Kindreds earnings for the initial six months of 2022 were £485.4 million (€570.8 million/$579.1 million), a 32.2% reduction compared to the same period in the previous year, with a downturn across all business sectors during the same time frame.
Kindreds profits have fallen sharply after a challenging second quarter.
This follows reports that Kindreds governing body is investigating a potential sale of the company, following pressure from minority investors.
Kindred has also obtained a permit to operate in the Netherlands, ending a nine-month absence from the market.
Kindreds chief executive, Henrik Tjärnström, stated that stricter affordability checks in the UK and a seasonal dip in activity affected the second quarter results.
“The second quarter is a time of seasonal slowdown in activity as sports leagues conclude and major football competitions only occur every other year,” said Tjärnström.
“The UK market has been influenced by the industry’s self-imposed stricter affordability checks over the past year. These measures are anticipated to continue in the upcoming quarters. While this will affect income in the short term, it will ensure a more stable customer base.”
The revenue encompasses both business-to-business and business-to-consumer operations. Business-to-consumer revenue accounted for £475.9 million, down 33.5% from the same period in 2021, while business-to-business revenue accounted for the remaining £9.5 million. There is no comparable business-to-business data for the first half of 2021.
In the final day of the initial six months of 2021, Kindred bought Relax Gaming for a sum of £275 million.
The net cash generated from operational activities in the initial six months was £15.3 million, a decrease of 92.3% compared to the same period last year.
The cost of goods sold in the first half reached £220.1 million, a reduction of £65 million compared to the initial six months of the previous year. The largest expenditure was on betting taxes, amounting to £119.2 million, while marketing and revenue sharing totaled £22.2 million. Other costs associated with sales amounted to £78.7 million.
After taking into account the cost of goods sold, the gross profit was £265.3 million, a decrease of 38.4% compared to the same period last year.
Administrative expenses in the first half totaled £135.7 million, an increase of 19.3% compared to 2021, with marketing costs at £107.1 million, down 11.1% year-on-year.
Total salary expenses amounted to £67.5 million, while other operating expenses were £40.9 million. The remaining expenses included depreciation of property, plant, and equipment and intangible assets.
These expenses reduced profit to £22.5 million, a substantial decrease of 88% compared to the first half of 2021.
Additional costs, including restructuring, the closure of the German market, and other gains and losses, totaled £6.2 million. This brought the total operating profit to £16.3 million, another substantial decrease of 91.3%.
After financial costs of £2.2 million and financial income of £0.5 million, profit before tax was £14.6 million. After paying £2.4 million in taxes, the total profit for the six months was £12.2 million, down 92.3%.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first half totaled £46.3 million, down 78.1% year-on-year.
The active clientele of Kindred Group dwindled to 1.3 million for the entire year, a reduction of 600,000. This was partially attributed to Kindred’s choice to cease operations in the Netherlands.
The count of active users in the second quarter was 1.3 million, also affected by the Netherlands decision. However, Kindred has witnessed success in the Dutch marketplace since acquiring a permit.
Kindred obtained a permit from the Dutch Gaming Authority on June 8th and opened to Dutch players on July 4th. They observed robust customer acceptance and engagement in the initial weeks.
Income for the second quarter was £238.7 million, a 34.3% decline from the same period last year. The cost of sales was £106.9 million, yielding a gross profit of £131.8 million.
Marketing expenditures were the highest at £50.1 million. Salary expenses and other expenditures were £34.5 million and £21.9 million, respectively. Depreciation and amortization costs amounted to £13.6 million.
This resulted in a gain of £11.7 million. After other expenditures, operating profit was £8 million, considerably lower than the £103.1 million in the second quarter of 2021.
Financial costs were £1.4 million, and financial revenue was £0.4 million, leading to a pre-tax gain of £7 million. After an income tax expense, the final profit was…
The second-quarter earnings of Kindred Group were a cause for concern, with a profit of just £5.8 million, a significant decrease of 93.3% compared to the same period last year.
Cash flow generated from operations was also considerably lower at £4.6 million, representing a 95.3% year-on-year decline.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at £21.6 million, down by 81.1% compared to the previous year.
Total winnings in the European market were cut in half to £119.5 million, a consequence of the company’s suspension of operations in the Netherlands.
However, since its re-entry into the Dutch market, Kindred has generated £150,000 in total winnings, a figure that the company claims is steadily growing.
In the Nordic region, total winnings reached £74.2 million, a decrease of £1.2 million compared to the previous year.
Total winnings in Central and Eastern Europe and Southern Europe also experienced a decline, reaching £26.2 million, down by £2.1 million year-on-year.
Currently, Kindred’s average daily total winnings stand at £2.5 million, or £2.3 million excluding the Netherlands.
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