Kindred Group’s gross winnings revenue amounted to GBP 224.4m for the first quarter of the year, an increase of 8%, according to an earnings report the online gaming company released. Underlying EBITDA for the period was GBP 30.6m.
Profit before tax amounted to GBP 17.7m, while profit after tax came to GBP 15.1m. Earnings per share were GBP 0.067.
Gross winnings revenue from the Swedish market for the first quarter of 2019 amounted to SEK 207.4m after deduction of bonuses of SEK 137.9m.
The number of active customers during the first quarter was 1,631,636. “All-time high in active customers but, as expected, profits for the quarter significantly impacted by the new local licence in Sweden,” said Henrik Tjärnström, CEO of Kindred Group.
The CEO praised “strong levels of activity” across all markets and “all-time highs” for active customers and sports betting turnover. According to the CEO, investment in marketing activities focusing on responsible gambling in Sweden and football sponsorships in the United Kingdom were the main drivers of the results.
Swedish market reregulation leads to short-term margin pressure
“As anticipated for several years, the reregulation of the Swedish market resulted in significant short-term margin pressure, particularly in the first quarter. The single biggest impact came from all legacy and new Swedish customers being awarded one additional bonus under the terms of the new licensing system,” according to the CEO.
“The significant uptake on customer bonuses, especially in January and February, resulted in bonus expenditure increasing with GBP 6.6m for the first quarter compared with the same period last year. Bonus costs stabilised later in the quarter and by March, they were lower than last year with full-year costs expected to be lower than for 2018,” Mr Tjärnström added.
Gross winnings revenue, as well as EBITDA, was significantly affected by the Swedish betting duties paid of GBP 5.2m but also marketing investments increasing with GBP 3.8m, the press statement by the group says. “The total effect on Group EBITDA from the Swedish market opening in the first quarter was a reduction of GBP 18.9 million compared to the first quarter last year,” the CEO said.
Gross winnings revenue from mobile grew by 17% in the first quarter of the year as compared to the same period a year earlier, and amounted to 77% of the group’s total gross winnings revenue, while some 57% of the group’s gross winnings revenue, came from locally-regulated markets.
“For the period 1 April to 21 April 2019, the daily average Gross winnings revenue in GBP was 10 per cent higher (12 per cent in constant currency) than for the same period last year,” Mr Tjärnström added.