Leading global gambling company 888 Holdings saw a surprising decline in revenue in the fourth quarter despite a World Cup boost
888 explained the slight dip in revenue with the new online gambling regulations in the UK, regarding the quarter with optimism despite the disappointing metrics. The company’s retail segment performed well, recording a modest bump in revenue. However, it was not enough to outweigh a dip in online earnings. 888’s financial situation remains stable, but the recent financial results may herald looming trouble.
Recent Results Continue Q3’s Trends
888 Holdings PLC is the parent company of a variety of gambling brands. The recent acquisition of William Hill significantly boosted its global reach, cementing its status as one of the leading names in the gambling world. However, recent financial reports have not delivered the stunning profits one might associate with such an industry leader.
The most recent dip in revenue continues the trend from the third quarter, which saw 888’s year-on-year revenue drop by 7% to £484 million ($546.5 million). CEO Itai Pazner justified the results with the instability following the William Hill acquisition and the strict UK online player safety measures. Despite his optimism, the worrying trend appears to be stretching into Q4.
The Online Segment Suffered the Most
Fourth quarter revenue to 31 December dropped by 2.6% to GBP458 million ($557.5 million). Yearly declined by 3% to GBP1.85 billion ($2.25 billion) from GBP1.91 billion ($2.33 billion). While online profits remained consistent with the previous quarter, they shrunk by 5% compared to last year, sitting at £326 million ($396.4 million) for Q4.
Retail revenues grew by 5% year on year, reaching £131 million (159.3 million), but the rally was not enough to offset the online segment’s lacking performance. 888 again blamed the stricter UK regulations, noting that other regulated countries recorded strong performances. CEO Pazner lauded the company’s progress towards its strategic roadmap, disregarding any notion of upcoming difficulties.
Revenues during the fourth quarter saw continued strong trading in retail and a robust performance online.
Itai Pazner, 888 Holdings CEO
888 also announced that CFO Yariv Dafna would leave the company after the end of the 2022 fiscal year on 31 March. Although the company did not state a reason for his departure and thanked him for his contributions, the announcement’s timing implies that the disappointing financial performance may have been a factor in this decision.
Adjusted EBITDA for 2022 should still meet 888’s guidance range of GBP305 million ($371.2 million) to GBP315 million ($383.4 million). However, the most recent financial report caused some concern, causing 888 shares to drop by 4.7% to 89.14p. Such hesitation is understandable, given that the World Cup usually results in skyrocketing profits. While 888 is not in immediate trouble, a positive earnings call would greatly help alleviate any rising concerns.