Kindred Group Announces a 30% Q1 Revenue Drop Amid Netherlands Exit

Nasdaq Stockholm-listed Kindred Group has revealed a trading update before its complete Q1 2022 report that will be released on April 28. The group with licenses and locations spread all over North America, Europe, and Australia has announced total revenue of £247 million ($322 million) for the first quarter of the current year. The numbers indicate a 30% drop compared to Q1 2021’s total revenue.

Kindred Explains the Drop Through the Temporary Exit From the Dutch Market

The group that employs more than 2000 people and reunites nine of the most popular brands on the European online gambling scene is still missing a license that allows it to operate on the iGaming market in the Netherlands. This has forced it to temporarily shut down its operation in the country, which is one of the primary explanations for the group’s total revenue decrease of approximately £105 million ($130 million), from £352.6 million ($459 million) in Q1 2021 to £247 million ($322 million) in Q1 2022.

The Dutch iGaming market officially opened its gates to the public on October 1, 2021. Kindred sent its licensing application to the gambling regulator Kansspelautoriteit at the end of November but has yet to receive a positive response. However, the company’s chief executive officer Henrik Tjärnström said the licensing procedure was going according to plan in Kindred’s full-year report for 2021.

Getting its much-anticipated license would help Kindred limit its losses and gradually get back on its path to further growth and development. With a big question mark hanging above its head regarding if and when it will obtain its license, Kindred is confronted with a secondary problem. A Dutch license will not pave its way to instant recovery, as the company will no longer be able to use its historical databases of Dutch users.

This means the group will need to start fresh, from scratch, and take its time to rebuild its reputation among Dutch players. This would considerably delay its growth in the market and postpone its expansion plans in Europe. Plus, the new 20% tax on gaming revenue Kindred will need to pay for activating Ontario’s freshly launched iGaming and online sports betting market is likely to cause additional problems.

Q1 Was Not Entirely Bad

Kindred’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also suffered a drop during Q1, from £106 million ($138 million) in 2021 to £25 million ($32.5 million) in 2022. However, compared to Q1 2021’s figure of £27.6 million ($35.9 million), EBITDA remained approximately the same. Plus, in spite of the 30% drop in year-over-year total revenue for Q1, the group recorded a small £2 million ($2.6 million) quarter-over-quarter increase compared to Q4 2021.

The group described its performance in the markets it is currently active in satisfying, calling the Q1 performance “solid” despite the “very tough comparative period”. Kindred also highlighted the importance of having a diversified footprint on the market and announced that it will reveal more details in the upcoming Q1 2022 report at the end of the month.

At the end of February, the group announced its interest in taking end-to-end control over its sportsbook platform, while expanding its recruitment and trying to bolster its trading skills.