The Kindred Group is going through a difficult period, complete with both good news and bad news. However, the global gaming company has seen a slip in its revenue, which is now being followed by a share buyback that begins today.
In June, Kindred held a special shareholders meeting to receive approval for the buyback. After receiving permission, it put into motion a plan to repurchase as many as 23 million shares and, in a press release from today, acknowledged that it has begun the exercise.
Kindred will continue until it purchases all of the listed shares or until its next annual general meeting. There may be some slow movement between now and that meeting next year, as the company won’t rebuy any shares in the closed periods ahead of the release of its quarterly reports.
Addressing Long-Term Goals
Kindred currently holds just under 10 million of its own shares, with 230.12 million issued. Because it cannot hold more than 10% of the outstanding amount, it plans on canceling the shares it repurchases.
Currently, Kindred is trading at about SEK88.92 (US$8.80). As such, 23 million shares are worth approximately $202.4 million.
After a poor performance in the first quarter, Kindred followed it with another in the second. As a result, its revenue for the first half of the year was $579.1 million, 32.2% less than a year ago.
This was due, in part, to a slowdown in sports betting everywhere. The second quarter of the year, with no NFL, no college basketball and only limited soccer, routinely experiences a lull in betting activity. The NBA, MLB and other leagues are active, but they don’t command the same numbers as other sports.
In addition, the changes in the UK market, which is likely going to experience an increase in controls and greater limits, are hindering Kindred’s performance. Having to adapt to the transitioning German, Norwegian and Dutch markets doesn’t help.
Kindred exited Germany and the Netherlands, although it’s on its way back to the Dutch market. In Norway, losing a major court battle over its ability to offer its services in the country seriously put its future there in jeopardy.
There’s also a lawsuit pending in Sweden that is going to cause problems. A player accuses Kindred’s Unibet of feeding his gambling addiction and wants $1 million in compensation. Because Sweden requires operators to know who is an addict and who isn’t, the lawsuit has a good chance of finding success.
Time for a Restart
August is bringing the new NFL season, with preseason games starting in less than two weeks. As a result, Kindred and its subsidiaries have an opportunity to begin a dedicated effort to have a more lucrative second half of the year.
The NFL is always a hot target for bettors, as is international soccer, which is now about to see an increase in activity, as well. As such, now is the time for Kindred to get back in the saddle if it’s determined to push forward.
Kindred has reportedly been shopping itself around for a buyer. However, it’s not having much luck.
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