Kambi shows EBITDA growth ahead of spin-off
Sportsbook supplier reveals 24% rise in revenues and 366% increase in EBITDA ahead of planned separation from Unibet
Kambi Sports Solutions revealed a leap in EBITDA to 1.4m during the first three months of 2014 after reporting a 24% sequential rise in revenues.
The sportsbook provider, which is currently 95% owned by Unibet, is likely to become an independent entity next month when Unibet shareholders are expected to vote through the proposed separation at the Group’s AGM on 20 May.
And Kambi used this morning’s Unibet results presentation to reveal the company’s cash flow broke even during Q1 for the first time after recording sequential growth in both revenues and EBITDA.
Revenues grew from £6.2m in Q4 2013 to 7.7m in Q1 2014, an increase of 24%, while EBITDA was up from 0.3m to 1.4m across the same period, while revenues for 2013 were 21.2m.
Kambi chief executive Kristian Nylen stressed that the business was largely dependent on the sporting calendar and said its Q2 performance would rest on a busy and result-friendly World Cup.
However, he added that Kambi’s imminent spin-off should act as a catalyst for future growth, having conceded that its association with Unibet had occasionally provided an insurmountable hurdle when attempting widen a customer base which, as well as Unibet, also includes the likes of 888 and Paf.
“Unibet is a major rival to some of the operators we have spoken to,” Nylen said. “Our relationship with Unibet has acted as a blocker to discuss potential deals.
“Operators have brought odds compilation in-house over the years but we now see this trend reversing,” he added. “It’s too hard to do it yourself and at the quality we are able to do it so we hope our product will force them [operators] into it [looking at us].”
The separation would see Unibet shareholders hold 95% equity in Kambi at around £2 per share based on an independent valuation by accountancy firm KPMG. The remaining 5% is held by Kambi management employees.
Prior to listing, Kambi’s balance sheet will be strengthened by an equity issue and a convertible debt instrument from Unibet. The equity issue is based on a KPMG valuation and will provide Kambi with the equivalent of a minimum of 21.9m.
The debt is repayable on 1 January 2019 however Unibet holds the right to convert the debt into new shares in Kambi upon certain events.
Kambi also revealed it has secured a long-term 7.5m commercial deal with Unibet which will see it provide the operator with its sportsbook services until the end of 2018.