Online gaming operator Kindred Group has upped its marketing activity as highlighted in the group’s unaudited 2019 interim report, from the period ending June 31.
Detailing that it has confidence in its current long-term strategies, Kindred has supported its position undertaking a period of high marketing activity which has contributed to H1 2019 operating costs of £212m (2018: £182m).
Kindred emphasised its plans to continue adjusting to new regulated market demands across its operating territories.
“During the first quarter of 2019, the new licensing regulation in Sweden has resulted in significant short-term margin pressure driven by higher betting duties but also higher marketing as we are investing for the longer term,” explained Henrik Tjärnström, Chief Executive of Kindred Group.
Following on from a tough comparative period featuring World Cup 2018 trading, Kindred has noted year-to-date group gross winnings of £450 million up 5% on YTD 2018’s £426 million.
“Total marketing for the Group, as a percentage of Gross winnings revenue, came in at 29 per cent and was at its highest level since 2013 when compared to other second quarters in non-major football tournament years,” Tjärnström adds
“We also continue to invest heavily in technology and other operating expenditure in order to drive our future growth. Whilst this may reduce profitability in the short term, we are confident that, as we have previously proven, this will drive future growth in Gross winnings revenue and profits, particularly in locally licensed markets.
“Other significant items affecting the quarter were the planned investments in the USA, both in marketing and operating expenses, that contributed GBP 1.6 million of negative EBITDA in the quarter.”
Regulated market adjustments and higher operating costs, would result in Kindred posting an H1 2019 period EBITDA of £61 million, down 31% on YTD 2018’s £89 million.
Closing H1 2019 trading, Kindred governance declares a group profits of £27.5 million down 50% on YTD 2018’s £55 million.