Kindred Group Plc has described a strong start to its trading activities this year, with a focus on growth in key European markets and Australia.
The Stockholm-based online gambling company’s revenue remained at 2023 levels at £307 million ($414.45 million), according to its first-quarter 2024 trading report.
Trading during this period showed significant improvements in the Netherlands (+24%) and the UK (+20%), resulting in gross receipts (GWR) in Western Europe of £192 million ($259.2 million)
for the first quarter, helping the region return to 2022 levels.
This growth in Western Europe mitigated the ongoing decline in Kindred’s Scandinavian segment, which saw a fifth consecutive quarterly decline in GWR of £65 million ($87.75 million) (-15%).
Kindred described its results in Scandinavia as “disappointing across all markets in this segment”, given a 20% decline in gross gaming revenue (GWR) in its home market of Sweden and stagnation in Denmark.
Despite these challenges, Kindred highlighted a more stable platform for its revenue, with “84% of gross revenue from winnings in locally regulated markets for the first quarter of 2024,” the company’s highest to date.
Total sales in other regions fell 22% to £11 million ($14.85 million) due to Kindred’s tough trading conditions in Australia and the segment’s continued adjustment to the cessation of North American operations.
Nils Anden, the company’s CEO, called the first quarter results a positive start to “a year of transformation for Kindred,” which is now under offer from Groupe FDJ.
Anden commented: “Strong performance in locally regulated markets continued, with growth of 5 percent (excluding North America), led by the Netherlands, UK and Romania. We see mixed dynamics in the Nordic region, with Denmark showing stable performance. However, stricter regulations, stricter player protection initiatives and intense competition from the illicit market are having a negative impact on our operations in Sweden. We saw a 20% decline in gross winnings revenue in Sweden in local currency compared to the first quarter of last year, but an encouraging 5% increase in the number of active customers over the same period. Kindred is currently the fifth largest licensed operator in Sweden, a position we are far from happy with.”
In the first quarter, Kindred maintained gross operating profit at 172 million pounds ($232.2 million), while the Stockholm-based company’s cost of sales (including marketing and rates) remained stable at 135 million pounds ($182.25 million).
Notably, Kindred reduced its administrative costs to £76 million ($102.6 million) by cutting salary costs to £39 million ($52.65 million).
Operational efficiencies coupled with strong GWR results enabled Kindred to increase underlying EBITDA in the first quarter by 19% to £59 million ($79.65 million) (compared to £49 million ($66.15 million) in the first quarter of 2023 year) – the highest EBITDA level since the third quarter of 2021.
This EBITDA growth was achieved despite the winding down of Kindred’s North American business, a process that continued from the fourth quarter of 2023 through the first half of 2024.
Citing improved operating efficiency, Kindred also announced first-quarter net income of £31 million ($41.85 million), up 24% from 2023’s £25 million ($33.75 million), and net profit combined with free cash flow amounted to 24 million pounds sterling ($32.4 million).
Also, Nils Anden noted confidence in Kindred’s strategic goals for 2024: “We are off to a strong start in 2024, with core business operations performing well and operational initiatives moving forward as planned. Headcount reduction plans announced late last year are progressing as expected and the exit from North America is expected to be completed by the end of the second quarter of this year. Our growth plan, which we launched in the fourth quarter of last year with a focus on Europe and Australia, continues to keep pace with dedicated strategic growth projects in locally regulated markets. First-quarter results showed that Kindred did not change its 2.6 billion euro ($3.068 billion) offer to Groupe Française des Jeux. The proposal was accepted by the board of directors and presented to shareholders, “who have until November 19 to accept the proposal.”
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