According to the latest update, Kindred’s revenue for 2023 is expected to reach £1.21bn (£1.41bn/$1.54bn), which indicates a 13.3% increase compared to the £1.07bn reported in 2022. Gross winnings revenue from B2C activities is projected to grow by 12.4% to £1.17bn. The company also anticipates a 49.6% rise in other revenue from the B2B segment, reaching £38.6m. However, due to the revenue growth, there will be an increase in sales expenses, with total costs rising by 9.5% to £530.7m. Nonetheless, this will still leave a gross profit of £679.8m, an increase of 16.4%. Marketing spend is predicted to reach £220.7m, salaries are expected to rise by 16.8% to £164.4m, and other operating costs will increase to £90.5m. With the expected revenue growth, Kindred forecasts an underlying EBITDA of £204.5m, which represents a 58.3% increase from 2022.
In Q4 of 2023, Kindred also expects revenue growth, with projected figures of £312.9m, a 2.4% increase from 2022. Key markets have shown strong performance, and the recently acquired Relax Gaming business continues to exhibit promising growth. B2C revenue is forecasted to rise by 2.2% to £295.1m, while B2B revenue is expected to be 8.9% higher at £11.3m for Q4. Expansion was particularly notable in the Netherlands, the UK, and Romania, as well as in the casino segment. However, regulatory measures in Belgium and Norway had an impact. Casino and games gross winnings revenue increased by 5.0% year-on-year, while sports betting gross winnings revenue reached £114.9m. Additionally, 82.0% of gross winnings revenue in Q4 came from locally regulated markets. Total cost of sales for the quarter is predicted to decrease by 3.1% to £136.7m. Marketing costs were reduced, but salaries slightly increased. The underlying EBITDA for the quarter is anticipated to be £56.8m, an increase of 45.3% from 2022, despite the negative contribution from the North American market of £6.1m.
Kindred is set to announce its full-year and Q4 results next month. However, it has disclosed preliminary figures after receiving a €2.45bn acquisition offer from FDJ. The French lottery and gaming company has proposed acquiring all outstanding share capital of Kindred for SEK27.96bn. FDJ is offering SEK130 in cash for each Swedish Depository Receipt in Kindred, valuing the proposal at 10.9x its 2023 underlying EBITDA (£204.5m). Kindred’s board has unanimously recommended that shareholders accept the offer, and the FDJ board is also supporting the proposal. The deal, if finalized, would establish the second largest operator in Europe’s gaming sector.
