888 pledges to heal 2023 scars with new Executive Vision

888 Holdings has cited a direct impact of £80m on its corporate income due to its “proactive shift away from dot-com markets”.

The impact was declared by the LSE gambling group publishing its pre-close statement on 2023 trading, described as a “year of significant regulatory and compliance headwinds.” 

Closing year-end trading, 888’s Q4 revenues stood at £424m, a 7% decrease year-over-year from £457m, yet 5% higher than Q3 2023’s £406m.

Pre-close results saw 888 declare full-year 2023 revenues of £1.71bn, reflecting an 8% decrease on FY2022 comparatives of £1.85bn.

As noted: “Revenue was further impacted by customer mix changes in the UK due to additional safer gambling measures, alongside the change in the Group’s marketing approach to focus more on sustainable revenue and profitability.”

A breakdown by segment saw 888 register an 8% revenue decline of its UK online gambling unit to £658m (FY2022: £717m), attributed to safer gambling changes and implementing a new marketing approach. 

Furthermore, citing “significant compliance changes in dot-com markets”, the LSE firm registered a further 16% revenue decline of its international unit to £517m (FY2022: £614m).

Year trading saw 888 highlight the positive recovery of its William Hill retail unit which registered a 3% increase in revenues to £535m (FY2022: £519), benefitting from an improved offering of Self-Service Betting Terminals (SSBTs) which helped to offset a 3% reduction in the size of its estate.

Declaring his first statement as Group CEO of 888 Holdings, Per Widerström commented: “In FY23 the Group made important strategic and operational progress in the face of some significant regulatory and compliance headwinds.

“I am pleased to say that the business has enhanced its foundations for sustainable and profitable growth including significantly strengthening compliance, refining its approach to marketing investment, and increasing its focus on recreational customers.”

Following an overhaul of corporate leadership, Widerström leads a new executive team formed of Sean Wilkins (CFO), Vaughan Lewis (CSO), Rik Barker (CIO), Ian Gallagher (CPO), and Jeffrey Haas (CGO).

The new executive team will prioritise achieving the elevated target of generating “£150 million in synergy target savings to be delivered in 2024,” to help mitigate the impact of regulatory and compliance changes.

Initial directives saw 888 launch a ‘Global Cost Savings’ programme of approximately £30 million initiated in December 2023. Group accounts detail that as of December 2023, 888 had access to approximately £125 million in cash, together with an undrawn Revolving Credit Facility (RCF) of £150 million, providing total liquidity of approximately £275 million.

Of significance, 888 expects Compliance and Safer Gambling adjustments to annualise in February 2024, leading to a more positive outlook for average revenue per user.

2024 trading will focus on returning the UK online and international segments to growth, for which the leadership will reserve cost savings to support an increase in marketing spend in 2024, with superior returns supported by a more effective customer and product lifecycle management plan.

888’s new executive team will disclose the firm’s new strategic plans and medium to long-term financial targets, at the LSE firm’s publishing of FY2023 accounts on 26 March 2024.

Widerström declared: “The financial performance of the Group must improve, and the actions we are taking will build a leaner, more agile, and more effective organisation structure, as well as establishing a more effective management of the customer and product lifecycle. These plans support material value creation and significantly higher profits over the coming years.

“I have been working hard with the Board, our strengthened executive team, and the talented people across the business to refine our strategic framework, which is being translated into a value creation plan, and I am confident that we are poised to deliver deleveraging and strong shareholder returns in the coming years. I am looking forward to outlining our 2024-2026 plan alongside our full-year results in late March.”