Kindred Group Expects Third Quarter Record Revenue

Kindred Group released a Q3 trading update Friday, ahead of its third quarter interim report scheduled for November 6, saying revenue would be at an all-time high. The sports betting and iGaming operator based in Malta expects to generate for the three months ending September 30 in the region of £280 million.

Double-Digit Growth in Revenue

Gross winning revenue for Kindred Group jumps around 24% from £226 million for Q3 2019, setting a new record for the company, mainly due to the strong activity levels across all business verticals, which managed to offset a below the average sports betting margin after free bets of just over 8%.

Despite that the sports calendar continued with disruptions, the delayed completion of 2019-20 regular seasons in many sports and the short break before the start of the next 2020-21 seasons ensured a continuity in the stream of sporting events.

Underlying EBITDA above Market Consensus

Kindred Group said its third quarter underlying earnings before interest, tax, depreciation and amortization (EBITDA) is estimated to be between £73 million and £75 million, twice as much as the £37.2 million for Q3 the prior year, and the estimated range is well above the current market consensus.

Compared to the second quarter, revenue in Q3 is up 19%, as Kindred posted in July Q2 revenue of £235 million, boosted mainly by strong company performance from casino, poker and bingo. Underlying EBITDA was up 67% compared to the same three-month period in 2019, £51.7 million.

Prudence in Marketing Investments

The Q3 increase in EBITDA is driven mainly through the strong growth in revenue and the prudent approach to marketing investments by the group as its focus continues to be on keeping operational costs low due to the uncertainty stemming from the impact of the coronavirus.

Though marketing investment levels in July remained unusually low, these returned to slightly under the long-term average during the second half of the three-month period, setting marketing spend for the quarter to 21% of gross winnings revenue.

Jump in Active Customer Number

Kindred Group also noted the number of its active customers for the third quarter jumped 19% compared to the same period in 2019, amounting to 1.65 million.

The released third quarter trading update by Kindred set market bulls into action, pushing the share price for the Nasdaq Stockholm-traded gaming operator 10% in morning trading, reaching SEK74.92.