Kindred Q4 revenues soar 56% after record sportsbook margins

Kindred today announced a 56% year-on-year increase in Q4 2017 gross winnings revenue after a record sportsbook margin helped the firm to a 77% rise in sports betting revenue.

The group recorded revenue of £238m in the three-month period, up from £158.2m in Q4 2016, as revenues from its online betting business soared from £68.5m to £121.1m.

The rise in sports betting revenue was largely due to what Kindred CEO Henrik Tjärnström described as an “exceptional sportsbook margin” of 11.7% before free bets and 10.5% after free bets.

Meanwhile, Kindred’s casino & games business also reported solid growth in the quarter, increasing 42% year-on-year to £106.3m, while the operator’s poker arm recorded a 31% rise to £4.6m.

On a geographical basis, the Stockholm-listed firm reported particularly strong growth in Western Europe (86%), in addition to a 23% increase in the Nordics and 45% across Central, Eastern and Southern Europe.

Underlying EBITDA for the fourth quarter of 2017 was £74.5m.

“Kindred has undoubtedly benefited from strong sportsbook margins in Q4, like substantially all European betting operators,” gambling consultancy firm Regulus Partners said this morning.

“However, the strength of its gaming growth points to underlying momentum in all key geographies, notwithstanding a lack of progress in mobile mix (70%).

“That this was achieved on 22% marketing costs as a proportion of revenue points to continued strong gaming product, with the betting offer appearing to perform better in less competitive markets.”

The contribution from the 32Red business, which Kindred acquired last year, stood at £18.8m during the quarter, and Kindred also announced plans to move all 32Red employees to its Gibraltar office next month.

Kindred’s full-year group revenues were £751.4m, compared to £544.1m in 2016, while underlying EBITDA increased from £123.7m to £185m