The following is a summary of the Kindred Group Plc (KNDGF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Kindred Group reported a solid growth in revenue, reaching GBP327.6 million, a 7% increase year-over-year, primarily driven by strong performance in sports betting and significant gains in locally regulated markets.

• Underlying EBITDA increased significantly by 32% to GBP73.6 million, demonstrating efficient cost management and an improved profitability margin of 22%, predicted to be 23% excluding North America.

• Free cash flow was notably high at just north of GBP41 million, reflecting operational efficiency.

Business Progress:

• There was substantial progress in sports betting with an 18% increase in gross winnings revenue, underpinned by a busy sports calendar including the Euros. The company also saw strategic advancements with the rollout of Kindred's sportsbook platform showing positive early results.

• The acquisition of the minority interest shares in Relax Gaming has strengthened Kindred's ownership to over 99%, aligning with its objectives for future growth.

• Relax Gaming itself has witnessed a 16% revenue growth, contributing an underlying EBITDA of GBP4.5 million with a 41% margin.

Opportunities:

• Growth was especially pronounced in locally regulated markets, with a record high of GBP267.1 million in gross winnings, a 12% increase from the previous year, reflecting the company's strategic focus on these markets.

• Kindred's strategic deepening in locally regulated markets and advanced product offerings like Bet Builder enhance potential for scaling financially and increasing market shares.

Risks:

• The performance has been subject to economic fluctuations as demonstrated by the need to exclude North American results to show growth and due to operational adjustments like the return of customer funds and licence returns impacting financial stability.

• While sports betting margins have been favorable, there is variability expected which could impact future revenue and profitability.

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