Amid FDJ takeover offer

Kindred posts revenue of $312.9M for Q4, driven by growth across key markets, casino segment

Reading time 1:46 min

Online gambling heavyweight Kindred Group has posted total revenue of GBP 307.3 million ($312.9 million) for the fourth quarter of 2023, up 2% from the same period last year, 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.

Casino and games continued to show encouraging performance with gross winnings revenue increasing by 5% compared to the prior year. Moreover, despite a challenging start to the quarter with a historically low sports betting margin in October, Sports betting gross winnings revenue reached GBP 114.9 million ($146.2 million) with a sports betting margin after free bets of 9.9%.

As per the report, the share of gross winnings revenue from locally regulated markets amounted to 82% for the final quarter of 2023. Meanwhile, underlying EBITDA hiked by 45% to GBP 56.8 million ($72.2 million) compared to the same period last year, and the underlying EBITDA margin increased by 5 percentage points to 18%. "This was predominantly driven by the increase in revenue, which is a testament to the group’s scalability, as well as a significant focus on cost optimization," the company said.

Furthermore, there was a notable increase in contributions from Relax Gaming, which showed an adjusted total revenue growth of 33% and an underlying EBITDA contribution of GBP 7.4 million ($9.4 million). Kindred said Relax Gaming’s business continues to show encouraging growth and "proof of its scalable business model."

Underlying EBITDA for the quarter includes a negative underlying EBITDA contribution from the North American market of GBP 6.1 million ($7.7 million). Excluding the impact of North America, the underlying EBITDA margin for the quarter was 21%.

As communicated in Kindred’s Q3 report in November last year, Kindred anticipates the full year 2024 underlying EBITDA to reach GBP 250 million ($317.9 million).

Earlier today, the company announced that French gaming company La Francaise des Jeux (FDJ) launched a takeover offer for 130 Swedish crowns ($12.43) a share, which would correspond to an enterprise value of EUR 2.6 billion ($2.83 billion) and represent a premium of 24% to Kindred Group's January 19 closing price.

FDJ believes that the acquisition of Kindred would create the second-biggest operator in Europe's gaming sector. Furthermore, the firm noted that this transaction will create value for FDJ shareholders. In particular, it is expected to lead to a more than 10% accretion in dividends per share, starting from the 2025 financial year to be paid in 2026.
The offer from FDJ represented the "most attractive outcome for shareholders", prompting Kindred's board to recommend the offer unanimously. 
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