TIDM888
RNS Number : 9156Z
888 Holdings plc
17 January 2024
17 January 2024
888 Holdings Plc
("888" or "the Group")
2023 Post-close Trading Update
Important strategic and operational progress in FY23 setting the
foundations for medium term value creation plan
888 (LSE: 888), one of the world's leading betting and gaming
companies with internationally renowned brands including William
Hill, 888 and Mr Green, today announces a post-close trading update
for the three and 12 months ending 31 December 2023 ("Q4" and
"FY23" respectively).
Unaudited(1) Three months ended December Year ended December
GBP millions Q4 2023 Q4 2022 YoY% FY23 FY22(2) YoY%
--------------- --------- ----------- ------------ ------- ---------- ------------
UK Online 165 172 -4% 658 717 -8%
Retail 130 131 -1% 535 519 +3%
International 129 154 -16% 517 614 -16%
--------------- --------- ----------- ------------ ------- ---------- ------------
Total Revenue 424 457 -7% 1,711 1,850 -8%
--------------- --------- ----------- ------------ ------- ---------- ------------
Highlights
-- Q4 revenue of GBP424m, 5% higher than Q3 2023 and down 7%
year-over-year, with actives(3) up 5% year-over-year, with ongoing
growth in the customer base setting the foundation for sustainable
future revenue growth.
-- FY23 revenue of GBP1,711m, down 8% year-over-year driven
primarily by a proactive mix shift away from dotcom markets, which
impacted revenues by approximately GBP80m 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 GBP658m, 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 GBP535m 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 GBP517m (-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.
-- Successful execution of synergies with the full, previously
increased and accelerated, GBP150m synergy target savings to be
delivered in 2024, helping to partly mitigate the impact of
regulatory and compliance changes.
-- The Group now expects Adjusted EBITDA Margin for FY23 to be
approximately 18%, consistent with the previously indicated range
of 18-19%.
-- Cash (excluding customer balances) as at 31 December 2023 of
approximately GBP125m, together with undrawn RCF of GBP150m, giving
total liquidity of approximately GBP275m.
Strengthened Executive Team
-- Over the course of 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 to the role of CFO, and will take up his appointment on
February 1, 2024. Vaughan Lewis will continue his role as Chief
Strategy Officer, having also been acting as interim CFO since
October 2023.
-- Rik Barker has been appointed as Chief Information Technology
Officer, and will take up his role on February 5, 2024. Rik has
nearly 30 years' experience in cutting edge technology, and has
previously been CIO for Flutter UK&I and Chief Technology
Officer for Sky Betting & Gaming.
-- Ian Gallagher was appointed as Chief Product Officer in
December 2023. Ian has 15 years' experience in betting and gaming
product development, and was previously Product Director for
Flutter UK&I.
-- Fredrik Ekdahl was appointed as Group General Counsel in
October 2023. Fredrik has over 30 years legal experience, with
nearly 20 years of betting and gaming industry experience having
previously held senior roles at PokerStars and Expekt.
-- Jeffrey Haas was appointed as Chief Growth Officer in January
2024. Jeffrey has more than 20 years' experience in gaming and
fintech startups and scale-ups, held senior roles for DraftKings,
bwin.party and PokerStars, and has served as a strategic innovation
advisor, executive and board member to VC-backed companies.
Outlook
-- Positive outlook for FY24 revenue with consistent growth in
active players driving confidence in strong revenue growth online
in both the UK and International segments. Compliance and safer
gambling impacts begin to annualise in February 2024, leading to a
more positive outlook for average revenue per user.
-- Global cost savings programme of approximately GBP30 million
initiated in December 2023, alongside investment in further
strengthening the Group's core capabilities in several areas such
as intelligent automation and AI-powered data and insights.
-- Cost savings to support an increase in marketing spend in
2024, with superior returns supported by a more effective customer
and product lifecycle management plan.
-- The above initiatives will enhance long-term profitability,
but the additional investment means the Group currently expects
2024 Adjusted EBITDA to be at the low end of consensus range(5)
.
-- Under its new CEO Per Widerström, the Group intends to
provide details on its evolved strategic and value creation plans,
including new medium-term financial and strategic targets, at its
full year results, which are expected to be released on 26 March
2024.
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."
Notes
(1) Note all numbers in this statement are unaudited. Totals and
percentage changes have been calculated based on the underlying
numbers. Any differences due to rounding.
(2) FY22 is pro-forma as if 888 had owned William Hill for the
entire period (acquisition completed 1 July 2022) and excludes the
888 bingo business (sold in July 2022).
(3) Actives represents average monthly online actives, being any
player who has wagered a stake during the relevant period.
(4) Constant currency growth is calculated by retranslating the
non-sterling denominated component of prior year revenues at
current year exchange rates
(5) Analyst consensus is available on the Group's website here
https://corporate.888.com/investors/shareholder-information/analyst-consensus/
. The consensus range for FY24 Adjusted EBITDA as of the date of
this release was GBP340-397m.
This announcement contains inside information.
Enquiries and further information:
888 Holdings Plc +44(0) 800 029 3050
Per Widerström, CEO
Vaughan Lewis, Interim CFO and Chief Strategy Officer
Investor Relations ir@888holdings.com
James Finney, Director of IR
Media 888williamhill@hudsonsandler.com
Hudson Sandler
Alex Brennan / Charlotte Cobb / Andy Richards +44(0) 207 796 4133
About 888 Holdings Plc:
888 Holdings plc (and together with its subsidiaries, "888" or
the "Group") is one of the world's leading betting and gaming
companies. The Group owns and operates internationally renowned
brands including William Hill, 888, and Mr Green. In addition, the
Group operates the SI Sportsbook and SI Casino brands in the US in
partnership with Authentic Brands Group.
Incorporated in Gibraltar, and headquartered and listed in
London, the Group operates from offices around the world and
employs over 11,000 people globally.
The Group's mission is to lead the gambling world in creating
the best betting and gaming experiences, bringing unrivalled
moments of excitement to people's day-to-day lives. It achieves
this by developing state-of-the-art technology and content-rich
products that provide fun, fair, and safe betting and gaming
entertainment to customers worldwide.
Find out more at:
http://corporate.888.com/
Important Notices
This announcement may contain certain forward-looking
statements, beliefs or opinions, with respect to the financial
condition, results of operations and business of 888. These
statements, which contain the words "anticipate", "believe",
"intend", "estimate", "expect", "may", "will", "seek", "continue",
"aim", "target", "projected", "plan", "goal", "achieve", words of
similar meaning or other forward looking statements, reflect 888's
beliefs and expectations and are based on numerous assumptions
regarding 888's present and future business strategies and the
environment 888 will operate in and are subject to risks and
uncertainties that may cause actual results to differ materially.
No representation is made that any of these statements or forecasts
will come to pass or that any forecast results will be achieved.
Forward-looking statements involve inherent known and unknown
risks, uncertainties and contingencies because they relate to
events and depend on circumstances that may or may not occur in the
future and may cause the actual results, performance or
achievements of 888 to be materially different from those expressed
or implied by such forward looking statements. Many of these risks
and uncertainties relate to factors that are beyond 888's ability
to control or estimate precisely, such as future market conditions,
currency fluctuations, the behaviour of other market participants,
the actions of regulators and other factors such as 888's ability
to continue to obtain financing to meet its liquidity needs,
changes in the political, social and regulatory framework in which
888 operates or in economic or technological trends or conditions.
Past performance of 888 cannot be relied on as a guide to future
performance. As a result, you are cautioned not to place undue
reliance on such forward-looking statements. The list above is not
exhaustive and there are other factors that may cause 888's actual
results to differ materially from the forward-looking statements
contained in this announcement. Forward-looking statements speak
only as of their date and 888, its respective parent and subsidiary
undertakings, the subsidiary undertakings of such parent
undertakings, and any of such person's respective directors,
officers, employees, agents, affiliates or advisers expressly
disclaim any obligation to supplement, amend, update or revise any
of the forward-looking statements made herein, except where it
would be required to do so under applicable law. No statement in
this announcement is intended as a profit forecast or a profit
estimate and no statement in this announcement should be
interpreted to mean that the financial performance of 888 for the
current or future financial years would necessarily match or exceed
the historical published for 888
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