Kindred Group Exits North American Market Amidst Mixed Q3 2023 Results

While the company saw a 2% increase in total revenue, reaching GBP 283.9 million, its performance in the United States tells a different story.

Key Financial Outcomes

The revenue from gross winnings in the B2C sector increased by 1%, reaching a total of GBP 274.7 million. The underlying EBITDA also saw a growth of 6%, amounting to GBP 42.6 million.

The profits before and after tax were GBP 15.1 million and GBP 12.6 million, respectively. Moreover, the number of active customers increased by 7%.

From January to September 2023, there was a total revenue surge of 18%, amounting to GBP 897.6 million.

U.S. Market Challenges and Responses

Despite these gains, the company’s performance in the U.S. has led to significant strategic decisions. In the wake of less-than-expected sports betting margins and ongoing regulatory complexities, Kindred is taking decisive steps:

• Exiting its operations in North America.
• Implementing cost-reduction strategies including workforce reduction.
• Sharpening its focus on profitable growth in its core markets.

These initiatives are part of Kindred’s broader strategic review, aiming to streamline operations and maximize shareholder value.

Nils Andén’s Perspective

“The cost reduction actions announced today are both necessary and decisive. While it is never a desire to inform valued colleagues of redundancies, this puts us in a stronger position to secure long-term growth for Kindred across our locally regulated core markets. We can now focus our resources and tech capacity towards strategic initiatives and selected markets where we see clear potential to grow our market share”, says Nils Andén, Interim CEO of Kindred Group.

Looking Ahead

Kindred’s exit from the North American market is expected to yield annual gross savings of about GBP 40 million. The company remains committed to achieving its projected underlying EBITDA of GBP 250 million for 2024, with ongoing efforts to strengthen its position in key international markets.

Our Comment on the Article

Kindred Group’s latest financial report and subsequent strategic decisions highlight the volatile nature of the iGaming industry, especially in the U.S. market.

The company’s move to exit North America, while a significant shift, is a pragmatic response to the unique challenges presented by this market.

This decision, along with the focus on cost optimization and reinforcing core market operations, signals a strategic pivot aimed at consolidating strengths and securing long-term growth. As the iGaming landscape continues to evolve, Kindred’s adaptability and strategic foresight could serve as a model for others facing similar challenges in the industry.