Terminating coverage

FDJ completes the acquisition

Jul & Aug down 8% from Q2 in Sweden

Impressive margin progress

Strong Q2 beat as growth keeps accelerating despite marketing ratio remaining lower than expected. Limited revisions despite the beat – keep HOLD on the bid.

Strong Q2 with >22% margin

Euros boost strong Q2

Q2e: 8% organic top-line growth, 11% excl. North America exit, as we have indications of a strong summer. Stick to HOLD – neutral risk-reward ahead of the bid acceptance.

Swedish Q2 sales up 16% q-o-q

Decent Swedish sales in May q-o-q

Solid Swedish April sales m-o-m

Kindred Group Minor model adjustments

We have raised our 2024e adj. EBITDA by 2%, owing to the Q1 results and adj. EBITDA of GBP59.3m, up 20% YOY, 8% above our forecast (no consensus available) on surprisingly strong cost control (GBP10m lower opex than we forecast). The start to Q2 (daily average revenue up 8% YOY in constant currency, up to and including 4 February) was in line with our estimates, and the 2024 guidance for adj. EBITDA of GBP250m is unchanged. We do not consider these changes to be material, and we have not changed...

Limited surprises

Q1 was slightly above expectations but triggers limited revisions. Potential NL deposit limits could hurt Kindred as market leader. Keep HOLD on neutral risk-reward with SEK 130 cash offer.

Kindred Group (Hold, TP: SEK130.00) - And the winners are… the French?

Although we consider Paris-listed FDJ’s proposed cash offer unattractive, not reflecting Kindred’s true earnings potential (2025e EV/EBIT of 8x), we have downgraded to HOLD (BUY) and lowered our target price to SEK130, in line with the proposed bid (base case). At the same time, we do not rule out a strong medium-term outlook and 2024 earnings that could prompt a scenario where FDJ must raise its proposed bid to secure the necessary acceptance rate from Kindred’s shareholders.

Kindred Group (Buy, TP: SEK145.00) - We believe the pressure is health...

We expect sizeable Q4 earnings growth (adj. EBITDA up >35% YOY) thanks to easy comparables and stricter cost control. We are attracted to the possible key upcoming catalysts: 1) a potential business combination with a third party (based on the board’s communication); and/or 2) interim management pushing hard to maximise 2024e earnings (ambition of 25% adj. EBITDA growth YOY). We reiterate our BUY and SEK145 target price.

Kindred Group (Buy, TP: SEK145.00) - Dressed for 2024e earnings growth

We reiterate our BUY but with a lowered target price of SEK145 (155), having cut our 2024e EBITDA by 5%. Thanks to a strict cost-saving plan and profitable core market growth focus, we find the near-term earnings case largely de-risked. We expect investors to increasingly focus on the potential upcoming ‘third-party transaction’ as indicated by the board as well as the improved earnings for 2024e (EBITDA up 32% YOY).

Kindred Group: 4 directors

Four Directors at Kindred Group bought 2,625 shares at 90.493SEK. The significance rating of the trade was 50/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly...

Kindred Group (Buy, TP: SEK155.00) - Opportunity from low sports margi...

We reiterate our BUY and SEK155 target price ahead of the Q3 results, where we expect a lower-than-usual sports margin (player-friendly results in European football). Thus, we have cut our 2023e EBITDA by 4% but have left our 2024–2025e fairly unchanged. Details about the strategic review should be released near-term and the earnings growth case is intact, with 40% and 28% adj. EBITDA growth YOY for Q4e and 2024e, respectively.

Northern Lights

Kindred Group (Buy, TP: SEK155.00) - You should go with orange

We reiterate our BUY and have raised our target price to SEK155 (150), having boosted our 2023e adj. EBITDA by 3%, to GBP212m, comfortably in line or above Kindred’s reiterated guidance of at least GBP200m. We believe the new management is in good control of operations and see healthy double-digit earnings growth for H2e, supported further by a solid Netherlands. Coupled with the ongoing strategic review (which could include, e.g., a sale of the company, according to the board), we expect a cont...

Northern Lights

Kindred Group (Buy, TP: SEK150.00) - Speeding up to its true potential

We estimate Q2 adj. EBITDA grew c100% YOY (results due at 07:30 CET on 25 July), due to healthy progress in the re-regulated Netherlands, a strong sports margin, growing cost control, and easy comparables. We have raised our 2023e EBITDA by 2% (positive underlying growth trend offset negative FX) and increased our target price to SEK150 (145). We reiterate our BUY. Near-term earnings and the ongoing strategic review should be positive for the share price looking ahead.