Kindred Group, a gambling company, has released its preliminary results for the 2023 financial year, projecting an increase in both revenue and underlying EBITDA over the 12-month period. According to the update posted on January 22, the company expects revenue to reach £1.21bn (€1.41bn/$1.54bn), which would signify a 13.3% increase from the previous year’s £1.07bn.
The growth in revenue is attributed to a 12.4% rise in gross winnings revenue from business-to-consumer (B2C) activities to £1.17bn, and a 49.6% increase in revenue from the business-to-business (B2B) segment to £38.6m. However, this revenue growth also led to higher sales costs, which rose by 9.5% to £530.7m, resulting in a gross profit of £679.8m, up 16.4% from the previous year.
Despite an increase in other costs, such as a projected 16.8% rise in salaries to £164.4m and an increase in other operating costs to £90.5m, Kindred anticipates that its underlying EBITDA for the year will reach £204.5m, reflecting a 58.3% increase from 2022.
In the fourth quarter of 2023, Kindred expects to see continued growth, with revenue forecasted to reach £312.9m, up 2.4% from the previous year. This growth is attributed to strong performance in key markets, with the recent acquisition of Relax Gaming in October 2021 also contributing to encouraging growth.
The company noted particular growth in the Netherlands, the UK, and Romania, but was impacted by regulatory measures in Belgium and Norway. Despite reducing total cost of sales by 3.1% to £136.7m, Kindred expects underlying EBITDA for the quarter to increase by 45.3% to £56.8m.
In light of these positive performance indicators, the French lottery and gaming giant, FDJ, has made a €2.45bn offer to acquire Kindred. FDJ’s offer values Kindred at 10.9x its projected 2023 underlying EBITDA of £204.5m and has been unanimously recommended by Kindred’s board and backed by the FDJ board as well.
If the acquisition goes through, it would create the second largest operator in Europe’s gaming sector. Full year and Q4 results from Kindred are expected to be published next month.