888 , one of the world's leading betting and gaming companies with internationally renowned brands including William Hill, 888 e Mr Green, today announces a post-closing trading update for the three and twelve months ending December 31, 2023
888 confirmed there will be redundancies as part of changes to its organizational structure, while the operator reported an 8% year-on-year drop in revenue for the 2023 financial year to £1,71 billion.
Q424 revenue was £5 million, 2023% higher than Q7 5 and down XNUMX% year-on-year, with assets growing XNUMX% year-on-year, with continued growth in the customer base which lays the foundation for future sustainable revenue growth.
FY23 Revenue of £1.711m, down 8% year-on-year, driven primarily by a proactive mix shift away from dotcom markets, impacting revenue by approximately £80m during fiscal 2023. Revenue have been further impacted by changes in the customer mix in the UK as a result of further safer gambling measures, together with the Group's change in marketing approach to focus more on sustainable revenues and profitability. Together, these changes have created a higher quality and more sustainable business mix, including approximately 95% of FY23 revenues generated from regulated and taxed markets.
·UK Online: Revenue -8% to £658m, driven primarily by the impact of changes in safer gambling and a refined marketing approach, with strong customer engagement (average monthly assets +11%) more which was offset by the -18% reduction in average revenues per customer. The realization of synergies and a focus on efficient marketing mean that adjusted EBITDA for Online will be significantly higher year-on-year, despite the reduction in revenue.
· Retail: Revenues +3% to £535m with strong underlying performance driven by improved product offering through investment in gaming cabinets, which more than offset a 3% reduction in asset size during the year.
· International: Revenue -16% to £517m (-17% in constant currency 4 ) with significant impact from compliance changes in dotcom markets. Core markets of Italy and Spain both grew by double digits.
· The Group now expects adjusted EBITDA margin for FY23 to be approximately 18%, in line with the previously indicated range of 18-19%.
· Over the last 3 months, the group has significantly strengthened its management team, including the following key appointments to the executive management team:
· As announced on September 13, 2023, Sean Wilkins has been appointed CFO and will assume the role on February 1, 2024. Vaughan Lewis will continue in his role as Chief Strategy Officer, having also served as Interim CFO since October 2023.
· Rik Barker has been appointed Chief Information Technology Officer and will take up his role on 5 February 2024. Rik has almost 30 years of experience in cutting-edge technology and was previously CIO for Flutter UK&I and Chief Technology Officer for Sky Betting and Gaming .
· Ian Gallagher has been appointed Chief Product Officer in December 2023. Ian has 15 years of experience in betting and gaming product development and was previously Product Director for Flutter UK&I.
· Fredrik Ekdahl was appointed Group General Counsel in October 2023. Fredrik has over 30 years of legal experience, with nearly 20 years of experience in the betting and gaming industry having previously held senior roles at PokerStars and Expekt.
· Jeffrey Haas was named Chief Growth Officer in January 2024. Jeffrey has more than 20 years of experience in gaming and fintech startups and scale-ups, has held senior roles at DraftKings, bwin.party and PokerStars, and has been an innovator strategic consultant, executive and board member of VC-backed companies.
· Positive outlook for FY24 revenues, with continued growth in active players fueling confidence in strong online revenue growth in UK and international segments. Impacts on compliance and safer gambling begin to annualize in February 2024, leading to a more positive outlook for average revenue per user.
· Global cost savings program of approximately £30 million launched in December 2023, alongside investments to further strengthen the Group's core capabilities in several areas such as intelligent automation and AI-driven data and insights.
· Cost savings to support increased marketing spend in 2024, with superior returns supported by a more effective customer and product lifecycle management plan.
· The above initiatives will improve long-term profitability, but the additional investments mean that the Group currently expects 2024 adjusted EBITDA to be at the low end of the consensus range.
· Under the leadership of new CEO Per Widerström, the Group intends to provide details of its evolved strategic and value creation plans, including new medium-term financial and strategic objectives, at the time of the full-year results, which are expected to be published on March 26, 2024.
Per Widerström, CEO of 888, commented:
“In fiscal 2023 the Group made important strategic and operational progress despite some significant regulatory and compliance hurdles. I am pleased to say that the company has strengthened its foundation for sustainable and profitable growth, including significantly strengthening compliance and refining its approach to marketing investments and increasing its focus on recreational customers.
I joined the company at an exciting and important time. There are clear opportunities to unlock our significant potential, but as a company we know that in the future we will need to be more proactive in adapting to regulatory and technological changes. We are now taking rapid action to position the Group for future success by reducing overhead costs and freeing up funds to invest in growth based on our new strategy and value creation plan. The Group's financial performance must improve and the actions we are taking will build a leaner, more agile and more effective organizational structure, as well as establishing more effective customer and product lifecycle management. These plans support the creation of material value and significantly higher profits in the coming years.
I have worked hard with the Board, our strengthened executive team and talented people across the company to refine our strategic framework, which is translating into a value creation plan, and I am confident that we are ready to ensure a reduction in debt and a strong shareholder base. returns in the next few years. I look forward to outlining our 2024-2026 plan alongside full-year results at the end of March.”
