Kindred Group estimates 4% Q2 revenue climb despite Covid-19 impact
Operator’s financial figures primed for esports and virtuals boost as retail customers migrate online
Kindred Group has forecast a 4% revenue increase to £235m for Q2 2020 despite the coronavirus pandemic playing havoc with the global sports betting calendar.
The predicted growth, up from £226.2m last year, was driven by Kindred’s technology and proprietary horseracing platform, as well as upticks in the esports and virtual sports verticals, including on F1 and FIFA events.
The Stockholm-listed operator also revealed what it described as a “temporary benefit” of customers transitioning to online while retail outlets remain closed in several key markets.
Underlying EBITDA for Q2 2020 is estimated to be between £48m-£53m, up from £31m in 2019, due to cost cutting across marketing, content and other direct costs to protect cash levels.
“While these actions have protected profitability in the short term, now when sports are returning to more normal activity levels, we expect the marketing cost model of the business to normalise as well,” the operator told investors.
“It is natural that reducing marketing and related costs produce a short-term profit benefit, but if sustained over a long period, then these actions could damage the long-term competitive position of the business.”
The operator also received a Q2 tax boost where betting duties were significantly below Q1 levels because sport cancellations were strongest in France, where tax rates are the highest.
Active customers for the quarter reached 1.3 million, an 11% decrease year-on-year as many recreational customers are motivated by sports events that did not take place.
Kindred will continue to implement cost-saving measures throughout 2020, as first revealed in the operator’s Q1 2020 report.
Kindred Group’s official Q2 2020 report will be published on 24 July.