A slow start to the re-regulated launch of Sweden’s online market has dragged down the profits at Unibet operator, Kindred – despite an otherwise strong first quarter.
Revenue for the three months to 31 March hit £224.4m – up eight percent year-on-year – driven mainly by online sports and casino products. Mobile made up 77 percent of the total.
Betting and casino rose 12.5 percent and 3.4 percent respectively, both to £106m. Poker shot up 24 percent to £5.7m.
However, ebitda amounted to just £30.6m, down 35 percent on the same period last year – as the company disclosed an added £19m in expenses from its launch in the new Swedish market.
“During the quarter we have had strong levels of activity across all markets and all-time highs in active customers and sports betting turnover,” Kindred chief executive Henrik Tjarnstrom explained.
“This is the result of our continued investment in marketing, where focus has been in relation to responsible gambling in Sweden and football sponsorships in the UK.”
As anticipated “for several years” now, Tjarnstrom also stated that the re-regulation of the Swedish market “resulted in significant short term margin pressure – particularly in the first quarter.”
Marketing costs were up 29 percent to £54m in Q1, partly down to significant expenditures on bonuses, and brand exposure in Sweden. Admin costs grew £50m; while operating profit also fell to £18m – a near 50 percent fall from last year.
The group did see strong 14 percent lift in registered customers, to 25.6 million, by the end of March.
For the period 1 April to 21 April 2019, the CEO expects the daily average gross winnings revenue in GBP was 10 percent higher (12 percent in constant currency) than for the same period last year.