Online Betting Operator Kindred Group has announced that the last quarter performance of 2019 was poor due to low US Betting margins. In a trading update the Stockholm listed company, Kindred Group said that the revenue is expected to be around £235mn in the last quarter of 2019. This is £15mn lesser than the same time period of 2018. The underlying income for the last quarter of 2019 would be something around £27mn-£32mn, a sharp decrease from £58.5mn of the same time period of 2018.
It is believed that the sharp decrease in the earnings is partially to blame the US expansion of the Kindred group. The company said that the US expansion has cost around £6mn earnings as a whole. The regulatory challenges present in Sweden and the Netherlands have also impacted the earnings, the company noted. However, in a positive note, the earnings of Q4 of 2019 in Sweden market are much better than the rest of the year. Hence, the possibility of stability in Sweden market can be expected in 2020.
The Sports Betting Turnover was increased by 3% for the company, however, the betting margin fell by sharp 1.3 points and is currently 8.1%. The biggest hit was in France. There was a turnover-based taxation in France till January 1. There was sharp increase in turnover in France for the Kindred Group and that impacted the overall betting margin. However, as France has now moved towards a stable revenue-based taxation, it would be beneficial for the company.
On a good note, the active customers of Kindred Group have increased by 2%. This came even after the shutting down the Brazil-facing site during this quarter. The br.unibet.com site has stopped taking the wagering from the Brazilian customers since November 8. The reason told has been ‘legal’ and the company is apparently working on the image makeover before the new regulations scheme comes into place sometime during this Spring.
However, Kindred Group believes that the earnings would stabilize in 2020 thanks to the cost limitations actions and initiative to improve the operations that were taken in 2019. There was no much impact on the business for Kindred Group after the announcement however. The share fell only by 1.5% after the announcement.
The company is to publish the Q4 Report on February 12.