Kindred, a finance company, forecasts a 24.5% year-on-year increase in group revenue for the final quarter of the 2022 financial year, reaching £305.0m (€343.1m/$372.2m). However, this falls short of expectations.
In 2021, the revenue was negatively impacted by Kindred’s withdrawal from the Netherlands. Compared to Q4 of 2020, the revenue decreased by 16.4%.
The 2022 Fifa World Cup, which was moved to the winter due to hot weather in Qatar, disrupted the sporting calendar, resulting in approximately 25.0% fewer top-tier football league fixtures. The World Cup betting turnover was not enough to make up for the reduced league fixtures.
Other factors that affected Kindred’s performance in Q4 included a payout of £5.3m due to the Houston Astros winning the World Series, resulting in a negative revenue contribution of £4.4m. The performance in key markets like Belgium was negatively impacted by regulatory changes and increased sustainability focus.
Kindred expects underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) for Q4 to reach £39.0m, a 41.3% YoY increase. However, excluding North America, this would have reached £54.0m.
To improve profitability, Kindred plans to re-prioritize its investment projects, reduce short-term costs, decrease marketing spend in North America, optimize operating expenses, and take other actions.
Looking ahead to 2023, Kindred estimates its underlying EBITDA for the full year to be at least £200.0m, assuming long-term average sports betting margins and further actions to improve profitability.
The earnings announcement led to a drop in Kindred’s share price, falling to its lowest point since October 2022.
