Kindred Group targets 2025 revenue of £1.6bn amid plan to save 30% on sports betting costs
Kindred Group has set an ambitious target to achieve full-year 2025 revenue of more than £1.6bn ahead of a Capital Markets Day event in London.
Kindred Group CEO Henrik Tjärnström and CFO Johan Wilsby will today (14 September) unveil the operator’s long-term future strategic direction to investors, after what has been a turbulent 12 months for the Stockholm-listed business.
The new financial targets are headlined by the £1.6bn 2025 revenue figure, with Kindred aiming to generate 90% of that from locally regulated markets.
For comparison, Kindred generated total revenue of £1.26bn in full-year 2021, with 77% derived from locally regulated markets.
Kindred said the expected increase would be driven by a strategy to capitalise on the significant growth opportunities in existing markets, with the Netherlands – where Kindred relaunched operations on 4 July 2022 – expected to be an important contributor.
Between 4 July and 11 September, the Netherlands has provided average daily gross winnings revenue of £317,000 for Kindred, increasing gradually throughout the period.
The Netherlands will also be crucial for another strategic aim of reaching an underlying EBITDA margin of between 21% and 22% by 2025.
Kindred said this should be possible through increased product control and scalability, as well as continued cost optimisations.
One example of this is Kindred’s proprietary sportsbook strategy. The operator is developing the Kindred Sportsbook Platform (KSP) in-house to reduce reliance on third-party supplier Kambi.
Kindred Group CEO Henrik Tjärnström: “The entry into the Netherlands has also exceeded our expectations and we are well under way to reach our ambition of a 15% market share by the end of the year.”
The total costs for Kindred’s sports betting business are forecast to decrease by approximately 30% after the full deployment of KSP, which is expected beyond 2025.
Alongside the financial targets, Kindred has also committed to a distribution policy “over time” of between 75% and 100% of free cash flow after M&A for shareholders.
These will be paid in two equal tranches in the second and fourth quarter and will be complemented with share buybacks.
Kindred said the total pay-out of dividends and buybacks will be based on Kindred’s financial position, capital structure and future investments needs, including acquisition opportunities.
“I am delighted to share a more detailed view of our strategic direction and priorities we have set out at Kindred,” said CEO Tjärnström. “We have been a driving force in the transformation of the industry and understood early on the requirements to succeed in a locally regulated and complex environment.
“We now have critical building blocks in place, and I am fully confident in the direction we are taking.
“It is also very encouraging to see the progress being made in the development of our Kindred Sportsbook Platform, with key milestones already achieved, towards a selected market launch around year-end 2023.
“The entry into the Netherlands has also exceeded our expectations and we are well under way to reach our ambition of a 15% market share by the end of the year,” he added.
In the near-term, Kindred has also provided a Q3 2022 trading update, for the period between 1 July and 11 September.
Average daily gross winnings revenue for the period came in at £2.9m, representing a 12% year-on-year decrease, or a 6% increase when excluding the Netherlands impact.
Kindred is nonetheless confident of achieving overall Q3 revenue of between £270m and £280m and underlying EBITDA between £37m and £42m.