Kindred boosted by World Cup marketing investments as Q3 revenue climbs

Kindred boosted by World Cup marketing investments as Q3 revenue climbs

Friday, October 26, 2018 Posted by News Team
Operator also saw revenue for the first 9 months of 2018 climb 28%

Kindred Group has reported a 19% rise in revenue for the three months ended September 30th, with the operator crediting its marketing investments made around the FIFA World Cup as key to its success.

Revenue rose to £230.7m, with sports betting accounting for £111.1m of the total. Casino contributed a further £109.9m, with poker accounting for £4.4m, and £5.3m coming from other products.

The majority of revenue (74%) was generated via mobile devices, up 24% year-on-year.

The number of active customers during the quarter grew to 1.53m, though this represented a slight decline on the 1.55m from Q2, when the majority of World Cup matches took place. 

Cost of sales rose to £89.1m, of which £38.2m was betting duties and marketing revenue share amounted to £12.4m, while other costs grew to £38.5m. 

This resulted in a gross profit of £141.6m, up 16.9% from Q3 2017. After marketing costs of £45m and administrative expenses of £47.6m were taken out, the company posted an operating profit of £43.6m. 

Once tax and finance-related costs were removed, Kindred Group posted a profit after tax of £36.9m, up 23.4%. 

The third quarter saw the company make a number of strategic advances, including striking a betting partnership with French Ligue 1 champions Paris Saint-Germain. The operator has also applied for a licence in its native Sweden, and has partnered Hard Rock Atlantic City for the launch of a sports betting offering in New Jersey.

“During the quarter, we reaped the benefits of the marketing investments made in the lead up to the World Cup, with active customers up 25 per cent compared to the same period last year,” Kindred Group chief executive Henrik Tjärnström said. “The sports betting margin was 8.5 per cent after free bets.

“Gross winnings revenue increased by 22 per cent in constant currencies which means that we are continuing to gain market share,” he explained.

For the nine months of 2018 to September 30th, revenue was up 28.1% to £657.5m, with profit after tax climbing 38.6% to £92.3m.

Tjärnström revealed that Q4 had got off to a mixed start, with sports betting margin after free bets around 25% higher than the long-term average of 7%.

“For the fourth quarter of 2017 it was 50 per cent above the long-term average,” he said. “Due to this lower margin, the daily average gross winnings revenue in GBP in the period up to 24 October 2018 was 5 per cent lower (3 per cent in constant currency) than for the full fourth quarter last year.”


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