Kindred announces North American exit and staff cuts
The group launched its strategic review in April with the aim of cutting costs. At the time, Kindred said this could lead to the full or partial sale of the business.
While the review remains ongoing, one of the first major developments from the initiative is the North America exit. This process will begin immediately, with Kindred saying it hopes to complete the withdrawal within six months. The exit remains subject to regulatory process.
Kindred said such a move will allow for the re-allocation of financial and tech resources to existing core markets. It added that this will improve ability to capitalise on core market potential and gain market share.
The group currently has a presence across a number of US states. Kindred’s Unibet brand has been active in Pennsylvania since September 2019. The brand initially launched as a retail sportsbook in partnership with Mohegan Sun Pocono. Kindred in July announced the launch of its proprietary tech platform in the US state of Pennsylvania.
Elsewhere, Kindred in May also rolled out the platform in New Jersey. The New Jersey Division of Gaming Enforcement gave final approval for the platform’s launch earlier in the year. Kindred was already active in the state via Unibet.
Other operating markets include Virginia with Unibet, Arizona and Washington State in partnership with the Swinomish Tribe. In addition, Unibet is active in Ontario in Canada.
More than 300 jobs to go
As part of the wider review, Kindred has also announced that more than 300 jobs will be cut across the business. This includes employees in North America and consultants, with the jobs set to go next year.
Kindred said addressing its organisational structure will allow it to achieve a leaner and more efficient business focused on selective growth initiatives. Coupled with the North American exit, Kindred expects to make approximately £40.0m (€46.2m/$50.8m) in savings.
Kindred added that the re-allocation of financial and tech resources will support additional initiatives across core markets. These include additional brand extensions of hyper local casino brands in select markets and continued product differentiation through exclusive content.
“The cost reduction actions announced today are both necessary and decisive,” Kindred interim CEO Nils Andén said. “While it is never a desire to inform valued colleagues of redundancies, this puts us in a stronger position to secure long-term growth for Kindred across our locally regulated core markets.
“We can now focus our resources and tech capacity towards strategic initiatives and selected markets where we see clear potential to grow our market share.”
Strategic review rumbles
Andén has been serving as interim CEO of Kindred since Henrik Tjärnström resigned back in May. Prior to this, Andén was chief commercial officer.
Incidentally, it was Tjärnström who kicked off the cost-saving plans at the turn of the year. This came after Kindred posted a year-on-year decline in revenue and net profit for its 2022 financial year.
At the time, Tjärnström said “no item is sacred” in terms of cutting costs. He said that the business was reviewing all areas of costs to improve spending.
Could Kindred push for a sale?
While Andén said the review remains ongoing, he did hint at the possibility of a full or partial sale. Speaking after Kindred today (29 November) also published its Q3 results, Andén said it is the board’s belief that shareholder value will be maximised through a third-party transaction.
“The strategic review initiated by the board remains ongoing and we continue to advance a number of options to deliver shareholder value,” Andén said. “The board currently believes that shareholder value will be maximised through a third-party transaction.
“We will provide a further update regarding the exploration of strategic alternatives when final decisions have been made by the board of directors.”
Kindred also leaving Norway
In addition to the North America exit, Kindred is also pulling out of Norway. This process is due to complete before the end of the year according to Norway’s regulator Lotteritilsynet.
This marks the end of a long battle that stretches back to 2019 when the regulator ordered Kindred subsidiary Trannel to cease operations. This escalated to Lotteritilsynet, which threatened Kindred with a daily fine of NOK1.2m if it did not withdraw.
In June 2022, Trannel lost the lawsuit it initiated against the regulator. Lotteritilsynet set a date for the fines to begin in September. However, Kindred vowed to stay in the market and appeal the decision.
in October 2022, Kindred announced Trannel would no longer target customers in Norway. Lotteritilsynet paused its daily fines although Kindred emphasised that this was done only as a gesture of goodwill.
Just weeks later, Lotteritilsynet said it would restart daily fines, which were then paused again in December.
Finally, in June 2023, the saga began to conclude as the Borgarting Court of Appeal ruled that Lotteritilsynet had been correct to issue Kindred with a cease and desist order.