888 Holdings sees revenue drop 7% in Q3
888 Holdings said on Tuesday its third-quarter revenue fell due to the country’s tightened online player safety measures and closure of its Dutch operations.
Revenue in the reported period fell 7% to 449 million pounds ($509.48 million) from year-ago figures, the group said, adding that adjusted core earnings in the quarter improved from the first half of the year.
Total online revenue of £325m, down 10% year over year, principally reflecting the impact of UK player safety measures and the closure of the Netherlands. Online revenue excluding UK and Netherlands flat year over year
UK Online player safety measures: Total UK online revenue of £171m, down 13% year over year driven by a reduction in average spend per player, which was down 14% year over year following the introduction of more stringent measures through Q3 and Q4 of the prior year.
Netherlands closure: Year over year impact only, with the Netherlands representing 4% and 6% of Q3 2021 revenue for 888 and William Hill International respectively.
Sporting calendar: Sportsbook staking impacted on a year over year basis as a result of the Euro 2020 tournament taking place in the prior year period, together with racing cancellations because of the UK heatwave in Q3 2022. Sequential reduction in online revenues driven by normal seasonality, particularly July with no major football leagues playing, together with the aforementioned impacts of racing cancellations and sporting fixture cancellations / postponements during the period of national mourning.
The Group has made strong early progress with realising synergies, creating a more efficient operating cost base during the Period and helping to deliver an improved Adjusted EBITDA margin in Q3 2022 versus H1 2022, with further improvement expected in Q4, with the primary focus of the business on integration, execution and deleverage.
Itai Pazner, CEO of 888, commented: “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. 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.
Revenues during the third quarter continued the trends we have seen in recent quarters, with relatively resilient trading across our main international markets and in our retail estate, but continued pressure on our UK online revenues in light of the ongoing impact of the enhanced player safety measures. We are changing the mix of our business to a lower spending, more recreational player base that gives us confidence in the long-term potential for our UK business.
As we look forward, we remain focused primarily on successful integration, execution and de-leveraging in order to unlock the huge potential from our enlarged business.
We are building a stronger group that will leverage our leading technologies and portfolio of world-class brands to create a leading global betting and gaming company, with clear plans to grow.