Lord John Mendelsohn has stated that 888 Holdings will soon prove “the compelling and strategic logic” of its corporate enlargement, as detailed to investors in 2021.
In his role as Executive Chairman, Mendelsohn addressed investors following the publication of 888’s H1 2023 interim results.
Improved H1 trading saw 888 register a 3x jump in EBITDA to £155m. Yet, its business continues to be hindered by debt and amortisation costs, which resulted in period losses of £33m.
In the here-and-now, Mendelsohn cites that 888 is progressing as a much-changed business following its incorporation of William Hill assets in 2022.
“As a board, we remain resolutely focused on sustainability and compliance, which is fundamental to the business we are building,” he stated.
“The actions to enhance our compliance framework have had an impact on our revenue generation. But we are confident that these are the right actions for the business to create long-term sustainable value.”
888’s new compliance framework has “changed the shape of the business”, with the LSE group now accounting for “95% of its Q2/Q3 revenues being generated from locally regulated-or-taxed markets”.
Case in point, Mendelsohn emphasized 888’s ‘open approach’ with the Gibraltar Gaming Commissioner (GGC), which led to a £2.9m settlement related to the KYC and due diligence failings of its Middle East subsidiary.
Investors were reminded of the business case for 888’s £2bn acquisition of William Hill UK and International units. “888 was a business that was historically sub-scale, and overweight in its offshore market mix.
In need of a “significant acceleration in growth”, 888 “embarked on an ambitious M&A plan to transform our scale… I’m pleased to say that we are making good progress on our ambition towards our 2025 target of generating at least £2bn in revenues.”
As such, the execution of 888’s enlargement strategy is concentrated on optimising the key drivers of “revenue, marketing, and operating costs”, as radical actions have been taken “to change the mix of company revenues, to provide a higher quality, more profitable, and sustainable platform for growth”.
In addition, 888 and William Hill have installed a “country-focused model, combining brand and marketing plans to enhance ROI”, which should see the group “achieve scale benefits by removing duplication and delivering best-in-class scalable functions to support our global ambitions”.
Overall, this is a reflection of 888’s plan to “create a customer-focused organisation with high-growth potential”.
Key to achieving 888’s goals will be the appointment of Per Widerström as the new Group CEO, taking effect on 16 October.
Having led the 888 executive search, Mendelsohn branded Widerström as “the clear standout candidate for the board, who is an inspiring leader with extensive industry experience”.”
Mendelsohn stated: “Per has a proven track record in executing value creation strategies in omni-channel gaming and betting businesses.”
“Overall, I’m confident that we are building a world-class team to deliver on our value creation plans.”