888 3Q22 revenue drops 7% on U.K. regulation, Netherlands closure

Content Team 1 year ago
888 3Q22 revenue drops 7% on U.K. regulation, Netherlands closure

888 Holdings said its 3Q22 revenue fell 7 percent due to tighter player protection measures in the U.K. and the closure of its business in the Netherlands.

The owner of brands such as William Hill and Mr Green, said total revenue for the period ending Sept. 30th was GBP449 million ($509.2 million). The stock fell almost 4 percent in early trading following the update. 

The group said its total online revenue fell 10 percent to GBP325 million, while retail revenue was stable at GBP124 million. There was a GBP4 million impact from a three-day closure and from sporting fixture cancellations following the death of Queen Elizabeth II.

Taking out the U.K. and the Netherlands, 888 said that online revenue was flat. 

Business was hit in the U.K. by the introduction of more stringent measures introduced in the final two quarters of last year. U.K. online revenue was down 13 percent, driven by a reduction of 14 percent in average spend per player. 

888 sees higher 4Q22

Going forward, 888 said it expects Q422 revenue to be higher than 3Q22 and in line with those of the same quarter last year, despite more challenging macroeconomic conditions. 

888 completed the GBP1.95 billion acquisition of the non-U.S. business of William Hill on July 1st and the figures released on Tuesday reflect the pro-forma results as if it had owned William Hill for the same prior-year periods. 

The company said that it has made “strong progress” with the integration and is seeing synergies and cost savings from its initial action. It is also taking steps to mitigate the increased cost of debt as interest rates rise. 

It has made hedging arrangements, which mean that about 35 percent of interest costs are fixed. It said about 36 percent of its debt is in GDB and 8 percent in USD, with 56 percent in euros. 

Rapid integration progress

“Having completed our transformational combination with William Hill, I am pleased to report that during Q3 our teams continued to make rapid progress in integrating these two market-leading and highly complementary businesses,” CEO Itai Pazner said. “This has enabled us to progress towards our new target operating model, while delivering a series of ‘quick win’ synergies, that will benefit our adjusted EBITDA margin for the second half of this year.

The group has said it’s targeting GBP 100 million in synergies to be fully delivered by 2025.

Revenues during the third quarter continued the trends seen in recent quarters, with relatively resilient trading across the main international markets and in retail estate, Pazner said, adding there is continued pressure on UK online revenues in light of the ongoing impact of the enhanced player safety measures.

Itai said 888 is changing its business mix to a lower spending, more recreational player base.

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