Israel.- 19th October 2023 www.zonadeazar.com The new CEO of 888, Per Widerström, has emphasized an immediate focus on unlocking the company’s full potential, with “several areas” of its operations showing clear signs of needing necessary improvements.
These comments come amid a third-quarter trading update that confirms recent remarks from the operator that the three-month period has fallen below expectations.
Financial declines are the story of Q3. Revenue from July to September dropped by ten percentage points to £405 million (2022: £449.4 million), which is attributed to “significant and ongoing improvements being made to sustainability” and the quality of the business mix impacting performance.
Gaming took the lion’s share of this figure with £262.4 million (2022: £290.4 million), with betting also trailing year-on-year after declining from £142.6 million (2022: £159 million). Both are down by 10 percent.
The group’s UK and Ireland online reporting segment also reported a 10 percent decline to £157.2 million (2022: £174.4 million). However, 888 did highlight “continued strong customer engagement” as monthly active customers increased by 17 percent.
Gaming and betting declined by five percent and 17 percent, respectively, with the latter driven by a lower-than-expected betting net win margin from customer-friendly sports results through September. The ongoing impact and safer gambling alterations and a “refined marketing approach” were also detailed by the company.
Retail bucked the trends to document a one percent increase to £125.6 million (2022: £124.1 million), with an improved product offering offset by the aforementioned sporting outcomes. Betting remained consistent year-on-year, while gaming secured a narrow two percent uptick.
On an international basis, plummeting figures of 19 percent and 23 percent across betting and gaming saw overall revenue decline by 19 percent. Active monthly actives followed suit, with a two percent decrease felt.
This, the company said, is due to the impact of compliance changes in dotcom markets, with the Middle East cited once again by the firm, as well as a slower recovery in revenue and customer activity than initially anticipated.
Year-to-date & future expectations
For the year-to-date, revenue is down eight percentage points to £1.28 billion (2022: £1.39 billion), with betting and gaming falling by one percent and 11 percent, respectively.
The UK&I online and international segments declined by ten percent and 16 percent to £493 million (2022: £545.2 million) and £388.5 million (2022: £495.8 million), while retail again stood out with a five percent increase to £405.1 million (2022: £387.6 million).
In addition, 888 reiterated a stance that was delivered to the market one month ago, with no change to future expectations being expressed.
This would see revenue through the final quarter of the year being down to the mid-single digits, with full-year adjusted EBITDA margin being anticipated as between 18 percent and 19 percent.
In addition, Executive Chair Lord Mendelsohn has also expressed that “good levels of expected growth” during 2024 would accelerate progress toward a target of £2 billion of revenue in 2025.
Thoughts of the CEO
“I am very excited to have joined the 888 group as the new CEO,” Widerström commented. “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 maximize value creation.”