Kindred clears Q4 turbulence to deliver record profits

Kindred Group Plc has navigated the significant headwinds of a tough fourth quarter trading period to deliver investors what it cited as ‘its strongest year to date’. 

Publishing its unaudited 2021 results, the firm has registered full-year corporate revenues of £1.259bn, up 11% on corresponding FY2020 results of £1.130bn.

2021 headline performance was maintained despite significant events impacting Kindred’s year-end trading during a period that saw the group cease all Dutch online gambling services as it waits to be granted a KOA Regime licence.

Accounting for Dutch restrictions and tough trading comparatives, Kindred registered declines on all Q4 metrics as period revenues slumped to £244m (Q42020: £364m).

As a result of its revenue slump and a ‘below average sports betting margin’, further Q4 headline results saw the group’s underlying EBITDA decrease by 77% to £27.6m (Q42020: £118m).

Group CEO Henrik Tjärnström commented on Q4 trading: “Exceptionally strong numbers in 2020 led to tough comparatives for the quarter but despite the low sports betting margin at the beginning of the quarter, and the fact that we ceased services to Dutch residents, our fourth quarter delivered solid revenues of £244.9 million, underlying EBITDA of £27.6 million”

“The final quarter of the year was impacted by normalisation of the sporting calendar following an exceptional comparative quarter in 2020 and increased competition following the lifting of COVID-19 restrictions – factors anticipated in our Q3 report.”

Anticipated Q4 impacts did not derail Kindred’s full-year financial results, as the group’s underlying EBITDA grew by 15% to £332m (FY2020: £288m).

Despite the Dutch opt-out significantly impacting the results of its Western European unit performance (-48% in Q4 revenues) – Kindred continues to grow its active customer base in the UK (+8%) and Belgium (+9%).

Elsewhere, the group maintained its comparative performance within Scandinavian markets, achieving growth for its online casino vertical, despite Swedish depositing limits being applied as a temporary COVID-19 restriction.

Closing its unaudited results, Kindred anticipates delivering profits after tax of £295m, up 78% on corresponding FY2020 results of £165m.

Moving forward the company underlined that it would be strengthened by completing its acquisition of Relax Gaming, helping build out and diversify its B2B services. 

The firm also remains confident that it will be granted a Dutch KOA licence by the first-half of 2022 trading – a factor that will help it achieve its highest percentage of revenues generated from regulated markets.  

“We have now truly shifted gear on our transformation into a locally regulated operator with clear ambitions for the future,” Tjärnström noted.

“With the North American business in its infancy, our more mature markets in Europe and Australia have performed well during the fourth quarter. Belgium, Denmark, Finland and the UK have all delivered encouraging performance over the year.”

“If we exclude the US, our markets in Europe and Australia grew revenue for the full year by 12% compared to 2020 and delivered growth in underlying EBITDA of 19%. This indicates the strength in our core market performance.”

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