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New CEO Per Widerström has recognised “positive momentum” and a “foundation for profitable growth” after 888 reported a 10% year-on-year revenue decline to £405m for Q3 2023.

Back in September, the company had already warned investors about its mixed performance for Q3 2023, specifically flagging a 10% decrease in revenue. 

In an official trading update posted today (18 October), 888 explained that the current trends and factors impacting year-on-year performance aligned with that earlier warning.

The operator highlighted it is actively working on enhancing the “sustainability and quality” of its business mix, which is currently influencing short-term performance.

Divisional performance

The online segment in the UK and Ireland experienced a 10% decrease in revenue, amounting to £157.2m.

This decline was attributed to shifts in safer gambling practices, a more refined marketing strategy, and lower-than-expected net win margins from betting, especially across UK football results in September. 

Despite the dip, the company reported robust customer engagement, with average monthly active users increasing by 17%.

In contrast, the retail division experienced a more favourable trend, with flat year-on-year revenue growth of 1% to £125.6m.

This growth was primarily driven by investments in self-service betting terminals (SSBTs) and gaming cabinets. However, the positive performance was partly offset by customer-friendly sports results.

888’s International division faced a significant challenge, meanwhile, with a 19% year-on-year decrease in revenue to £122.2m. 

This decline was linked to ongoing compliance changes in dot com markets, particularly in the Middle East.

The impact of these changes has resulted in a slower recovery in revenue and customer activity compared to initial expectations.

On a more positive note, 888 highlighted the success of its synergy and cost-saving efforts.

These initiatives have aided in mitigating the effects of regulatory and compliance changes, demonstrating the company’s commitment to adapting to an evolving industry landscape.

In terms of integration and development, the company seamlessly incorporated Section8’s in-house games into William Hill’s online platform. 

Additionally, 888 has begun integrating William Hill’s proprietary global trading platform into its in-house platform, enabling certain sports to be traded across the entire group via a single trading engine.

CEO comment

CEO Widerström, who assumed office earlier this week, 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 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,” he added.

The company also underscored its commitment to the safety and well-being of its more than 500 colleagues in Israel in response to recent conflict in the country.

888 activated its business continuity plans, and operations are expected to remain largely unaffected.

Outlook

In the initial three quarters of 2023, 888 recorded revenue of £1.3bn, marking an 8% decrease compared to the same period in 2022.

Looking ahead, 888 maintained its expectations for Q4, anticipating a mid-single-digit decline in revenue. 

Furthermore, the group projects a full-year adjusted EBITDA margin in the range of 18% to 19%.

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