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888 confirms 10% revenue decline in Q3

| By Robert Fletcher
888 has released a further trading update confirming a 10% year-on-year decline in revenue to £405.0m (€466.8m/$494.4m) for the third quarter of its 2023 financial year.

The operator last month forecast a 10% drop in Q3 revenue due to a number of factors. These, 888 says, include compliance changes in dotcom markets, with slower recovery in customer activity and revenue than initially anticipated.

888 also references safer gambling changes in the UK and customer-friendly sports results in September. These, it said, impacted win margin across the UK and international.

Publishing its latest trading update today (18 October), 888 confirms this decline for the three months to 30 September. It also says the trends and drivers for this dip remain the same as in the previous update.

Retail revenue edges up at 888

Going into further detail on divisional performance, 888 says the main highlight was growth in its retail segment. Here, revenue increased 1% year-on-year, driven by improved product offering through investment in self-service betting terminals and gaming cabinets. However, this was slightly offset by customer-friendly sports results.

Turning to online, the UK and Ireland online business reported a 10% drop in revenue. This was due to the ongoing impact of safer gambling changes and refined marketing approach, as well as a lower-than-expected betting net win margin from sports results in September.

As for international operations, revenue fell 19% and average monthly actives were down by 2%. 888 notes an ongoing significant impact from compliance changes in dotcom markets, particularly the Middle East. It also reports a slower recovery in revenue and customer activity than initially anticipated.

William Hill acquisition impact 

888 also references the ongoing impact of its acquisition of William Hill assets. The operator acquired William Hill’s non-US assets from Caesars for £1.95bn in July last year.

888 says synergy delivery is on track and significant cost savings are being delivered. This, it adds, have helped to partly mitigate the impact of regulatory and compliance changes.

The group has also integrated into William Hill online, while the initial integration of William Hill’s proprietary global trading platform into 888’s in-house platform has taken place. As such, certain sports are now being traded across the group from one trading engine.

888 still expects revenue decline in Q4

Looking ahead, 888 said expectations for the fourth quarter remain largely the same. This, it says, will likely include a single-percent decline in revenue.

As for the full year, 888 says its adjusted EBITDA margin will be between 18% and 19%, the same as last month’s forecast.

In addition, 888 references the ongoing situation in Israel. The group says it has activated business continuity plans and these are working well, with no significant impact on business operations expected. It adds that it continues to prioritise the safety and wellbeing of more than 500 colleagues in Israel and their families.

Widerström takes charge at 888

The trading update comes after Per Widerström this week took over as CEO at 888. He was appointed to the role in July, taking over from Lord Mendelsohn. Since the removal of Itai Pazner in January, Mendelsohn had run 888 as executive chair. Lord Mendelsohn now returns to a non-executive position.

“I am very excited to have joined the 888 Group as the new CEO,” Widerström said. “I have already been struck by the strength of the group’s assets and its clear potential, as well as the ambition of our team.

“I’m happy to note that despite the regulatory challenges the group has faced this year, the hard work by the team is already showing signs of results meaning that we head towards the end of the year with positive momentum and well placed to grow in the coming years.

“This is a business with a very strong foundation for profitable growth. But there are clearly also several areas for improvement which we will focus on to unlock our full potential and drive value creation. 

“I am looking forward to working closely with our fantastic people in the group, the talented executive team and the board to ensure we are in the best possible position to deliver our plans and maximise value creation.”

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