Kindred Group Q4 EBITDA soars 45% while revenue remains flat
Operator publishes brief trading update following £2.1bn takeover bid from FDJ as firm praises “significant focus on cost optimisation” to improve earnings
Kindred Group has reported flat Q4 2023 revenue growth of 2% year on year (YoY) to £312.9m as detailed in preliminary results published due to the £2.1bn bid for the business from La Française des Jeux (FDJ).
The operator has detailed its performance for the last three months of the year ahead of schedule following confirmation of the French firm’s offer.
Kindred’s share price has soared more than 17% in early trading on the Nasdaq Stockholm to SEK122 following the bid.
Total group revenue increased from £305.5m in Q4 2022 to £312.9m, with £301.6m derived from the group’s B2C operations and £11.3m from its Relax Gaming arm.
Kindred said sports betting revenue amounted to £114.9m despite a “historically low” sports betting margin in October, with the margin after free bets levelling out to 9.9% for the quarter.
Elsewhere, the Stockholm-listed firm noted that online casino revenue jumped 5% YoY in what it dubbed an “encouraging performance”.
The share of group revenue from locally regulated markets landed at 82%, with a key component of FDJ’s bid for the firm noting an exit from unregulated jurisdictions, namely Norway.
The operator said: “The increase [in group revenue] over the corresponding period last year was particularly driven by growth in the Netherlands, the UK and Romania, as well as in the casino segment. Regulatory measures in Belgium and Norway continued to impact adversely on overall growth.”
Underlying EBITDA soared 45% from £39.1m to £56.8m as Kindred said an increase in revenue and a “significant focus on cost optimisation” delivered the gains.
The operator also noted a 33% increase in underlying EBITDA for Relax Gaming alone, representing £7.4m.
Additionally, underlying EBITDA margin increased by five percentage points to 18%.
However, the total underlying EBITDA figure includes a negative contribution from North American operations of £6.1m.
The group expects underlying EBITDA to hit £250m for full-year 2024, with the firm to pull out of North America by the end of the Q2 in an effort to achieve annualised cost savings of £40m.
Kindred confirmed that its full-year 2023 report will be published on 7 February.