Kindred recorded revenues of £ 485.4m (€ 570.8m / $ 579.1m) in the first half of 2022, down 32.2%. During this period, overall business declined year-on-year.
The result follows the exposure that Kindred’s board of directors considered selling the business under pressure from minority shareholders.
Kindred also obtained a license to do business in the Netherlands during the quarter, ending its nine-month absence in the market.
Kindred CEO Henrik Tjärnström said the combination of stricter affordable checks in the UK and seasonally lower periods of activity impacted Q2 results.
“The second quarter is a season of low activity due to the end of the sports league, and major football tournaments are held only every other year,” said Tjärnström.
“Last year, the UK market was affected by stricter affordable checks that the industry voluntarily imposed. These measures are expected to continue over the next few quarters to profitability in the short term. It will have an impact, but it will ensure a more sustainable customer base. “
This revenue consisted of B2B and B2C operations. B2C revenue accounted for £ 475.9m overall, down 33.5% from the same period in 2021, and B2B revenue accounted for the remaining £ 9.5m. There were no comparable B2B figures for the first half of 2021. After the end of the first half of 2021, Kindred acquired Relax Gaming for £ 275m.
Net cash from operating activities totaled £ 15.3m in the first half, down 92.3% year-on-year.
Cost of goods sold reached £ 220.1 million in the first half of the year, down £ 65 million from the first half of the year. The betting obligation was the highest cost at £ 119.2 million, while the combined marketing and revenue share was £ 22.2 million. Other cost of sales was £ 78.7m.
After considering the cost of goods sold, gross profit was £ 265.3m, down 38.4% year-on-year.
Administrative costs totaled £ 135.7m in the first half, up 19.3% from 2021 and marketing costs down 11.1% year-on-year to £ 107.1m.
Salary costs totaled £ 67.5m and other operating costs were £ 40.9m. The remaining costs consist of depreciation of property, plant and equipment and right-of-use assets, as well as depreciation of intangible assets.
Expenses left a profit of £ 22.5m, a significant 88% decrease from the second half of 2021.
Additional costs, including labor cost restructuring, German market closures and other gains and losses, amounted to £ 6.2 million. This brought total operating profit to £ 16.3 million, a significant decrease of 91.3%.
Pre-tax profit was £ 14.6 million after financial costs of £ 2.2 million and financial income of £ 500,000. After £ 2.4m tax, gross profit for the six months was down 92.3% to £ 12.2m.
Interest, taxes, depreciation and profit before amortization (EBITDA) totaled £ 46.3m in the first half, down 78.1% year-on-year.
The total number of active customers per year decreased by 600,000 to 1.3 million. Tjärnström explained that Kindred’s suspension of activities in the Netherlands was involved in this.
“We had 1.3 million active customers in the second quarter, which was influenced by our decision to temporarily suspend the acceptance of bets from Dutch residents,” said Tjärnström. increase.
However, he said he has been successful in the market since Kindred obtained a Dutch license.
“On June 8th, we finally received a license from the Dutch gambling office and the process of connecting all systems and processes to KSA began,” he said. “We opened our doors to Dutch players on July 4th and saw strong customer acquisition and activity during the period July 4th-19th.”
In the second quarter alone, revenue was £ 238.7 million. This was a 34.3% decrease from the second quarter of 2021. Cost of goods sold totaled £ 106.9m (down £ 35.9m annually) and gross profit fell 40.3% to £ 131.8m.
Marketing costs were the highest, totaling £ 50.1m. Salary and other costs totaled £ 34.5m and £ 21.9m, respectively. The remaining operating costs (£ 13.6 million) came from depreciation.
This resulted in a profit of £ 11.7m. Operating profit was £ 8m, well below the £ 103.1m recorded in the second quarter of 2021, as other expenses were £ 3.7m.
Treasury costs were £ 1.4 million, financial revenues were £ 400,000 and pre-tax profits totaled £ 7 million. Following £ 1.2m in income tax expenses, gross profit for the quarter was £ 5.8m, a staggering 93.3% year-on-year decrease.
Net cash from operating activities for the quarter was down 95.3% to £ 4.6 million.
EBITDA was £ 21.6m, down 81.1% year-on-year.
The total prize pool in Europe has been cut in half to £ 119.5 million. This is partly due to Kindred’s lack of activity in the Dutch market.
However, since entering the Dutch market, Kindred has recorded a total prize pool of £ 150,000, which is gradually increasing.
In Scandinavia, total prize revenue fell £ 1.2m to £ 74.2m.
Total prize revenues in Central Eastern and Southern Europe also fell to £ 26.2 million. This was a £ 2.1m decrease over the previous year.
Currently, Kindred’s average daily total prize income is £ 2.5 million, or £ 2.3 million excluding the Netherlands.
