Kindred Group Plc’s focus on regulated European markets, alongside a return of a strong sporting calendar, has helped drive the operator’s growth during Q1 2021.
Publishing its financial results for the three months ended 31 March, Kindred reported that EBITDA had jumped from £32.5 million in the corresponding period last year to £97.6 million – something which the operator group believes has been driven by ‘strong business momentum and continued focus on scalability’.
Profit after tax amounted to £72.6 million for the quarter, somewhat of a significant increase when compared to the £1 million reported in Q1 2020 – benchmarked against early COVID-19 group-wide adjustments.
Kindred explained that it has benefited from the ‘continued migration from offline to online’ which has led to a 19% rise in the number of active customers from 1,531,302 to 1,818,759.
“The positive momentum from 2020 has continued into 2021 across our markets and product segments,” commented Henrik Tjärnström, CEO of Kindred Group.
“We ended 2020 with a new all-time high in active customers and I’m pleased to see this trajectory continuing into the first quarter of 2021 with a new active customer record of over 1.8 million. It’s particularly encouraging as we look forward to an exciting year of sport ahead.”
Gross winnings revenue for the group during the January to March period surged by 41% to £352.6 million, with gross profit up 49.47% from 2020’s £140.7 million to £210.3 million.
Kindred’s sportsbook unit saw a 30% increase compared to Q1 2020 which has been driven by a busy sports calendar and spacing between matches – something which it noted has produced less cannibalisation of bets.
European markets were highlighted as a key focus for Kindred. Revenue in Western Europe rose 58% to £240.9 million – up from £152.9 million in Q1 2020.
The operator noted that its main markets, which includes UK, Belgium, France and the Netherlands have all performed well despite weaker sports betting margins.
Kindred saying that its main markets, including the UK, Belgium, France and Netherlands, performed well despite weaker sports betting margins
UK performance built ‘on the exceptionally strong 2020 results’ with Q1 2021 resulting in ‘another all-time high for revenue’ as gross winnings revenue ‘ more than doubled compared to the equivalent quarter in 2020’.
The Nordics scored a 1% rise to £67.8 million, with continued compliance with COVID-19 measures implemented by the Swedish government, such as deposit limits and further restrictions to bonus offers, bringing a drop in casino revenues. This was driven by a decline in average revenue per user, with casino active customers increasing.
Central, Eastern and Southern Europe is up 33% to £29 million – up from £21.8 million in Q1 2020 – with Romania, where Kindred operates the Unibet and Vlad Cazino brands, the biggest contributor. Revenue in the ‘other regions’ segment finished up with a 91% revenue increase to £14.9 million.
Tjärnström continued: “Our focus on sustainable growth in locally regulated markets is proving effective, with Kindred gaining market share in many markets, including the UK despite it being a mature and highly competitive market.
“In the US, our long-term investments are continuing to pay off, with Gross winnings revenue increasing 185% compared to the same period last year.
“The coming months leading up to what will be one of the largest betting events in history – the UEFA Euro 2020 – will be very exciting and I know the team is busy preparing.
“The Kindred team have always managed to deliver a safe, exciting and memorable customer experience during major events, and I am fully confident this year’s events will be no exception.”
Offering its analysis on the results, Regulus Partners said: “Q2 is likely to be exceptionally strong given the Euros soccer tournament replaces two months of no premium sports content, while gaming run-rates are still c. 20% higher than this time last year; thereafter comps become more challenging.
“Kindred is one of the few .com businesses that has been able to adapt to domestic regulation, especially in more closed markets such as France and Belgium. With the US as a ‘special situation’, Kindred clearly has a very low current exposure to secular growth markets outside its North West European core. Whether it can successfully expand into less mature markets either organically or via M&A will probably decide the extent to which Kindred gets caught in its own market maturity profile.”