Publishing its Q4 2017 trading update (period ending 31 December), industry sports betting platform provider Kambi Plc has detailed a strong finish to its full-year trading.
The Nordic Nasdaq-listed enterprise, reports Q4 2017 revenues of €19 million a 33% increase on Q4 2016’s €14.3 million, with performance aided by favourable sporting results recorded during the period.
A strong revenue momentum which was supported by a significant 26% operating margin, sees Kambi declare a period operating profit (EBIT) of €5 million (Q4 2016: €1.8 million).
Closing its successful trading quarter, Kambi governance declares group profits of €3.9 million (Q4 2016: €1.2 million).
For its full-year 2017 trading, Kambi reports a group EBIT of €7.7 million (FY 2016: €8.8 million) combined with corporate profits of €5.9 million (FY 2016: €7.5 million).
Kambi 2017 earnings have been impacted by severe adverse sporting results recorded across its client portfolio during H1 trading. As a result, Kambi 2017 operating margins have been at a lower rate of 7%, despite the company achieving revenue growth of €62 million (FY 2016: €56 million).
Closing 2017 trading, Kambi governance details a successful year for its commercial operations, with the company securing long-term supplier extension contracts with European operator LeoVegas AB, Paf (Finland) and Napoleon Games (Belgium).
Furthermore, Kambi secured a multi-channel deal with leading South African casino operator Sun International, representing the eighth consecutive quarter in which Kambi has added at least one new customer.
Commenting on Q4 2017 trading, Kristian Nylén Chief Executive of Kambi Plc stated; “I’m delighted to report Kambi ended 2017 on a high, with the fourth quarter delivering record revenues, a new customer signing and three customer contract extensions. We are entering 2018 with strong momentum.
The period’s headline figure was the 33% increase in revenues to €19m, Kambi’s largest quarterly revenue to date. This sizeable increase was primarily due to an extended run of favourable sporting results, which started in Q3 but continued into Q4 with even greater regularity, resulting in a high operator trading margin of 9.7%.
While the Q4 result is pleasing, it is important to view operator trading margin with a long-term perspective. Our 12-month operator trading margin was 7.4%, a figure more in line with our previously communicated expected range of 6.5-7%. Therefore, just as we weren’t overly concerned by below average margins in the first two quarters of 2017, we are not getting carried away with the higher than average margins of recent quarters.
The quarter also saw Kambi continue its run of new business wins, with the signing of Sun International making it eight consecutive quarters in which we have signed at least one new customer. As one of the largest and most respected land-based casino operators in the southern hemisphere, Sun International is a great addition to the Kambi network. Sun International also operates a South Africa-facing online sportsbook which, once switched to Kambi in the coming months, will increase our regulated footprint to six continents, making Kambi a truly global sports betting supplier.
With LeoVegas, Paf and Napoleon Games all signing long-term contract extensions, and an increasingly realistic proposition of a legal US sports betting market in the not-too-distant future, Kambi has never been in better shape and I’m personally excited for the year ahead.”