Kindred’s competitive advantages
On 22 January 2024, La Française des Jeux SA (FDJ) announced a public cash offer to the holders of Swedish depository Receipts (SDRs) in Kindred Group plc to tender all their SDRs in the Company at a price of SEK 130 in cash per SDR. The Board of Directors of Kindred unanimously recommended that the shareholders of Kindred accept this offer. The acceptance period for the offer is expected to expire on 19 November 2024 and the potential completion of the offer is conditional upon several criteria.
A large and growing underlying market
Supported by the strong and growing demand for online entertainment, Gross winnings revenue within the non-cyclical global online gambling market is projected by H2 Gambling Capital to show a compound annual growth rate (CAGR) of 10.7 per cent between 2023 and 2028. In 2023, the size of the global online gambling market was estimated at GBP 90.7 billion, corresponding to 29.6 per cent of the total global gambling market, according to the same market research firm. By 2028, H2 Gambling Capital expects the online share to have grown to 36.8 per cent.
10.7% Global online gambling market compound annual growth rate 2023-2028
A leading online gambling operator with a diversified footprint
With annual revenues of GBP 1.2 billion and a solid active B2C customer base of 3.0 million, Kindred is a leading online gambling operator. We are well diversified over 13 local licenses in Europe and Australia* and 9 brands. Unibet shines as our flagship brand, complimented by a suite of strong hyperlocal casino brands. 82 per cent of our Gross winnings revenue is locally regulated and as a result of the regulation carry lower operational risk. Thanks to our bespoke technology and scale, we can attract and retain profitable customers while mastering requirements and complexity, absorb costs and build sustainable success.
GBP1.2bn Annual revenues 2023 (2022: GBP 1.1bn)
* In 2023, Kindred also had operations in North America. An exit process is under way and the expectation is to have B2C operations fully exited by the end of Q2 2024, subject to regulatory process.
Solid foundation for continued long-term profitable growth
Kindred has a strong record of revenue growth and operational efficiency. Through our scalable and bespoke technology platform, leading brands and attractive products, we provide our customers with a unique experience throughout long-lasting relationships. The cost reduction initiatives currently under way are enhancing scalability as we accelerate focus on market share gains in core markets. Crucial building blocks are Relax Gaming and the KSP as they enable high product quality and differentiation while adding to the Group’s scalability and long-term profitability.
16.3% Compound annual growth rate of Kindred revenue 2013-2023
A determined focus on sustainability
Kindred holds a firm focus on sustainability and we are well on our way to obtaining around 90 per cent of our revenues from locally regulated markets, where authorities impose high demands. Our purpose is to “transform gambling by being a trusted source of entertainment that contributes positively to society”. One of our priority areas is responsible gambling and, through our approach, we have set an ambition to reach 0 per cent revenue from harmful gambling. Our efforts provide long-term profit support, reduce volatility and uncertainty, and strengthen our ability to attract and retain the best talent.
3.1% Share of GWR from high-risk customers in Q4 2023
A profitable business with strong underlying cash flow generation
Kindred has a track record of strong profitability and cash flow generation. The cost initiatives taken are enhancing Group scalability and the strong balance sheet allows for continued investments in both organic growth and selective acquisitions. Kindred has a solid history of capital returns to shareholders and the current distribution policy encompasses a total pay-out ratio of dividends and share purchases of ~75-100 per cent of free cash flow over time.**
~75-100% Pay-out ratio of free cash flow over time
** Free cash flow is defined as net cash generated from operating activities, excluding movements in customer balances, less cash flows from investment activities (including acquisitions) and lease payments.
