The record revenue reported by online gambling operator Kindred Group during the fourth quarter of last year was driven by increased sports betting margins, aggressive cost cutting and a strategy to strengthen customer engagement.
The Stockholm-listed company announced on tuesday that during the last quarter of 2020 it had record revenue of 365 million pounds. Which represents 55% more compared to the revenue of the same period of 2019 and 30% better than that reported by Kindred in the previous quarter.
Although official figures will be released on february 10, preliminary results will cause a 5% rise in the company’s share price at the close of the day.
Kindred explains that these positive figures are the result of several joint actions undertaken by the company. The company managed to increase the number of active customers to 1.78 in the fourth quarter of 2020 (an increase of 11% year-on-year).
The generous 10% margin left by sports was another determining factor, representing 1.5 points above the long-term average.
The operator estimates fourth quarter 2020 earnings at £ 115 million, nearly quadruple the £ 30.7 million generated in the fourth quarter of 2019. Compared to 2019, they are just £ 15 million less than the company earned that year.
The company simply said that the excellent result was “significantly higher than the current consensus.” Perhaps to avoid an adverse reaction from the media and regulatory bodies.
These fabulous earnings were attributed by the company to a “continued focus on operational efficiency and costs.” The company cut staff costs during the most critical period of the pandemic and substantially reduced investment in marketing, following the closure of major sports.
When sports reopened, the operator’s marketing efforts increased, but from an improved and more efficient lens. As the company’s revenue increased, marketing spending remained at approximately 21% of gross revenue during the fourth quarter.
To consolidate its presence in the markets and expand in the United States, Kindred reinvested most of its profits. The company bought Rank Group’s latest Belgian casino for £ 25 million last october to secure the Unibet brand’s right to stay on the market.
Unibet also entered into a marketing alliance that same month with the Philadelphia Eagles. The goal was to strengthen the operations of its Pennsylvania licensed online casino.
This year Kindred faces the challenge of the regulatory markets where it has a presence. One of them is the German market.
The company’s affiliate marketing partners in that country will have to remove all promotions and advertisements from Unibet’s slot machines and poker products “to comply with new German regulatory requirements.”