Kindred Group reports 34% downturn in Q4 revenue amid first B2B contribution from Relax Gaming

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Kindred Group has reported a 34% year-on-year decrease in gross winnings revenue to £240.5m for Q4 2021.

Total reported revenue, including both B2C and B2B operations, came in at £244.9m following the firm’s acquisition of casino supplier Relax Gaming, which closed in October.

The decline was primarily driven by the operator’s decision to cease offering its services to consumers in the Dutch market while it waits for clearance to launch in the country. Kindred’s Dutch licence application was submitted at the end of November 2021.

This led to Kindred recording its highest ever share of gross winnings revenue from locally regulated markets at 77%. It is currently live in 17 regulated markets globally.

Q4 performance was also impacted by a lower-than-average sports betting margin (8.5% after free bets) as sports events normalised following a busy comparative period in the fourth quarter of 2020. Increased competition from land-based gambling following the easing of Covid-19 restrictions was also a factor, said the operator.

Underlying EBITDA decreased by 77% to £27.6m, down from £118.2m in the same period of last year. EBITDA came in at £94.9m amid a dip of 22% despite being impacted by a fair value gain of £71.3m in relation to the acquisition of Relax Gaming.

Kindred said it was working towards achieving annual synergies of £6.9m from that deal, as well as leveraging the supplier’s unique content to differentiate its B2C product suite.

Active customers declined by 18% in Q4 to 1,461,009.

The tough trading conditions look set to continue into Q1 of 2022, with Kindred reporting a 26% downturn in average daily revenue for the period to 6 February.

Looking at full-year 2021 performance, Kindred reported total revenue of £1.26bn amid an 11% increase in B2C gross winnings revenue. Underlying EBITDA grew by 15% to £332.1m.

“Looking ahead, we have another exciting year of sports with the Winter Olympics in progress, and the first ever Winter FIFA World Cup in November,” said CEO Henrik Tjärnström.

“I’m also very excited about the opportunities we see as a licensed operator in the Netherlands, and our North America expansion together with the Relax team.

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

Kindred Group’s share price declined by 5% in early trading on Nasdaq Stockholm to SEK102 per share, down from yesterday’s close of SEK107.15.

The Kindred board of directors has also decided to start exercising the buy-back mandate which was received at an EGM on 10 June 2021. The buy-back programme will run between 10 February and 12 May 2022 and amount to a total of up to SEK300m.

The operator has also announced its intention to build an in-house sportsbook, which has led to a volatile morning of trading for current sports betting partner Kambi.

About the author

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Jake Evans

Jake Evans is an NCTJ-accredited journalist and editor who has covered the online gaming and sports betting industry since 2017. He is the managing editor of iGaming NEXT and has previously worked in both content and data for EGR, Stats Perform and Football Radar.

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