Kindred publishes mixed Q3 results as sports betting stalls

Image: Kindred Group

Kindred revealed robust year-to-date performance in its unaudited Q3 trading update as the operator group published revenue growth of 18 per cent to £897m. 

The financial update came amidst the firm’s North American exit announcement, which saw Kindred take cost reduction actions as part of its strategic review by confirming it will fully exit the continent by the end of Q2 2024. 

In the group’s Q3 Interim Report, Kindred witnessed a YTD underlying EBITDA of £148m, marking a 64 per cent increase on last year’s corresponding results. 

Although the year-to-date performance exceeds the previous year, Kindred has still not managed to achieve the heights reached in 2021, when the company earned revenues of £1bn with an underlying EBITDA of £296m. 

Within the Q3 trading period, revenue stood at £283.9m, showing an increase of two per cent on Q3 2022’s £277.8m. 

Meanwhile, Q3 EBITDA stood at £33.9m, a sizable drop of 55.57 per cent from the previous year’s £76.3m, while underlying EBITDA came in at £42.6m, an uptick of 5.7 per cent. 

The Kindred leadership teamsuggested that Q3 trading witnessed growth in the online casino sector, with strengthened positions in both the Netherlands and the UK. 

However, this may have been offset slightly by increasing regulatory challenges in core markets alongside an ‘impacted’ sportsbook performance. 

Interim CEO Nils Andén stated: “I am pleased that we have regained our leading position in the Netherlands since our re-entry in July 2022. We also observe positive momentum in the UK, with a seven per cent growth rate over the same period last year. 

“Despite this, lower-than-expected sports betting volumes across core markets, coupled with a sports betting margin below our long-term average, have adversely affected overall performance.”

The firm’s number of customers did grow in the period, as the Swedish-listed group revealed an active customer base increase of seven per cent from 1.46 million to 1.56 million when compared to Q3 2022. 

The Interim Report suggested that November may provide challenging trading conditions, as daily gross winnings revenue for the group up to November 26 was £3.08m, a slide of 4 per cent from the daily average for the full Q4 2022. 

Despite witnessing some issues across its sports betting segment, the group reinforced its underlying EBITDA guidance for FY2023, projecting at least £200m with the assumption that the segment will return to normal performance. 

Kindred also aims to continue its trend of above-market average growth in core markets, with an estimated market size of £25bn and a projected compound annual growth rate (CAGR) of six per cent over the next five years.

Andén concluded: “I am encouraged by our growing active customer base during this seasonally busy fourth quarter and I expect to see a return to normalised levels of sports betting activity and further positive development in our casino & games segment. 

“Following the actions announced today, I am confident that Kindred will return to above-market growth across its core market portfolio during 2024.”