Kindred maintains sustainable pledge amid ‘inadequate’ regulatory action

Kindred Group has disputed a Swedish Gambling Authority fine and warning issued last month to its Spooniker subsidiary, labelling its reasoning “inadequate,” as the group again vows to heighten sustainability safeguards.

Contained within its January-March 2020 interim report, Kindred stresses an appeal has been lodged in Sweden following an alleged breach of bonus rules. 

Asserting that it vigorously disagrees with the regulator’s decision, the group said on the matter: “Kindred maintains that the Swedish Gambling Act is vague in areas related to commercial activities, and that this creates ambiguity. Kindred has now appealed the regulator’s decision to the Swedish Administrative Court, and it will pursue the appeal tirelessly in order to challenge the decision as well as to bring certainty to the interpretation and application of the Swedish Gambling Act.”

Furthermore, the group has also set a bar for sustainability work, including having long-term ambitions across five key priority areas: 

  • Zero per cent gross winnings revenue derived from harmful gambling by 2023.
  • Always behave with integrity and fairness to gain the trust of customers, regulators and society as a whole.
  • Ensure that its operations always continue to meet the highest professional, compliance and ethical standards.
  • Become one of the world’s highest-ranked companies within employee engagement.
  • Equip the communities in which it operates with the knowledge and resources to build a better future

The five point pledge comes as Kindred reports an 11 per cent rise in gross winning revenue to £249.7m (2019: £224.4m), with a previously communicated drop in daily average gross winnings revenue from mid-March continuing into April.

Underlying EBITDA for 2020’s first quarter increased 36.6 per cent from £31.1m to £42.5m as profit after tax came in at £1m (2019: £15.1m), with the group commenting that items affecting comparability of £24m for Q1 included specific charges of £20.7m.

This includes £1.9m in personnel restructuring costs, £8m in disputed regulatory sanction, £9.9m of EBITDA impact and £10.8m in accelerated amortisation of acquired intangible assets.

Henrik Tjärnström, CEO of Kindred Group, explained: “In line with the activity for the second half of March mentioned in our trading update on 2 April 2020, daily revenues for the period from 1 to 19 April have continued to be around £2.2m. Revenues and margins are less volatile in current circumstances because of the reduced proportion of revenues coming from sports betting. The largest decline in daily revenues has been in France, which is expected due to its high reliance on sports, but it remains a low margin territory for Kindred because of the high betting taxes.

“We have seen positive growth in other products and we have acted quickly to adapt our marketing and other investments and to maintain an even tighter control over all operating costs. If we see any further deterioration in the business, we will not hesitate to make further adjustments.”

“As a pure digital company, we are well prepared and ready to take the opportunities that will come when markets start to normalise. I am very confident that Kindred’s well-diversified and financially sound business model will enable us to emerge stronger over the coming quarters.”