Netherlands impact contributes to Kindred’s Q2 ‘distorted comparatives’


Kindred’s CEO, Henrik Tjärnström, noted that despite “tough COVID-19 comparatives”, its casino product segment has emerged in a “stable” position from the first half of 2022. 

Publishing its Interim Report from January to June, Kindred reported that – when excluding the Netherlands and comparing its Q2 success to that of the same period in 2021 – the firm witnessed a one per cent increase from casino and games gross winning revenues while active customers were seven per cent lower. 

However, if Kindred were to include the Netherlands in its performance update – which was excluded due to creation of “distorted comparatives” following the end of the firm’s Dutch activity on September 30, 2021, only re-entering the market on July 4 – then gross winnings revenues would have seen a 30 per cent decrease, with active customers for casino and games also dropping by 26 per cent when compared to the same quarter in 2021, respectively. 

Tjärnström noted: “After a period of short-term headwinds, I look to the future with confidence as we see good progress with the Group’s key strategic priorities. We have received our long-awaited Dutch licence, our Kindred Sportsbook Platform (KSP) remains firmly on track, and Relax Gaming continues to show strong numbers. 

“We are also nearing the end of a period of very tough COVID-19 comparatives, which have been giving a skewed view of our performance.

“Despite the tough comparatives, the casino product segment saw a slight increase of one per cent in gross winnings revenue when excluding the Netherlands. I am pleased to see business remaining stable when compared to the exceptional second quarter of 2021 when COVID-19 limited entertainment options.”

Across the company, total revenue, from both its B2B and B2C operations, totalled £238.7m, with its gross winnings revenue dropping by 36 per cent to £233.5m (2021: £363.7m). Excluding the Dutch figures, its company wide gross winnings revenue only witnessed a 13 per cent decline. 

Moreover, Kindred’s underlying EBITDA, which Tjärnström stated was “not satisfying but was equally severely impacted by not accepting bets from the Dutch market” saw a massive 78 per cent drop to £25.3m when compared to 2021, which stood at £113.7m. The company also reported £7m of profit pre-tax (2021: £102.5m), which dropped to £5.8m after tax (2021:87.1m). 

Alternatively, when looking at the same figures in the first half of 2022, the company’s total revenue from both its B2B and B2C operations dropped from £716.3m in 2021 to £485.4m in 2022. 

Furthemore, its gross winning revenue for H1 this year witnessed a 34 per cent decrease to £475.9m (2021: 716.3m). However, removing the Dutch comparatives only saw Kindred’s revenues decline by 10 per cent.

The company’s underlying EBITDA in the first half of 2022 saw a similar dramatic drop to its Q2 figures at 77 per cent to £49.8m when compared to the same period in 2021 – £219.7m.

Profits pre-tax for H1 2022 came in at £14.6m (2021:187.8m) with post-tax totalling £12.2m (2021:159.7m).

On Kindred’s entry into the Dutch market, Tjärnström commented: “We opened our doors to Dutch players on July 4 and have seen strong customer intake and activity in the period between July 4 and 19. I am very pleased with this initial performance and expect to see our Unibet brand gradually reclaim a leading position in the Netherlands. 

“With the Netherlands being live, we are now waiting for the UK Gambling Act Review to be published. During the last year, the UK market has been impacted by stricter affordability checks self-imposed by the industry. These measures can be expected to increase over the coming quarters. Whilst impacting revenues in the short term, this ensures a more sustainable customer base.”

The report also delved into Relax Gaming’s revenue, which Kindred acquired on October 1, 2021. The new holding was factored into  Kindred’s condensed consolidated income statement, including only revenue generated by Relax Gaming from all gaming operators, excluding its new owner.

During the second quarter this year, Relax’s revenue totalled £5.2m, which was 20 per cent higher than the same period last year, attributed to the launch of six new games, along with the supplier’s Dream Drop jackpot feature launched in May. 

On Relax, Tjärnström stated: “Relax Gaming is performing well. The team is continuing to deliver high new operator intake and new product releases, such as the ‘Dream Drop’ jackpot which has provided a unique feature that is appreciated by both the end customer and game suppliers.”