SBC News Voice of the Sports Betting Industry
Kindred Group Plc has detailed a ‘solid start’ to the year’s trading, maintaining focus on growth in core European markets and Australia.
Publishing its Q1 2024 trading update, the Stockholm-based online gambling group’s Q1 revenues stand equal with 2023 comparatives of £307m.
Period trading reflected marked improvements in the Netherlands (+24%) and the UK (+20%), as Kindred’s Western Europe segment generated Q1 gross win revenues (GWR) of £192m – a GWR contribution that sees Western Europe return to 2022 comparatives.
Recovery in Western Europe offset the continued decline of Kindred’s Nordic segment, which registered a fifth consecutive drop in quarterly GWR results to £65m (15%).
Kindred branded its Nordic performance as “disappointing across markets within the segment”, as the group detailed a 20% GWR decrease in its home market of Sweden and stagnant results in Denmark.
Despite continued challenges, Kindred underlines a more stable platform for its income performance as “84% Gross winnings revenue from locally regulated markets for Q1 2024”, the group’s highest exposure to date.
GWR from other regions decreased by 22% to £11m, as Kindred tough trading in Australia and the segment’s continued adjustment to the termination of its North American business.
Group CEO, Nils Andén, branded Q1 performance as a positive start to a “transformative year for Kindred”, currently under offer from Groupe FDJ.
Andén noted: “The stable performance across locally regulated markets continues, with growth of 5 per cent (excluding North America) primarily driven by the Netherlands, the UK, and Romania.”
“We have seen a diverse performance across the Nordic region, with Denmark displaying stable operations. However, stricter regulations, stronger duty of care initiatives, and tough competition from the unlicensed market are having an adverse impact on our Swedish operations”.
“We saw a 20 per cent decrease in Gross winnings revenue in Sweden in local currency compared to the first quarter last year, but an encouraging 5 per cent increase in active customers during the same period. Kindred is currently the fifth-largest licensed operator in Sweden, a position we are far from happy with.”
Q1 results saw Kindred maintain gross operating profits at £172m, as the Stockholm firm’s cost of sales (marketing, betting duties, and other) remained static at £135m.
Of significance, period trading saw Kindred reduce its administrative expenses to £76m, primarily reflecting a reduction in group salary costs to £39m.
Operating efficiencies combined with stable GWR results saw Kindred declare a 19% increase in Q1 underlying EBITDA to £59m (Q1 2023: £49m) – its highest EBITDA results since Q3 2021.
EBITDA growth was achieved despite the impact of Kindred terminating its North American business, a process undertaken from Q4 2023 to the first half of 2024 trading.
Citing improved operating efficiencies, Kindred declares Q1 profits of £31m, up 24% on 2023 comparatives of £25m, earnings combined with a free cash flow of £24m.
CEO Nils Andén noted confidence in Kindred’s strategic objectives for 2024: “We have had a solid start to 2024 with the underlying business operations performing well and operational initiatives moving forward according to plan.”
“The headcount reduction plans announced at the end of last year are progressing as intended, and the North America exit is set to conclude towards the end of the second quarter this year. Our growth plan that we launched during the fourth quarter last year, focusing on Europe and Australia, continues at pace with dedicated strategic growth projects across locally regulated markets.”
Q1 results saw Kindred detail no change to the €2.6bn offer tabled by Groupe Française des Jeux, an offer accepted by the board and presented to shareholders, “who have until 19 November to accept the offer.”
