Kindred marks Q2 comeback ahead of July interim statement

Despite the cancellation of live sporting events over the past few months, Kindred Group expects a ‘substantial’ increase in gross revenues during Q2, attributing the growth to technology, esports and virtual sports alternatives.

Ahead of publishing its interim report on 24 July 2020, Kindred anticipates that Q2 gross revenue will equate to approximately £235 million, up from £226.2 million in Q2 2019.

In a media release, Kindred explained: “Substantial growth has been delivered by Kindred’s cutting-edge technology, proprietary Racing platform as well as other events such as esports, and other virtual sports alternatives (e.g. F1, FIFA events).

“Sports activities have gradually resumed during the latter part of the quarter. It is probable that Kindred and other online operators have received a temporary benefit from the fact that most offline betting outlets in many countries have been closed throughout the second quarter.”

Underlying EBITDA is estimated to be in the range of £48 million – £53 million, a significant increase on the £30.5 million recorded in the same period last year. Kindred attributes its earnings growth to ‘the cost reduction actions that Kindred prudently took in connection with marketing, content and other direct costs’.

Kindred added: “While these actions have protected profitability in the short term, now when sports are returning to more normal activity levels, we expect the marketing cost model of the business to normalise as well.

“It is natural that reducing marketing and related costs produce a short-term profit benefit, but if sustained over a long period then these actions could damage the long-term competitive position of the business.”

Active customers for the quarter amounted to 1.3 million, which was a decrease of 11% compared to the same quarter last year, which Kindred explained was in line with expectations due to the cancellation of live sporting events.

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