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Kindred Group reports record gross revenue in Q3

| By Richard Mulligan
Kindred Group saw a double-digit rise in its share price rise today (9 October) after it announced record gross revenue and significant marketing savings in for the third quarter of 2020.

The Stockholm-listed group, which owns Unibet, said in a trading update that gross winnings revenue was up 24% year-on-year to a record £280m.

It added that sports betting margin after free bets was just over 8% – down year-on-year – but this was offset by continued strong activity levels across the business.

“The sports calendar has of course continued to be disrupted, but the delay in completion of many 2019-20 seasons and short break before the start of 2020-21 seasons has meant a continuous stream of events,” the group said in the update, issued in advance of its Q3 interim report on 6 November.

Kindred said underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the three months to 30 September is estimated to be in the range £73-75m. This is higher than its current consensus and around double the EBITDA of £37.2m from Q3 2019.

“The strong revenue growth, combined with Kindred’s prudent management of marketing investments due to Covid-19 and continued focus on other operating costs, are the main factors driving the increase in EBITDA,” said Kindred.

“The level of marketing investment remained unusually low in July, as a result of Covid-19, but has returned towards levels slightly below the long-term average in the second half of the third quarter.”

Marketing spend came in at approximately 21% of gross revenue in the quarter.

Active customers for the quarter amounted to 1.65m, which was an increase of 19% compared to the same quarter last year.

The trading update led to Kindred’s share price rising 10.11% to SEK74.92 by lunchtime on Friday.

Kindred-owned Unibet launched its first online sportsbook in the US in September 2019, going live in New Jersey through its partnership with the Hard Rock Hotel & Casino Atlantic City.

In July, Kindred reported that revenue for Q2 totalled £235.1m, up 4.0% on the previous year thanks to a strong performance from casino, poker and bingo. Profit after tax rocketed 114.4% to £26.8m, while underlying EBITDA was also up 67.3% to £51.7m in the quarter.

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