Posted on: April 26, 2023, 07:13h.
Last updated on: April 26, 2023, 07:13h.
The Kindred Group, one of the world’s most expansive gaming companies, has released its latest financial health report. Its improvements bring with them greater leverage to consider “strategic alternatives,” which the board of directors uses to include a possible sale of the company.
In a press release from today, Kindred CEO Henrik Tjärnström explained that the company had witnessed “encouraging improvements” in its profitability in the first quarter of the year. The operator has spent the past year restructuring its spending habits, which has paid off.
A separate press release it issued almost simultaneously hinted at a sale being back on the table. It’s just one of the possibilities, though, as the company is willing to explore all options that might maximize its value for shareholders.
Q1 Revenue Jumps Foward
The group’s average daily gross winnings revenue until April 23, 2023, reached £3.54 million (US$4.4 million). This was an increase of 38% over the Q2 results of last year.
However, the gross earnings of the group, without including the Netherlands, was £2.83 million (US$3.52 million). That reflects the growth of just 10%, with the Dutch market proving to be a vital part of the company’s operations. It was responsible for £57.3 million (US$71.32 million) in gross winnings revenue for the quarter.
We remain firmly on track towards market leadership for the full year 2023. However, while most of our core markets continue to perform well, the challenges faced in Belgium continue. This is primarily related to Kindred putting in place stricter anti-money laundering checks and improved responsible gambling processes,” said Kindred CEO Henrik Tjärnström.
In North America, Kindred had gross winnings revenue of £3.54 million (US$9.95 million) for the period. This figure will increase, thanks to a new license the company received on April 14 from the New Jersey Division of Gaming Enforcement. The regulator greenlit Kindred’s Unibet platform, which will go live in May.
The revenue the company made off its sports betting operations received a boost from a greater sports betting margin. It increased the margin to 12.2%, after giving away free bets, whereas Q2 of last year produced a margin of just 9.3%.
For the quarter, Kindred’s EBITDA (earnings before interest, taxes, depreciation and amortization) margin increased to 16%. This was possible, in part, from an improvement in total group revenue, which jumped 24% year on year to £306.4 million (US$3.81 million).
Sale Back On The Table
Kindred’s board of directors has been looking to offload the company’s assets for a while. The company was ready to sell last year, but couldn’t find anyone willing to pay. At the time, its market capitalization was about $1.72 billion.
The board is ready to try again, although a sale isn’t the only option it would consider. A company press release indicated that it had “unanimously decided to initiate a process to explore strategic alternatives.”
Among the options it would consider are a partial or full sale of the company’s assets. In addition, the board will accept other offers that might “deliver value for the company’s shareholders.” This could include a merger or some other form of alliance.
Kindred is already onboarding experts to help it figure out its next moves. It has teamed up with investment bank PJT Partners, Morgan Stanley and Canaccord Genuity for guidance and input.
The entities will have all the time they need to complete their reviews and make recommendations – Kindred didn’t give them a deadline. However, the operator seems to be taking a seriously hard look at its future.