Kindred Group Q4 Gross Revenue Expected at All-Time High

Malta-based Kindred Group released a fourth quarter trading update today, stating the strong momentum from the previous business quarter continued throughout the final 3 months of the year, as total number of active customers increased by 11% and gross winning revenue reached an all-time high.

Flying into the Fourth Quarter

Coming out of a strong third quarter in which Kindred posted 24.2% rise in gross winning revenue to £280.7 million due to the resilience of its highly diversified business model, Kindred hit the ground running in the final 3 months of 2020.

As the official fourth quarter earnings report is yet to be released, Kindred noted in the trading update it expected its strongest quarter ever with gross winnings revenue reaching £365 million, an increase of 54.5% compared to the £236.2 million achieved for Q4 in 2019.

Gross winning revenue was also boosted by the stronger operator sports betting margin of 10%, significantly higher than the long-term industry one around 8.5%.

The strong growth Kindred achieved across its markets and products was due to the jump in the total number of the group’s active customers, a record 1.78 million, representing a double-digit increase compared to the same period of 3 months for the prior year.

Significant Growth in Underlying EBITDA

The growth in revenue in combination with substantial operational leverage and emphasis on higher levels of cost efficiency resulted into an annual earnings before interest, tax, depreciation and amortization (EBITDA) of approximately £115 million. Compared to fourth quarter 2019 EBITDA of £30.7 million, the figure expected for the three months ending December 31 represents 275% increase.

The rise in underlying EBITDA was achieved despite the 13% increase in total marketing spend reached in the fourth quarter after it began to gradually climb in the second. The company reduced the spend for the first half of the year due to the impact of the coronavirus outbreak on the sporting calendar around the world.

Along with rising in marketing spend, Kindred Group pursued improved marketing efficiencies, which together with the main contributing factor of strong growth, allowed the operator to achieve marketing spend for the quarter of 21% of gross winnings revenue, down from 23%.

The trading update Kindred issued to fulfill its obligation to make the information public pursuant to the EU Market Abuse Regulation. Regarding the 2020 year-end report, Kindred Group noted it would be released February 10, 2021 followed by a presentation and Q & A session through a webcast