Kindred Group has submitted a request to delist its Swedish Depository Receipts (SDRs) from the Nasdaq Stockholm exchange following the completion of its acquisition by Groupe Française des Jeux (FDJ) and the initiation of a buyback procedure for the remaining shares.
At the same time, operator Unibet and 32Red reported their financial results for the third quarter of 2024, showing growth in total revenue, net gaming revenue (B2C), and the number of active customers compared to the same period last year.
In the report, CEO Nils Andén stated that after the acquisition deal with FDJ is completed, the group will exit the “.com” markets “for which there is currently no clear path to local regulation.” This could complicate the achievement of the target baseline EBITDA of £250 million ($325 million).
Andén also expressed gratitude to investors for their support and highlighted the contributions of the global Kindred team as they embark on a new phase of development alongside FDJ.
Buyback Procedure and Delisting
This week, FDJ announced that its stake in Kindred has increased to 98.6% after an additional 14,734,917 Kindred Depository Receipts (SDRs) were offered, representing 6.83% of the share capital. This increase occurred on top of the existing 91.77% following the completion of the first stage of the public offering on October 11.
Given that FDJ owns more than 90% of Kindred’s shares, the company initiated a buyback procedure, exercising its right to require Kindred shareholders who have not tendered their shares under the offer to transfer all their shares to FDJ.
Kindred stated in its announcement: “Each shareholder subject to the buyback is hereby notified that, in connection with FDJ’s exercise of its buyback right, each such shareholder must transfer all their shares in Kindred to FDJ in accordance with the provisions of the company’s articles of association and the buyback notice to shareholders.”
As a result, Kindred’s board of directors has submitted an application for the delisting of the company’s Depository Receipts (SDRs) from Nasdaq Stockholm, and the date of the last trading will be announced as soon as Nasdaq Stockholm confirms it for the company.
Key Markets Drive Revenue Growth in Q3
As previously mentioned, Kindred published its financial results for the Q3 of 2024, reporting that total revenue for the period increased by 4% year-on-year to £294.5 million ($362.4 million) (Q3 2023: £283.9 million, $348.2 million).
Nils Andén noted that the growth is attributed to positive results from the company’s key markets. Revenue in the B2C segment also rose by 3% compared to the previous year, reaching £283.1 million ($348.0 million), up from £274.7 million ($337.6 million) in 2023.
The number of active customers in the third quarter also grew by 9% year-on-year, totaling 1,701,100 (2023: 1,563,762).
“The positive trend observed in the first half of the year continued as we entered the second half of 2024, with key markets performing well,” said the CEO.
“Total revenue for the third quarter was £294.5 million ($359.29 million), which is a 4% increase compared to the same period last year (5% in constant currency). Excluding North America, revenue increased by 6% during the same period.”
Underlying EBITDA target
Kindred’s core EBITDA increased by 49% year-on-year, reaching £63.4 million ($77.35 million) (2023: £42.6 million, $52.97 million).
However, Nils Andén noted that Kindred’s exit from “.com” markets, where there is no clear pathway for local regulation, will impact the company’s ability to meet its stated target for core EBITDA of £250 million ($305 million).
Andén commented, “I am very pleased that our core EBITDA reached £63.4 million ($77.35 million), which is 49% higher than last year. This corresponds to a core EBITDA margin of 22% and highlights the scalability of our business model.
“The outstanding work of the Kindred team has resulted in a year-to-date core EBITDA of £196.3 million ($239.49 million). I am optimistic that we are on track to achieve our stated goal of £250 million ($305 million) for the full year 2024.
“However, following the anticipated completion of the acquisition of Kindred by La Française des Jeux (FDJ), Kindred will exit the ‘.com’ markets (including Norway) that do not have a clear prospect for local regulation in the near future. This move will negatively impact our ability to reach the stated target for core EBITDA.”
Kindred’s profit before tax decreased to £12.5 million ($15.6 million) (2023: £15.1 million, $18.8 million) due to “significant strategic review costs of £30.9 million ($38.6 million) (2023: £0.6 million, $0.75 million) associated with the FDJ deal.” The net profit was £9.6 million ($12 million) (2023: £12.6 million, $15.75 million), including a loss from discontinued operations of £0.4 million ($0.5 million) (2023: £13.1 million, $16.37 million) and profit from continuing operations of £10 million ($12.5 million) (2023: £25.7 million, $32.12 million).
Earnings per share were £0.04 ($0.05) (2023: £0.06, $0.07), while free cash flow was negative at £-4.2 million ($-5.25 million) (2023: £24.5 million, $30.625 million).
CEO Thanks Staff and Investors
Andén concluded Kindred’s Q3 report by looking toward the company’s future and emphasizing that its focus on locally licensed markets is helping to create “long-term, sustainable revenue.”
“Our strategic focus on growth in locally licensed markets continues to generate long-term, sustainable revenue,” he said.
“Year-on-year Gross winnings revenue from locally licensed markets has grown 4% versus the same period last year (7% excluding North America). France has sustained strong momentum, further driven by both the Euros and the home Olympics. In addition to France, we have seen very positive results in the Netherlands, Romania and Denmark during the period.”
“I’m thrilled that our in-house sportsbook development continues to progress according to schedule. Following successful launches in several smaller markets, we are now on track for our first locally licensed market launch later this quarter.”
As the company enters its next phase with FDJ, the CEO also took the opportunity to thank investors and praise Kindred’s staff for their “unwavering resilience and dedication”.
Andén concluded: “With the public offer by FDJ now completed, and as we transition into the next exciting phase in Kindred’s history, I would like to take this opportunity to thank investors in Kindred, both past and present.
“Twenty years as a public listed company on Nasdaq Stockholm comes to an end. Together, we have made a significant contribution to the creation of a competitive, digital and sustainable online gambling industry.
“Finally, I would like to take this opportunity to thank the global Kindred team for their unwavering resilience and dedication. Where one chapter ends, a new one begins.”
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