888 shares slump after Q4 results
888 Holdings Q4 revenue was £424m, 5% higher than Q3 2023 and down 7% year-over-year, with actives up 5% year-over-year, with ongoing growth in the customer base setting the foundation for sustainable future revenue growth.
FY23 revenue of £1,711m, down 8% year-over-year driven primarily by a proactive mix shift away from dotcom markets, which impacted revenues by approximately £80m during FY23.
Revenue was further impacted by customer mix changes in the UK as a result of additional safer gambling measures, alongside the change in the Group’s marketing approach to focus more on sustainable revenue and profitability.
Together, these changes have created a higher quality and more sustainable business mix, including approximately 95% of FY23 revenue being generated from regulated and taxed markets.
UK&I Online: Revenue -8% to £658m, primarily driven by the impact of safer gambling changes and a refined marketing approach, with strong customer engagement (average monthly actives +11%) more than offset by the -18% reduction in average revenue per customer. Synergy delivery and focus on efficient marketing means Adjusted EBITDA for UK&I Online will be significantly higher year over year, despite the reduction in revenue.
Retail: Revenue +3% to £535m with strong underlying performance driven by improved product offering through investment in SSBTs and gaming cabinets, more than offsetting a 3% reduction in the estate size during the year. International: Revenue -16% to £517m (-17% in constant currency4) with significant impact from compliance changes in dotcom markets. Core markets of Italy and Spain both grew by double digits.
Per Widerström, CEO of 888, commented: “In FY23 the Group made important strategic and operational progress in the face of some significant regulatory and compliance headwinds. I am pleased to say that the business has enhanced its foundations for sustainable and profitable growth including significantly strengthening compliance, refining its approach to marketing investment, and increasing its focus on recreational customers.
I have joined the business at both an exciting and important time. There are clear opportunities to unlock our significant potential, but as a business we know that going forward we must be more proactive in adapting to changes in regulation and technology. We are now taking rapid actions to position the Group for future success, reducing our overhead costs and freeing up funds to invest in growth based upon our new strategy and value creation plan. The financial performance of the Group must improve, and the actions we are taking will build a leaner, more agile, and more effective organisation structure, as well as establishing a more effective management of the customer and product life cycle. These plans support material value creation and significantly higher profits over the coming years.
I have been working hard with the Board, our strengthened executive team, and the talented people across the business to refine our strategic framework, which is being translated into a value creation plan, and am confident that we are poised to deliver deleveraging and strong shareholder returns in the coming years. I am looking forward to outlining our 2024-2026 plan alongside our full year results in late March.”