In today’s update released on 22nd January, Kindred Group reported a substantial revenue of £1.21 billion (€1.41 billion/$1.54 billion), marking a significant 13.3% increase from the previous year’s £1.07 billion in 2022.
The growth in revenue was predominantly driven by the Gross winnings revenue from their Business-to-Consumer (B2C) activities, which is projected to surge by 12.4% to reach £1.17 billion.
In addition, Kindred anticipates a remarkable 49.6% rise in other revenue from the Business-to-Business (B2B) segment, reaching £38.6 million.
However, this revenue boost also led to increased expenditures on sales, with total costs rising by 9.5% to £530.7 million.
Despite this, Kindred expects to attain a gross profit of £679.8 million, representing a substantial 16.4% increase.
Further analysis of costs reveals that marketing expenses are projected to reach £220.7 million, showing a slight decrease year-on-year.
Salaries are expected to rise by 16.8% to £164.4 million, while other operating costs will also see an increase to £90.5 million.
The overall impact of this revenue growth is expected to drive Kindred’s underlying EBITDA for the year to a remarkable £204.5 million, a significant 58.3% higher than 2022.
The trading update also includes data on Kindred’s Q4 performance, during which they foresee additional growth.
For the final quarter of 2023, Kindred expects revenue to reach £312.9 million, representing a 2.4% increase from 2022.
Key markets such as the UK and the Netherlands have contributed to this growth, and the acquisition of Relax Gaming in October 2021 continues to exhibit promising expansion.
Breaking down the Q4 performance, B2C revenue is projected to increase by 2.2% to £295.1 million, while B2B is forecasted to rise by 8.9% to £11.3 million.
The growth was particularly driven by the Netherlands, the UK, Romania, and the casino segment. However, Kindred faced challenges in Belgium and Norway due to regulatory measures.
Casino and games gross winnings revenue increased by 5.0% year-on-year, with sports betting gross winnings revenue reaching £114.9 million. Kindred also noted that 82.0% of gross winnings revenue in Q4 came from locally regulated markets.
In terms of spending, the total cost of sales is expected to decrease by 3.1% to £136.7 million, and marketing costs were reduced in Q4, while salaries experienced a slight increase.
Consequently, underlying EBITDA for the quarter is anticipated to be £56.8 million, marking a 45.3% increase from 2022, despite a negative contribution from the North American market of £6.1 million.
Kindred’s full-year and Q4 results will be officially published next month.
This announcement comes in the wake of an acquisition offer from the French lottery and gaming giant, FDJ, who proposed a €2.45 billion offer to acquire all outstanding share capital of Kindred, a move supported by Kindred and the FDJ board, with the potential to create the second-largest operator in Europe’s gaming sector.