Kindred Group Q4 revenue slumps by a third as firm blames “temporary headwinds”

Kindred Group has posted a 33% year-on-year (YoY) fall in revenue for the fourth quarter of 2021.

The operator revealed revenue came in at £224.9m, down from £364.7m in the corresponding period in 2020, and down on the £298.4m generated in Q3 2021.

Underlying EBITDA plummeted 77% YoY in Q4 to £27.6m, although the £332.1m in full-year EBITDA was up 15% on 2020, while Q4 active customers fell 18% (YoY) to approximately 1.46 million,

Despite the disappointing end to 2021, Kindred Group said 2021 was its “strongest year ever” as revenue increased 11% from £1.13bn to £1.26bn.

CEO Henrik Tjärnström pointed to “temporary headwinds” including the cessation of services in the Netherlands from 1 October and “exceptionally low sportsbook margins” at the start of Q4 as major factors in the decline.

Sports betting margin of 8.5% after free bets was below the three-year average of 9.1% and well down on the 10% recorded in Q4 2020.

Gross winnings revenue for sports betting was down 43% YoY, while casino and games revenue slid 25% on Q4 2020.

Tjärnström suggested that Q4 2021 is up against a difficult comparative quarter given the sporting congestion in Q4 2020, including a delayed French Open in tennis and increased sporting fixtures being televised.

Speaking about not being one of the first 10 licensees in the Netherlands, Tjärnström was optimistic that the business would be operational in the country before the start of H2 2022.

Asked whether the licensing process could be quicker than expected, the CEO said “there are a number of milestones we need to tick off”, although he did add there would only be a couple of days between licensing and a go-live date.

“We are looking forward to successfully re-enter the market when the licensing process is concluded.”

North America was pinpointed as a future growth market, although Kindred confirmed that it is not looking for rapid growth.

Instead, Tjärnström said that 2022 and 2023 are being viewed as investment years that will hopefully turn North America into profit in 2024 and beyond. A conscious decision was made during Q4 to scale back on large bonus offers to US customers instead of looking at fine-tuning the offering.

“We are used to being smaller players in a crowded market,” Tjärnström told EGR. “We are treating North America like we did when we entered the already well-established UK market in 2012.

“We are not looking for fast expansion, instead focusing on building a strong position. Through acquisitions we have access to a strong portfolio, and we can now focus on improving the experience for customers. We are confident that will pay dividends down the line.”

Kindred also announced that it had extended it partnership with betting service provider Kambi until 2026 and would be using the intervening years to extend its in-house racing platform as it looks to fully control its sportsbook offering.

On Monday, Kindred announced that 4% of its Q4 2021 revenue had come from the proceeds of harmful gambling.

At the time of writing, Kindred’s share price had dropped 3.9% to SEK103.05 (£8.34), however it was down 8% at one point.