 38% to £751.4m, earnings were up 49.5% to £185m and profit gained 40% to £117.4m. Kindred CEO Henrik Tjärnström credited the boffo performance to investments in marketing and product development, and what he called “an exceptional sportsbook margin approximately 50% above the long-term average.”
Gross margins for pre-game sports wagers before free bets were a gaudy 16.2% in Q4, up 6.1 points year-on-year. The margin on all sports bets before free bets was up nearly three points to 11.7%, while the after free bets margin improved 3.5 points to 10.5%.
The overall Q4 numbers were also goosed by last spring’s acquisition of UK-facing online casino operator 32Red, which contributed revenue of £18.8m and earnings of £3.2m. The acquisition also helped boost Q4’s active customer ranks to 1.32m, up 15.5% year-on-year.
The acquisition of another regulated market business also helped push Kindred’s betting duties for FY17 to £113.6m, two-thirds higher than the previous year. Operating costs rose 30% to £306.8m, with most of the extra costs coming via marketing and salaries.
The added UK exposure helped Kindred reduce its reliance on Nordic markets, which saw its share of overall revenue fall four points to 40%, while Western European markets’ share rose six points to 51%.
After suffering a rare decline in Q3, Kindred’s poker product returned to growth in Q4, with revenue up nearly one-third to £4.6m. For the year, the poker vertical improved 22% to £15.2m, a respectable showing in this era of poker impotence, but smaller than the annual growth of sports betting (41%), casino & games (36%) and even the ‘other’ category (34%).
Looking ahead, Tjärnström said average daily gross winnings revenue in the year to February 11 was up 35% from the same period last year (23% if you discount 32Red’s contribution and currency fluctuations).
