Stocks Tracker: Shares soar on questionable third-quarter quality

Kindred Group

1 October closing: SEK84.70

31 October closing: SEK96

Peak October closing: SEK96.32

October was a slow burner for Kindred Group, with the firm’s share price rising and falling with the regularity of a heartbeat. A steady, incremental month saw Kindred’s share price end up 13.3% up on the start of October as the market was pleased with both its bullish stance on regulation in Norway and CEO Henrik Tjärnström’s confidence for the future after a set of disappointing Q3 results.

The Stockholm-listed operator remains in a tussle with the Norwegian regulator over the presence of its Trannel subsidiary in the market, but there was some light at the end of the tunnel in October as the Norwegian Gambling Authority agreed to pause the daily fines it was set to impose on the operator.

The NGA had warned Kindred it would impose a fine of NOK1.2m (£100,016) a day for every day that Trannel did not cease operations in the region. The long-running legal saga has seen Kindred remain firm on its rights, claiming a ban goes against EEA law.

Kindred has agreed to passively accept Norwegian players but will no longer target consumers as part of the truce. The group’s share price jumped to SEK88.68 on Tuesday 11 October in an early month boost for the firm.

A quiet month returned the old adage of no news is good news, with Kindred’s stock rising consistently towards the end of the month. Approaching the group’s Q3 results on Thursday 27 October, Kindred’s share price peaked at SEK96.32, with hopes this would continue to rise on the back of the report. Unfortunately, a downturn across revenue and EBITDA, driven by tough comparisons in the Netherlands, meant the group’s share price fell to SEK94.16 by close of play.

Tjärnström was calm in his assessment of the situation, and noted Q4 and 2023 would see the firm get back on track. Whether the CEO’s words had an impact on the market can’t be confirmed, although Kindred’s stock did rise following the results reaction dip, closing out the month at SEK96.

Kambi

1 October closing: SEK158.85

31 October closing: SEK174.60

Peak October closing: SEK174.65

Kambi may have been fearing the worst halfway through October as its share price plummeted to SEK152.05. This came after a positive start to the month as its shares rose on the news of a settlement agreement with PENN Entertainment regarding its migration away from the Kambi tech stack.

Kambi has already lost DraftKings and 888 as partners in recent history, with fears in some circles it could lead to a mass exodus of clients. PENN Entertainment is set to move to its own in-house platform, powered by theScore which it acquired for $2bn in October 2021.

On Thursday 6 October, Kambi and PENN revealed a new agreement worth £24.2m, which will see PENN migrate its online sportsbook off the Kambi platform during Q3 2023, with its retail sportsbook moving from the platform to PENN’s in-house proprietary technology in 2024.

The news sent Kambi’s share price soaring from SEK167 to SEK173.50 as the market reacted positively to the new agreement, with the deal securing certain revenue for the firm moving forwards.

The joy of an early month peak quickly dissipated, as Kambi’s share price began to tumble throughout the remainder of the month, bottoming out at SEK152.05 on Wednesday 19 October. A steady rise as the group geared up for its Q3 results was a positive result, before a peculiar end to the month for the supplier.

Tuesday 25 October saw Kambi’s stock reach a monthly high of SEK174.65 before plunging to SEK160.50 the following day after the release of the firm’s quarterly report. Revenue fell by 12% to €36.7m while EBITDA dropped by 47% to €10.7m in a less-than-spectacular set of results for the firm.

However, as the stock market is prone to do, it took onlookers by surprise, as Kambi’s share price rocketed following its poor Q3 showing to close out the month at its second-highest closing price of the month at SEK174.60.

Entain

1 October closing: 1,092.50p

31 October closing: 1,263p

Peak October closing: 1,272.50p

One of the few firms to kick the trend on pleasing the market with its Q3 report, Entain saw its share price leap to 1,133p from a previous close of 1,088.50p despite posting just a 2% rise in net gaming revenue (NGR).

The London-listed operator citied a strong three-year CAGR (compound annual growth rate) increased by 11% for online NGR, with investors looking towards the future rather than focusing on the present.

Entain is set to close the acquisitions of BetCity in the Netherlands and Croatian firm SuperSport in Q4 which will bolster the firm’s bottom line, along with the FIFA World Cup kicking off later this month.

In more positive news Entain’s BetMGM JV with MGM Resorts International holds a 25% market share in the US where it operates, with NGR of just over $400m reported for the quarter.

Entain’s share price continued to rise heading into the third week of the month, before dipping slightly and recovering on the news of the firm’s update on its planned expansion into Africa.

The FTSE 100 firm edges closer to entering Zambia and Kenya, while EGR understands it will continue to look at additional African markets, as well as waiting eagerly on regulation in Brazil and opportunities in Asia, such as India.

Entain enjoyed a strong end to October as it started Q4 impressively, with its share price reaching a peak of 1,272.50p before the month’s close.

Betsson

1 October closing: SEK65.97

31 October closing: SEK80.83

Peak October closing: SEK84.38

An early shot to the arm in October accelerated Betsson’s stock throughout the month before a bizarre dip following record financial results caused some bewilderment, rhyme or reason seemingly absent from the markets over the past four weeks.

The Swedish firm set tongues wagging on Thursday 6 October after indicating it was expecting to net Q3 revenue of between €199m and €201m along with a record EBIT return of between €37.5m and €39m, ahead of a full disclosure towards the end of the month. The lofty figures saw the stock market react with fervour, sending Betsson’s share price rocketing from SEK69.05 to SEK75.71 by close of play.

The boost sustained the firm throughout the remainder of October, as anticipation built around the confirmation of its Q3 results. A fever pitch was reached a day before the results, with Betsson’s stock reaching SEK84.38, before dawn broke and the share price went tumbling.

Q3 did see Betsson break records for operating profit, turnover and customer deposits, with revenue also hitting expectations after the group returned €200.3m for the period. Betsson also revealed it had taken an 80% share in B2B sportsbook firm KickerTech.

The impressive results, driven by continued growth in Latam and Central and Eastern Europe and Central Asia (CEECA), and M&A did little to appease the market, with the group’s share price slipping to SEK79.04.