Kindred Group share price plummets 20% on Q4 guidance
Stockholm-listed operator primed for poor fourth quarter due to weak sports margins and regulatory upheaval
Kindred Group’s share price fell by more than 20% in early trading after the Stockholm-listed operator issued a Q4 profit warning.
The firm warned that gross winnings revenue (GGR) was negatively impacted heading into Q4 across most markets due to weak sports betting margins and increased regulation.
Fourth quarter revenue is expected to come in at £235m, down from £250m in 2018, while underlying EBITDA is likely to be between £27m and £32m – a figure almost halved from 2018 levels of £58.8m.
The operator’s margin after free bets was 8.1% for the quarter, compared to 9.4% in the same period last year, although year-on-year sportsbook turnover increased by 3%.
The most significant change in betting margin occurred in France, where betting duties were calculated based on turnover until January 2020. They are now based on GGR, which should stabilise performance, according to the operator.
Regulatory changes in Sweden and the Netherlands have also had a negative impact, although Swedish performance improved marginally in comparison to previous quarters.
Updating the market, Kindred management pledged to implement “a number of additional operational efficiency initiatives” to inspire revenue and EBITDA growth in 2020.
The operator’s Q4 financial report will be published on 12 February 2020.
In contrast, UK bookmaker William Hill issued a full-year trading update yesterday with figures boosted by a strong Q4 sportsbook margin.