Kindred Group has confirmed that it remains “on track” to exit North America by the end of Q2 in 2024.
Speaking on an earnings call following the release of its Q1 results, Kindred CEO Nils Andén confirmed that the company expects to be “operationally exited” from the region midway through the year.
The Stockholm-based operator, which runs the Unibet Sportsbook and Casino, first informed investors of its plans to exit North America in the last quarter of 2023 as part of cost-cutting measures following a strategic review of its global operations.
At the time of the announcement, Kindred was live in Ontario, Arizona, Indiana, New Jersey, Pennsylvania, and Virginia. The operator was also previously operational in Iowa however it exited the state in Q3 2022.
Cost-cutting helps to push up net profit
Kindred published its Q1 2024 trading update today and reported a 22.7% increase in net profit to $39.1 million, helped in part by the cost reduction initiatives that the company has put in place.
Revenue for the company remained steady year-on-year at $382.6 million and Kindred credited a “significant focus on cost optimization across both marketing and administrative expenses” on the increase in net profits in Q1.
The improved operating efficiencies and stable revenue saw Kindred declare an underlying EBITDA of $73.4 million, an increase of 19% and the highest recorded EBITDA since Q3 2021 for the company.
Kindred reported growth in revenue from its Western European markets of the U.K. and the Netherlands, up 20% and 24% respectively. However, these gains were offset by the decline of its Nordic segment which registered a fifth consecutive drop in quarterly gross win revenue (GWR).
The company has scaled back its investment in North America following the announcement of its planned exit and as a result, GWR in the region dropped 25% to $7.1 million in Q1. Reduced marketing costs saw Kindred record an EBITDA loss of $1 million, improving from the $6.1 million EBITDA loss it reported in Q4 2023.
Kindred CEO Andén branded the company’s start to 2024 as a positive start to a “transformative year for Kindred”, currently under offer from Groupe FDJ.
“We have had a solid start to 2024 with the underlying business operations performing well and operational initiatives moving forward according to plan. The headcount reduction plans announced at the end of last year are progressing as intended and the North America exit is set to conclude towards the end of the second quarter this year,” added Andén. “Our growth plan that we launched during the fourth quarter last year continues at pace with dedicated strategic growth projects across locally regulated markets.”
