888 praises William Hill performance but group pro forma revenue slips

888 has reaped the rewards of its acquisition of William Hill International after H1 revenue jumped 165% year on year (YoY).

The London-listed firm confirmed revenue for the first six months of the year of £881.6m compared to £332.1m in H1 2022.

Similarly, H1 EBITDA also skyrocketed, leaping 211% YoY to £155.6m from a previous result of £50m.

However, 888 did note that on a pro forma basis, revenue slipped 7% as retail gains moved to slightly fight back against an 11% decline in online revenue.

On a pro forma basis, UK and Ireland online revenue fell 9% despite active customers increasing 10% and EBITDA rising 22%.

888 said the lower revenue reflected the group’s ongoing efforts to implement proactive player safety measures, including a reduction in slot stake limits and reduced marketing spend.

In the international online division, revenue fell 14% and EBITDA dropped 25% on a pro forma basis. 888 said this was primarily due to implementing compliance changes in certain dotcom markets and a robust new governance framework.

The operator added it had seen a “slower than expected recovery” from its operations in the Middle East following the earlier VIP issues this year. 888 confirmed it had since agreed a £2.9m settlement with the Gibraltar regulator relating to the issues in the region.

Elsewhere, pro forma EBITDA increased 9% YoY from £142.5m to £155.6m. 888 said this was driven by £54m of operating cost synergies. EBITDA margin increased from 15.1% to 17.7%.

While there were improvements in EBITDA, 888’s adjusted profit after tax fell 63% from £31.9m to £11.8m, which was noted as being a result of increased interest costs following the Hills acquisition.

Coupled with this, there was a reported post-tax loss of £32.5m, once again driven by increased interest costs as well as certain one-off costs relating to the acquisition and subsequent synergies.

888 said it had already accelerated its synergy delivery with £66m in cash delivered in H1, with a full £150m target now expected to be achieved in 2024, a year ahead of schedule.

Looking ahead, the operator detailed its five core priorities moving forward. The first related to the quick realisation of synergies from the Hills acquisition.

The firm is also aiming for double-digit growth in Italy and Spain, while also putting more focus into its 888AFRICA JV.

The group confirmed a brand consolidation strategy per market, including a focus on Mr Green in Germany and SI Casino in the US.

888 will continue to focus on its ESG efforts and will also push ahead with its debt reduction priorities.

Lord Mendelsohn, 888 executive chair, said: “I am very pleased with the progress we have made in the first half of the year as the group delivered against the plans we committed to at our investor day last year, while also successfully navigating business, market and regulatory volatility.

“We made very strong progress with the execution of our integration plan and we now expect to realise the full £150m of synergies in 2024, a year earlier than the original plan.

“Our strong cash discipline and higher profits also enabled a 0.5x reduction in our leverage. We have successfully delivered against our focused market strategy, changing the mix of our revenue and creating a more profitable and sustainable platform for future growth.”

Lord Mendelsohn also took the opportunity to touch on incoming CEO Per Widerström and what he will bring to the company.

The executive chair continued: “I was thrilled to be able to announce the appointment of Per Widerström as our next CEO. Over the coming weeks I will be working closely with Per to ensure a smooth handover, and I am highly confident in his ability to lead the team to realise the full potential of this business.

“The strategic progress made during the year to date has created a fundamentally stronger business with higher profit margins and we remain on track to deliver against expectations for the full year.”