Kambi Q1 revenues rise despite punter-friendly results
Sportbook supplier displays strong underlying growth with revenues rising 7% and operator turnover up 23%
Kambi this morning posted a 7% rise in Q1 2017 revenues to €14.2m, despite the firm suffering from a run of costly accumulator pay outs.
A string of punter-friendly results during the period, which the sportsbook supplier described as “many player-friendly outcomes”, saw average operator trading margin before deductibles fall to 6.2%.
The firm, which was this week shortlisted for three EGR B2B Awards, revealed while margin from pre-match singles was up year-on-year, accumulator margin fell by approximately 50%.
However, the margin reduction looked to have had a positive recycling impact, as operator turnover growth improved by 27% across the three months to 31 March.
The results come three weeks after the supplier, which provides its sportsbook to tier-one customers such as 888 and Unibet, released a trading update warning of a profit dip.
And as a result of the pay outs, Kambi margin was down from 15% to 10%, which subsequently saw EBIT fall 30% to €1.4m.
However, Kambi CEO Kristian Nylén today said unfavourable sports results were part and parcel of the sports betting business and highlighted the supplier’s underlying growth trends.
“I’m very pleased to see continued success from our operators, as demonstrated by their ongoing rapid growth trend,” Nylén said.
“The latter part of the quarter resulted in an unusually high number of player-friendly outcomes in the major football leagues, which impacted the trading margin. It is in the nature of the business for the trading margin to fluctuate between quarters depending on the result of sporting events.
“The underlying strong performance and momentum within the company is unaffected by these events. This makes me confident in our strategy and business model which creates value for our operators,” he added.
During the quarter, Kambi signed an agreement with Greentube – a subsidiary of Novomatic – for its online B2C operations across Europe.
And in an analyst call, Nylén said Kambi would provide Greentube brands with sportsbooks in the regulated and/or taxed markets of Italy, Germany, Spain and Romania, with the roll-out to begin this summer.
The chief exec also welcomed news of likely regulation in Sweden by 2019, and suggested the firm could find new business in the shape of the country’s state-owned operators and new entrants to the market.
Kambi’s share price, which trades on First North at Nasdaq Stockholm, was up marginally to SEK87 at the time of writing.