Kindred Group plc’s Board of Directors decided to make some changes in terms of strategic alternatives so the shareholder value would be increased.
Merger or selling as possible solutions:
Kindred is famous all around the world for its online gaming and sports betting content. The company’s most recent decision is to use that to enhance the value for its shareholders. The process will begin with exploring various strategies and alternative solutions that will help the company maximize its value.
Some of the solutions that the Board considers are a merger or even a sale of Kindred, but it’s not decided if the whole company would be sold or only a part of it.
Morgan Stanley & Co. International plc and Canaccord Genuity are the company’s financial advisors during the process. The legal advisor is White & Case.
It’s still unknown when the final decision will be made, and nobody can predict the outcome of the review. The company doesn’t have any legal obligations to announce its decision and progress that was made regarding the solution since everything is wrapped up and finally decided.
Increased profit during Q1:
However, Kindred published the results of the first quarter of 2023. In total, B2B and B2C operators earned GBP 306.4 million (US $246.7). Before paying taxes, the company’s profit was GBP 30.4 million (US $7.6 million), and after taxes were paid, the remaining profit was GBP 25.6 million (US $6.4 million).
Every share got GBP 0.12 (US $0.03), and 2.286.000 shares were sold.
When it comes to the customer base, the number of active gamers was higher than before. During this quarter, it increased by 18%.
The average Gross winnings revenue on a daily basis was GBP 3.54 million, which is 38% higher than in the second quarter of 2022.
Henrik Tjärnström, CEO of Kindred Group, said: “The first quarter of 2023 has seen encouraging improvements in both revenue and profitability, with the underlying EBITDA margin increasing to 16 percent. The cost optimization initiatives previously communicated have been implemented during the quarter, however, there is a lag before we see the full effect on the numbers.”
He added that the current strategic focus was on selling unique products.
The most successful market during the first quarter was the Netherlands, and North America also saw significant improvement. However, the challenges continue in Belgium, and Tjärnström explains that this is a consequence of the company’s new regulations related to money laundering and improving the whole responsible gambling process.
It is expected that the changes in the company will lead to the first significant results by 2025 and that Kindred will meet its financial goals by that year.