Kindred Group reports 70% Q2 EBTIDA uptick on reduced marketing costs
Second quarter revenue rises 4% as core gaming verticals help to offset Covid-19 sports betting blackout
Kindred Group has reported a 4% increase in Q2 gross winnings revenue to £235m as EBITDA skyrocketed by 70% during the quarter.
The increase in EBITDA, rising to £51.6m from £30.4m in 2019, was achieved mostly through marketing cost savings as Covid-19 postponed the global sporting calendar for much of Q2.
“Over the coming quarters, we plan to increase our marketing towards normal levels in line with our long-term strategy, but we will manage this process in a cautious way,” said CEO Henrik Tjärnström.
Kindred Group CEO Henrik Tjärnström
The Stockholm-listed operator said a strong focus on product differentiation helped deliver the strong results as consumers switched to online gaming during lockdown in the absence of sport.
The group’s online casino, poker and bingo departments all experienced a surge in revenue as a result, with poker reporting all-time high monthly revenue for April.
Gaming revenue was up 43% to £167.6m, led by a 111% rise in poker to £9.7m, but with broad strength across all online gaming products, as seen across most operators and markets in Q2.
Sports betting revenue for the second quarter dropped by 61% to £67.5m.
Kindred’s US business also progressed well during Q2 despite the loss of offline revenue and the disruption to sport as revenue reached £6m to mark an uptick of 131% from Q1 2020.
“After less than a year of operations, the US already accounted for more than 2.5% of group revenue and this share is expected to accelerate in coming quarters, especially as further states go live,” said Tjärnström.
Kindred is primed to launch its Unibet brand in Indiana on 30 July to mark its third US state entry.
Regulus Partners analyst Paul Leyland said of the results: “Kindred has demonstrated the value of geographic and product diversity. During the acute period of Covid-19 disruption, it has helped enormously to have a high gaming mix.
“However, as mainstream sports and mass-market engagement returns, an increase in sports-led global and local competition is likely to re-exert pressure on Kindred’s waterfront .com regulated business model,” he added.
Kindred’s share price dropped by 4.4% in early trading.