Kindred Group recently posted the financials of its third-quarter alongside details for the first nine months of the year. The firm noted that Swedish re-regulation of the gaming industry significantly affected its results in the third quarter as market conditions became difficult.
Difficult times ahead
The firm noted that the current terms of the Swedish market don’t look too encouraging because of which attracting customs is challenging, and channelization is worsening. In September, the margin for the sportsbook also remained low because of which the gross winnings revenue also became weak. The EBITDA declined by £12.8 million from Sweden alone. The Netherlands also brought bad news as the iDeal payments solution was removed in the country.
However, France and the UK became the saving grace for the firm. Both markets reported strong growth during the third quarter, most of the revenue growth centered on licensed products. It increased by 33% overall or 13% after removing the Swedish market. Higher betting duties increased the margin pressure by 26% year-on-year, but the firm believes that it will help it make more sustainable growth in profits in the future. Note that locally licensed markets contributed 57% of the overall gross winnings revenue during the third quarter.
Making new strides in the US
The company also managed to break into the newly opened US market. It launched a sportsbook in the state of New Jersey. In Pennsylvania, it opened a Unibet Sportsbook. A host of online products is expected to go live next month, which will help increase the company revenue. The US market is still dependent on a patchwork of regulations, but more states have opened up to the idea of online gambling. Kindred Group has made early inroads to the market which could be helpful in leveraging the potential of US gamers in the years to come. For now, the company’s US activities have caused them an EBITDA loss of £1.8 million.
The company also released figures for the month of October (October 1 to October 23) which suggested a 9% increase in daily average gross winnings revenue year-on-year. Kindred Group CEO Henrik Tjärnström revealed that the number of active customers during the period was also 2% higher than last year. The company generated net cash of £43.4 million from operating activities in Q3. Its profit before tax was £21.4 million and profit after tax for the quarter was £18.1 million.