Netherlands withdrawal and post-COVID normalisation batter Kindred in Q1

Kindred Group has released its financial results for the first quarter of 2022, showing a concerning quarter for the operator, with numbers down across the board.

Total revenue during the period was £246.7 million (€293 million), down from £352.6 million (€419 million) in Q1 2021, while gross winnings revenue decreased by 31 per cent to £242.4 million (€288 million).

The latter drop can be partially attributed to Kindred’s withdrawal from the Netherlands and, excluding the market gross winnings revenue declined by a much more constrained seven per cent.

The firm’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) also fell significantly, reaching £24.5 million (€29 million) after easily surmounting £100 million (€119 million) in the same quarter a year before.

Profit before tax dropped from £85.3 million (€101 million) to £7.6 million (€9 million), and profit after tax also fell accordingly, from £72.6 million (€85.63) to £6.4 million (€7.61 million).

Kindred’s free cash flow figure is particularly notable, amounting to negative £5.5 million (€6.5 million) after exceeding £90 million (€107 million) only a year earlier. The firm’s number of active customers fell to 1,377,317.

In a statement accompanying the figures, Kindred CEO Henrik Tjärnström put the results down to the impact of a post-COVID normalisation across markets and the firm’s decision to withdraw from the Dutch market in Q3 2021.

However, he also presented positives during the quarter: “Our diversified product and market mix provides us with a relative degree os stability across the group. We have seen this on several occasions, not least during the pandemic when sports virtually disappeared for a period.”

In Q1, excluding the Netherlands, he explained that Kindred’s diversified portfolio has seen a solid casino performance across markets during the first quarter of 2022 with a growth of one per cent from the same period in the year before.

“This has balanced out the slightly more volatile sportsbook, which started out strong but had a weaker second half of the quarter,” Mr Tjärnström.

He also addressed the impact of the withdrawal from the Dutch market, acknowledging the impact it had, but pointing out that while gross winnings revenue was down year-on-year, it was largely in line with the figure reported in the quarter preceding it.

Indeed, Mr Tjärnström seems to be remaining optimistic, sharing: “We maintain a very positive long-term view on the return from investments in our tech platform and strategic projects, such as our US expansion and the recently announced Kindred Sportsbook Platform.”

He concluded: “We have an exciting time ahead of us and I have great confidence in the direction we are taking through our long-term focus.”

Kindred also provided an update on its performance so far this quarter – up to and including 26th April 2022, where average daily gross winnings revenue was 37 per cent lower than the daily average for the full second quarter of 2021.

Excluding the Netherlands, the average daily gross winnings revenue for the group up to and including 26th April 2022 was 15 per cent lower than the daily average for the full second quarter of 2021.

Sports betting gross winning revenue has been negatively impacted by a weak sports betting margin of only 7.8 per cent after free bets, whereas the daily average gross winnings revenue for casino and other products has remained at the same level as the full first quarter of 2022.