888 H1 2022 revenue slumps 13% as UK and European headwinds continue

888 has reported a 13% year-on-year (YoY) decline in its H1 2022 total revenue, which slumped to £332.1m during the first half of the year.

Delivering its financial results for the period, the London-listed operator confirmed an adjusted EBITDA figure of £50m during H1, a figure down 29% YoY. 888’s profits before tax also dropped by double-digits during H1, falling 66% YoY to £14.4m.

In respect of its group revenue decline, 888 said that while the majority of its business saw “relatively stable” revenue during H1, a 25% decline in UK revenue due to safer gambling and the closure of the group’s Dutch operations were key factors in the 13% drop.

888 suggested adjusted EBITDA margins were lower than expected during H1 2022 due to continued investment in its US Sports Illustrated (SI) Sportsbook state launches, as well as additional compliance-related costs.

At a divisional level, 888 reported a 13% YoY decline in its B2C total revenue to £317.1m, punctuated by a 40% decline in sports betting revenue and an 8% drop in online gaming revenue.

In contrast, 888’s B2B revenue increased by 8% YoY during H1 2022 to £15m.

The FTSE 250 firm has said that 47% of its active UK players have active limits on their respective accounts, with the firm implementing lower affordability thresholds across its portfolio.

The operator’s EMEA revenue, excluding the Italian market, fell 5% YoY due to the Netherlands closure, as well as increased restrictions in Spain and Germany, changes which offset strong performance in the Romanian market during H1.

Italian revenue declined by 5% year over year, primarily as a result of a strong comparative period where Covid-related restrictions enforced the closure of retail venues, driving online migration.

888 has hailed an increase in its Italian market share during H1, growth coming despite the traditionally stronger retail sector.

Americas revenue fell by 1% during H1 to £46.6m, despite a 29% increase in US revenue arising from 888’s World Series of Poker (WSOP) partnership.

B2C revenue in the US declined 4%, with growth in casino offset by investment in promotional activity to support the launch of the SI Sportsbook in Colorado and Virginia.

Outside of the US, Americas revenue was down 7%, primarily driven by an increase in promotional investment to support the launch of Ontario on a locally regulated basis from April 2022.

H1 saw the completion of 888’s £2bn acquisition of UK bookmaker William Hill, a move which gives the group a retail footprint across the UK for the first time in its history.

888 CEO Itai Pazner highlighted the “transformational” deal in his remarks surrounding the H1 results, citing the complimentary nature of the William Hill offering in 888’s ongoing plans into H2.

Pazner also lifted the lid on the poorer-than-expected UK performance during the period, suggesting it reflected prevailing market conditions.

“We believe the proactive actions we have taken to increase player protections and drive higher standards of player safety have put the group in an even stronger position for the future,” Pazner said.

“In the second half of 2022, our main focus is on integration, delivering on our synergy plans and driving higher profitability across the business.

“This focus on integration, execution and de-leverage will unlock the huge potential from the enlarged business.

“These actions will position us to take advantage of significant growth opportunities ahead of us, as we leverage our leading technologies to create a best-in-class global betting and gaming platform, and our portfolio of world-class brands, to grow market share and profitability in some of the most attractive markets in the world,” the 888 CEO added.

888 Holdings’ share price dropped by 14% in early trading on the London Stock Exchange following the H1 results, trading at a price of £137.18p per share.