888 posts Q3 revenue slump hit by UK affairs

888 Holdings has notified investors that its KPI performance remains consistent with corporate expectations, as the LSE gambling group reported a 10% decline in Q3 revenues to £405m (Q3 2022: £450m).

 As anticipated by the firm’s September update, Q3 trading saw group performance dragged by ongoing safer gambling compliance changes and a refined marketing approach, impacting the performance of its UK-&-Ireland online gambling unit.

 Despite registering a 17% increase in active monthly customers to 1.18m, the firm’s UK-&-IRE unit recorded a 10% slump in revenues to £157m (Q3 2022: £174m). 

Compounding Q3 results, 888 detailed that period trading had been further impacted by “customer friendly football results in September” as UK-&-IRE sportsbook revenues fell by 17% to £55m (Q3 2022: £66m). 

Period trading saw the firm’s William Hill retail business match its like-for-like Q3 revenue performance of £125m – as 888 continues to invest in William Hill in-store SSBTs and gaming cabinets.  

Concerns were highlighted on a ‘slower than anticipated’ recovery for 888’s International Unit which reported a 19% downturn in revenues to £122m (Q3 2022: £151m) – declines corresponding to “compliance changes in dotcom markets, in particular the Middle East”.

On a year-to-date basis, the LSE firm tracked an  8% revenue fall to £1.28bn from £1.39bn in FY2022. As reported, YTD results see 888 anticipate a 1% revenue decline in sportsbook results and 11% for online gambling   

UK&I online and international segments registered corresponding reductions of 10% and 16% in revenues of £493m (YTD2022: £545m) and £388m (YTD2022: £496m).   

Offsetting online declines, William Hill’s retail business tracked a 5% increase in YTD revenues to £405.1m from £387m recorded in 2022. 888 has reaffirmed its previous market outlook from a month ago, predicting that Q4 revenues will likely decrease to mid-single digits. 

Company Chairman Lord Mendelsohn also shared optimism, highlighting anticipated “good levels of growth” in 2024. This positive momentum is expected to steer the company towards its goal of achieving £2bn in revenue by 2025.

The update saw Per Widerström provide his first official statement as Group CEO in which he said:  “I am very excited to have joined the 888 Group as the new CEO. 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 am 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.”