Kindred Group reports flat Q1 revenue alongside strong Dutch and UK growth

Kindred Group has posted flat Q1 2024 revenue of £307.7m, up slightly from £306.4m, with the operator citing a “solid start to a transformational year”.

B2C revenue also remained flat at £297.6m compared to £297.3m in Q1 2023, with the Swedish operator championing an all-time high of 84% of revenue coming from locally regulated markets.

In fact, management reported a 5% increase, excluding North America, in locally regulated revenue, mainly driven by the Netherlands, Romania and the UK.

As for the bottom line, EBITDA jumped 23% year on year (YoY) from £47.3m to £58.3m, while underlying EBITDA increased 20% from £49.4m to £59.3m.

Post-tax profit rose 22.7% from £25.6m to £31.4m during the reporting period as the Unibet and 32Red parent company also noted a 3% uptick in active customers in the first three months of the year to 1,667,564.

Nils Andén, Kindred Group CEO, said: “We have had a solid start to 2024 with the underlying business operations performing well and operational initiatives moving forward according to plan.

“The headcount reduction plans announced at the end of last year are progressing as intended and the North America exit is set to conclude towards the end of the second quarter this year.

“Our growth plan that we launched during the fourth quarter last year, focusing on Europe and Australia, continues at pace with dedicated strategic growth projects across locally regulated markets,” he added.

Breaking revenue down by vertical, casino dominated the share of the pie for the firm in Q1, snaring 56% of total group revenue as the division saw revenue climb 3% against Q1 2023.

Additionally, bosses noted that while group actives were up 3%, casino actives increased 6% during the quarter amid growth in the Netherlands and the UK.

In terms of sports betting, revenue fell 3% as the vertical accounted for 39% of total Kindred revenue, with the firm blaming the decrease in the number of fixtures YoY following the congestion of the domestic football calendar last year post-World Cup.

Poker revenue slipped from £15m to £13.8m, representing an 8% downturn, while revenue from the firm’s B2B business, Relax Gaming, was up 11% o £10.1m.

Looking at revenue by region, Western Europe took the lion’s share of revenue at 64%, or £191.5m, demonstrating 10% growth YoY.

Continued strengthening in the Dutch market saw a 24% rise in revenue coupled with a 26% leap in actives, while the UK also returned a 20% increase in revenue.

Nordics revenue slipped 15% to £65.2m, with a 20% decline alone in Sweden as Kindred noted greater pressure on revenue from “customers in higher value segments”.

Elsewhere, Romania was the shining light in Central, Eastern and Southern Europe (CESE) as revenue rose 17% despite total revenue for the CESE region dipping 8% to £29.8m. The company said this was on the back of weaker casino activity and product margins in Estonia and Italy.

The firm also released a brief trading update for Q2, up to and including 21 April, which showed group revenue (excluding US) up 8% compared to the daily average for full Q2 2023.

However, Kindred did note the sporting betting margin for this period landed at 11.3%, well above the group’s long-term average of 9.3%.

The publication of the results comes after Kindred Group confirmed the £2.1bn public cash offer from French operator La Française des Jeux (FDJ) to acquire the business.

Kindred’s board has unanimously recommended that shareholders accept the offer. FDJ “does not intend to materially alter the operations of Kindred”, other than the exit from the Norwegian market, Kindred said in the Q1 report.

That offer represented the culmination of Kindred’s strategic review, which will see the group exit North America by the end of Q2, as well as reduce global headcount by 300.