2024 promises to be a pivotal year for the Swedish Kindred Group. The company aims to achieve a profit of at least €2.5bn (£2.14bn/$2.68bn) from the French gaming monopoly FDJ, setting a high bar for success. Recently, Kindred Group unveiled its first quarter fixed trading report, infused with significant French expertise and optimism. However, analysts from the IGF publication caution that it's premature to celebrate with champagne just yet!
Financial Indicators: Expectations vs. Reality
Contrary to the optimistic forecasts of gambling industry analysts and the bold projections of the Kindred Group, the financial performance for the first quarter of 2024 was lackluster. The sole bright spot in this financial snapshot was a healthy three percent year-on-year increase in active clients, bringing the total to over 1.66 million players, which is certainly a cause for celebration.
Total group revenue for the quarter ending March 31 was £307.7 million ($385.04 million), matching the revenue from the same period in 2023. Following Kindred's exit from the US market, underlying EBITDA rose by 20% to £59.3 million ($74.2 million) for the quarter, highlighting operational efficiencies and strategic initiatives, according to the company.
Profit before tax increased to £39.8 million ($49.79 million), with after-tax profit amounting to £31.4 million ($39.29 million). Despite Kindred's commitment to more ambitious financial performance after leaving the US market, the company publicly maintains that everything is going according to plan, not acknowledging any losses.
Kindred Group: Wind of Change
Stockholm-listed Kindred, founded in 1997, owns nine major online brands, including 32Red and Unibet. CEO Niels Anden stated, "We have made a strong start to 2024, with core business operations performing well and operational initiatives moving forward as planned."
The headcount reduction plans announced late last year are progressing as expected, and the exit from North America is anticipated to be completed by the end of the second quarter. Kindred's growth plan, launched in the fourth quarter of last year with a focus on Europe and Australia, is advancing through dedicated strategic growth projects in locally regulated markets.
During the first quarter, Kindred launched the Kindred Sportsbook Platform (KSP) in test mode. Management expressed satisfaction with the progress and overall results. "KSP remains one of our most important strategic projects and will give us the flexibility and differentiation we need to improve growth in locally regulated markets," said Niels Anden.
The most significant development is the proposal to sell Kindred to the French national lottery operator, FDJ (Française des Jeux), the dominant force in the local market. This potential influx of new capital and strategic direction captures the spirit of what's expected to be an exciting summer for sports betting.
Professional industry analysts are taking a wait-and-see approach, noting the cultural synergy between the French and Swedish companies. Whether these changes will bring the anticipated profit will be revealed in the financial report for the second summer quarter.
