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Kindred expects revenue and earnings growth in 2023

| By Robert Fletcher
Kindred Group has posted a preliminary set of results for its 2023 financial year, with both revenue and underlying EBITDA expected to rise during the 12-month period.
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Published today (22 January), the update shows revenue of £1.21bn (€1.41bn/$1.54bn). If this is the case, this would be 13.3% more than the £1.07bn reported by Kindred in 2022.

Gross winnings revenue from B2C activities is set to increase 12.4% to £1.17bn. Meanwhile, Kindred said other revenue from the B2B segment will rise 49.6% to £38.6m.

However, revenue growth meant more spend on sales, with total cost here rising 9.5% to £530.7m. This, Kindred says, will leave a gross profit of £679.8m, up 16.4% to £679.8m. 

As for other costs, marketing spend is expected to reach £220.7m, down slightly year-on-year. Salaries are forecast to rise 16.8% to £164.4m and other operating costs will rise to £90.5m.

However, such is the expected impact of revenue growth that underlying EBITDA for the year is set to hit £204.5m. This, Kindred says, will be 58.3% higher than 2022.

UK and Dutch growth pushes revenue up at Kindred in Q4

The trading update also includes data on Q4, during which Kindred also expects growth. For the final three months of 2023, Kindred says revenue will reach £312.9m, up 2.4% on 2022. 

Kindred says it saw continued strong performance in several key markets. In addition, it said the Relax Gaming business, acquired in October 2021, continues to show encouraging growth.

B2C revenue is set to increase 2.2% to £295.1m, with B2B forecast to be 8.9% higher for Q4 at £11.3m. 

Analysing the quarterly performance, Kindred says increases were particularly driven by growth in the Netherlands, the UK and Romania, as well as in the casino segment. However, it was impacted by regulatory measures in Belgium and Norway.

Casino and games gross winnings revenue increased 5.0% year-on-year, while sports betting gross winnings revenue hit £114.9m. Kindred also said share of gross winnings revenue from locally regulated markets was 82.0% for Q4.

Turning to spending, total cost of sales is set to reduce 3.1% to £136.7m. Marketing costs were also lowered in Q4 but salaries slightly increased.

As such, underlying EBITDA for the quarter is anticipated to be £56.8m, up 45.3% on 2022. This was despite negative underlying EBITDA contribution from the North American market of £6.1m.

FDJ tables €2.45bn offer to acquire Kindred 

Kindred is not due to publish its full year and Q4 results in full until next month. However, it has posted the preliminary figures in the wake of the acquisition offer from FDJ, which has been confirmed this morning.

The French lottery and gaming giant submitted an offer worth SEK27.96bn to acquire all outstanding share capital of Kindred. 

FDJ has offered SEK130 in cash for each Swedish Depository Receipt in Kindred. The group says that the price also places the full value of the proposal at 10.9x its 2023 underlying EBITDA (£204.5m).

Kindred has “unanimously” recommended shareholders accept the offer. The FDJ board is also backing the proposal.

FDJ said the deal would create the second largest operator in Europe’s gaming sector.

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