Kindred Group highlights drop in risk detections as Q1 revenue rises 11%
Stockholm-listed operator sees 35% decrease in number of risk detections between March and April on reduced activity and reveals plans to close Roxy Casino, iGame and Bohemia brands
Kindred Group today reported an 11% uptick in gross winnings revenue to £249.7m for Q1 2020.
Underlying EBITDA rose by 37% to reach £42.5m, up from £31.1m in the same period last year, while first quarter profits dipped significantly from £17.7m in 2019 to £2.4m for 2020.
The Stockholm-listed operator was negatively impacted by the Covid-19 pandemic in Q1, especially from 16 March, where cancelled sporting events led to lower sportsbook turnover, although Kindred has reported “solid” revenue growth from other products during the period.
Kindred Group CEO Henrik Tjärnström said in the webcast: “Sports activity is not completely off the cliff but has seen a big decline in actives and revenue as a consequence, although we still have a good offering available in esports, virtual sports and racing.”
In late March and early April, average revenue hit £2.2m per day – a 10% drop on the 2019 average. Q1 active customer numbers also dropped 6% year-on-year to 1,531,302.
Q1 trading was affected by personnel restructuring costs of £1.9m after redundancies were made across the business to improve cost efficiencies, while Kindred plans to reduce its headcount of full-time employees and consultants from 1,850 at present to 1,700 by the end of 2020.
Kindred further revealed plans to close down its Roxy Casino, iGame and Bohemia casino brands to further save costs.
The operator also made a provision of £8m for a regulatory settlement with the Swedish Gambling Authority (SGA) which has been appealed and remains in dispute.
Sticking with Sweden, Tjärnström did not mince his words when responding to proposed measures from Social Security Minister Ardalan Shekarabi to cap deposits at SEK5,000 and bonuses at SEK100 to protect consumers from gambling-related harm during the coronavirus lockdown.
Kindred research suggests there has been no rise in problem gambling rates during lockdown and has even reported a 35% decrease in the number of risk detections between March and April, although the reduced betting activity should be taken into consideration.
Swedish-facing operators have until 7 May to respond to the government’s proposals, which look set to be implemented by the SGA in some capacity on 1 June for the remainder of 2020.
Kindred Group CEO Henrik Tjärnström
Tjärnström said: “I hope the proposals we and other operators submit will be listened to and this will be stopped in its tracks.
“It has been announced seemingly without any consequential analysis of what it would mean for market channelisation, which is already struggling and would implode with those kind of proposals.
“They should be seeking to improve terms for regulated operators and it is hard to see this as anything other than trying to collect cheap points during the debate.
We can’t see the logic and it was presented without fundamental facts, based on indications and hunches,” he added.
Elsewhere, Kindred Group yesterday confirmed the appointment of Johan Wilsby as its new chief financial officer (CFO).
Wilsby will formally join in the autumn as the full-time successor to Albin de Beauregard, who tendered his resignation back in 2019.
Wilsby has served as CFO of Swedish technology firm Tobii since 2017 and has also held the same role at Fingerprint Cards and Swedish tech firm Transmode.