The Nordic online gambling operator Kindred Group, issued an update on “the initial impact of COVID-19” on its operations on Thursday. Citing the “exceptional circumstances” and the need to make sure Kindred is “well capitalised for future investment opportunities, the company now recommends that shareholders be paid no 2019 dividend.
Kindred, Unibet’s parent company, will report its official Q1 financial results on April 24 but the firm said it expects sales to range from £ 247m-252 m (up from £ 224.4 m in Q1 2019). Kindred says sports margins were up 2.5 points to 12.2 percent before the mid-March sports chaos when the COVID-19 pandemic came to hold.
Unlike several other operators, Kindred said the decreased sportsbook turnover was “partially compensated by solid growth in revenues from other products.” However, the average daily sales from March 16-31 was around £ 2.2 m, 10 percent lower than the average daily revenue in 2019.
Kindred CEO Henrik Tjärnström confidently predicted that the effect of COVID-19 on the company’s operations would be ‘temporary, with sporting activities slowly resuming during or after the summer.’ Tjärnström said Kindred would change its marketing budget accordingly, while also minimising costs and halting other investments while riding this storm out.
Tjärnström also gave the corona-clouds a possible silver lining, in that “social and behavioural changes that are already happening will accelerate the migration from offline to online,” with Kindred ready to reap the benefits.
Kindred’s shares dropped 4.4% to SEK33.24 at the end of Thursday’s trade, a far cry from SEK58.50 at the beginning of the year but a far better sight than their 19 March low of SEK23.02 (which came after Sweden’s gambling regulator hit the company with a record SEK100 m fine for suspected bonus abuse).
Like several other traders, some senior management at Kindred used the stock price’s temporary downturn to raise their assets. Chairman Anders Ström recently added SEK6.9 m to 330k shares, increasing his Kindred stake to 3%.