Kindred Group posts drop in profit amid ‘challenging’ Swedish market

Business News

Kindred Group’s underlying EBITDA for the third quarter of 2019 was GBP 37.2 (55.7) million, and GBP 98.3 (144.9) million for the period January to September 2019.

Profit after tax for the third quarter of 2019 amounted to GBP 18.1 (36.9) million, and GBP 45.7 (92.3) million for the period January to September 2019.

Similar to what we saw in the first half of 2019, re-regulation in Sweden resulted in difficult market conditions in the third quarter. The current terms and conditions make it challenging to attract customers into the system and can lead to worsening channelisation. This, in combination with a lower than usual sportsbook margin in September, resulted in significantly lower Gross winnings revenue and a GBP 12.8 million decline in EBITDA contribution from Sweden compared to the third quarter in 2018. We also continue to experience headwinds in the Netherlands due to the removal of the iDeal payment solution.”

“Outside of Sweden and the Netherlands, we continued to see strong growth in several other markets, including the UK and France. Locally licensed revenue growth was particularly strong with 33 per cent growth, or 13 per cent growth excluding Sweden, compared to the same period last year.

As expected, this resulted in margin pressure from higher betting duties which increased with 26 per cent compared to the same quarter last year. However, this focus will drive more sustainable future profit growth. Locally licensed markets were 57 per cent of overall Gross winnings revenue in the quarter.”

“During the quarter, we launched the Sportsbook product in New Jersey and the Unibet Sportsbook Lounge in Pennsylvania, with the online products to go live in November. This will be a great opportunity to deliver revenue growth and eventually profit in the longer term. Our investments in the USA in the third quarter incurred an EBITDA loss of GBP 1.8 million.”

“For the period 1 October to 23 October 2019, the daily average Gross winnings revenue in GBP was 9 per cent higher (10 per cent in constant currency) than the same period last year and active customers were 2 per cent higher than the equivalent period in 2018,” says Henrik Tjärnström, CEO of Kindred Group”