Update on current trading and FY23 guidance

888 Holdings plc

28 September 2023

 

28 September 2023

888 Holdings Plc

("888" or "the Group")

Update on current trading and FY23 guidance

Ongoing improvements to the sustainability and quality of revenues impacting short-term performance while synergy delivery remains on track and the Group is focused on delivering future growth

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 an update on current trading and FY23 guidance.

Current trading commentary

Performance across the Group has been mixed, with overall revenue for Q3 2023 expected to be down around 10% to approximately £400m. The Group has made significant and ongoing improvements to the sustainability and quality of the mix of the business, and while this is weighing on short-term performance, the Group continues to drive strong double digit active customer growth. The main drivers of the year-over-year revenue decline include:

·    Ongoing significant impact from compliance changes implemented in dotcom markets, with slower recovery in customer activity and revenues than initially anticipated

·    Customer friendly sports results impacting win margin across both UK and International markets in September

·    The ongoing impact of safer gambling changes within the UK, with trends consistent with prior commentary, with strong growth in active customers supporting a return to revenue growth in 2024

·    A short-term impact from the change in marketing approach to focus on higher return marketing and in line with the Group's clear market focus strategy and refined brand-led marketing approach

Retail continues to perform strongly, with broadly stable revenues relative to last year despite customer friendly sports results, and no change to the expectation of mid-single digit revenue growth in the full year, with strong customer engagement and the positive impact of the continued rollout of additional proprietary SSBTs and expansion of content on our retail gaming platform.

As of Friday 22 September, cash (net of customer balances) was approximately £162 million, with undrawn committed facilities of £150 million, giving total liquidity of more than £300 million.

Outlook and FY23 guidance

·    Synergy delivery is on track and significant cost savings are being delivered that have helped to mitigate the year-to-date revenue performance versus initial expectations. Further synergy opportunities have been identified but additional savings will be reinvested in growth initiatives, with the Group having significant growth opportunities available to it underpinned by its new operating model and brand-led marketing strategy

·    The Group now expects revenues in Q4 2023 to be sequentially higher than Q3 2023 but lower year over year by a mid-single digit, before returning to growth in 2024

·    The priority of driving sustainable growth in 2024 and beyond means that FY23 Adjusted EBITDA margin is now expected to be approximately 18-19%, with the emphasis on investing in and focusing the business to deliver its previously stated 2025 targets, which remain unchanged

Lord Mendelsohn, Executive Chair of 888, commented:

"This has been an important quarter for the business with the announcements of Per Widerström as our new CEO and Sean Wilkins as our new CFO, who I am very confident will lead the business through its next phases of growth and I look forward to Per starting as CEO in mid-October.

We are making significant strides to improve the quality and long-term sustainability of our revenues, but performance in Q3 has been below our expectations, and this means we now expect to end the year with EBITDA below our prior expectation.

The hard work the team has undertaken so far this year has set very strong foundations for the future of the business and our synergy delivery is well on track. We are strongly focused on investing to deliver good levels of expected revenue growth in 2024 as we progress towards our clear target of more than £2 billion of revenue in 2025 and I look forward to the coming years with confidence."

This announcement contains inside information.

Enquiries and further information:

888 Holdings Plc	[phone]
Lord Mendelsohn, Executive Chair Vaughan Lewis, Interim CFO and Chief Strategy Officer
Investor Relations James Finney, Director of IR Media	[e-mail] [e-mail]
Hudson Sandler Alex Brennan / Charlotte Cobb / Andy Richards	[phone]

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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