888 Holdings, a key player in the online gambling industry, has released its trading update for the three and twelve months ending December 31, 2023, providing a comprehensive overview of its strategic achievements and financial performance during the period.
In the fourth quarter of 2023, 888 Holdings reported a revenue of £424 million ($537 million), marking a 7% year-on-year decrease but a 5% increase from the previous quarter. The full-year revenue for FY23 amounted to £1.71 billion, witnessing an 8% annual decline. This dip is attributed to a purposeful shift away from dot-com markets, adjustments in safer gambling measures, and a strategic change in marketing focus.
Around 95% of the full-year revenue for 2023 originated from regulated and taxed markets, highlighting the company’s commitment to operating in compliant and responsible environments.
In terms of segment-wise performance, the UK online sector faced an 8% decline in revenue, amounting to £658 million, attributed to safer gambling adjustments and refined marketing strategies. Despite this, ongoing customer engagement and efficient marketing efforts contributed to a higher adjusted EBITDA for this segment.
Retail on the other hand, experienced a positive trajectory with a 3% revenue increase, reaching £535 million, driven by strategic investments in gaming cabinets and expanded product offerings.
On the international front, the segment encountered a 16% decrease in revenue, totaling £517 million, primarily influenced by compliance changes in dotcom markets. Nevertheless, noteworthy growth was observed in core markets such as Italy and Spain.
As for operational highlights, the company achieved its targeted £150 million synergy savings in 2024, indicating the “successful execution of synergies.” The executive team also underwent key appointments, fortifying leadership with skilled professionals including CFO Sean Wilkins, Chief Information Technology Officer Rik Barker, CPO Ian Gallagher, Group General Counsel Fredrik Ekdahl and CGO Jeffrey Haas.
With an optimistic outlook for fiscal year 2024 revenue, 888 Holdings foresees an increase in active players and enhanced average revenue per user, driven by the annualization of compliance and safer gambling impacts. In December 2023, the company launched a comprehensive global cost-saving initiative, allocating around £30 million to invest in core capabilities like intelligent automation and AI-powered data insights.
CEO Per Widerström is poised to reveal refined strategic plans and introduce new medium-term financial targets during the full-year results announcement scheduled for March 2024.
888 Holdings achieved a revenue of £881.6 million during the first half of 2023, reflecting an impressive 165% year-over-year increase. The gross profit also surged to £590 million, marking a substantial leap from £215.9 million in the first half of 2022.
In the summer of 2023, DraftKings initiated preliminary discussions regarding a potential acquisition of 888 Holdings, contemplating an all-stock offer that would value 888 at a premium to its market capitalization.
Despite these strategic moves, the share prices at 888 Holdings have tumbled, experiencing a staggering 20% drop since the financial update was released, raising questions about market sentiment and investor confidence in the company’s future trajectory. The current share price stands at £0.69, a stark contrast from the peak of £4.58 in September 2021. The company remains resilient amid industry shifts and regulatory considerations, preparing for a dynamic year ahead.
