Gaming operator the Kindred Group has published its results for Q3, hailing a “strong performance” across its key markets and the continuation of the positive momentum it found in the first half of the year.
Kindred Group’s total revenue for Q3 was £294.5 million, an increase of 4% on the previous year. The third quarter of the year saw a 3% increase in gross winnings revenue (B2C), which was up to £283.1 million.
Improvements in player engagement and efficiency within the organization were evident in the company’s EBITDA figure, which showed a 49% increase to £63.4 million (from £42.6 million last year).
“Our performance continues to demonstrate the strength of a diversified market footprint,” Nils Andén, Kindred Group CEO, commented. “The positive momentum gained throughout the first half of the year continued as we stepped into the final half of 2024, with key markets maintaining strong performance.”
FDJ transaction impacts profit before tax
The report showed the impact of what the group has called “significant strategic review costs,” referencing its recent Française des Jeux (FDJ) transaction. The transaction meant a total profit before tax of £12.5 million for Q3.
FDJ gained the support of 91.77% of shareholders to complete the acquisition of Kindred Group on Oct. 11. Following settlement delivery of the extended offer, FDJ’s shareholding in Kindred will be 98.60%. This settlement is expected on Oct. 29.
Profit after tax dwindled in the quarter, with Kindred reporting a profit before tax figure of £9.6 million (compared to £12.6 million last year). The figure includes a loss from discontinued operations of £400,000, and profit from continuing operations of £10 million.
Looking at the year to date, the picture is more positive, with Kindred reporting a 4% increase in total revenue, to £929.8 million, and a 3% increase in gross winnings revenue, to £897.9 million.
Rise in high-risk gambling revealed in Q3 results
Kindred’s Q3 results revealed a small increase in revenue from harmful gambling, compared to the previous quarter. The rise came despite investments in behavioral harm detection and other initiatives.
Unibet's parent company has long been aiming to reach 0% revenue from harmful gambling, however its Q3 results showed that high-risk players continue to account for a significant amount of its revenue.
High-risk revenue was reported at 3.2% during Q3 2024, an increase from the 3% reported in the previous quarter. However, the Q3 2024 figure is a reduction on the 3.3% reported at the end of Q3 in 2023.
Application for delisting announced
Last week, Kindred announced it was applying for delisting. FDJ’s recommended public offer to the holders of Swedish Depository Receipts (the “SDRs”) in Kindred Group, to tender all their SDRs in the company at a price of SEK 130 in cash per SDR. The offer then became unconditional on Oct. 3.
Following the acceptance period, the FDJ now controls in total roughly 98.60% of the outstanding SDRs in the company. The move resulted in Kindred’s board of directors applying for delisting of the SDRs from Nasdaq Stockholm. Kindred is expected to announce its last day of trading once a date has been confirmed by Nasdaq Stockholm.
Kindred CEO confident group is on right path
The quarter hasn't been without its challenges for the Kindred Group, but it remains on the right trajectory to achieve its underlying EBITDA target of £250 million by the end of 2024.
However, achieving this target could be made far more complex by the group’s recent decisions to exit markets like Norway, that don’t yet have a clear path to local regulation.
“Total revenue for the third quarter was GBP 294.5 million, representing a 4% increase compared to the same period last year (5% in constant currency). Excluding North America, total revenue increased by 6% for the same period,” Andén said.
Andén went on to explain that the group’s decision to exit markets like Norway “will negatively impact” the company's ability to reach its stated underlying EBITDA target, but said that the group is looking forward to its “transition into the next exciting phase in Kindred’s history.”
“I am confident that we are on the right path to delivering a compelling experience for customers, in a safe and secure environment, that ultimately delivers positive outcomes to all stakeholders.” Andén said.
