888 Holdings Shares Fell 16% but Recovered on a Trading Update

The 888 Holdings PLC (LON: 888) share price fell 16% after releasing a trading update for the 2023 fiscal year but later recovered. The betting company’s Q4 revenue reached £424m, a 5% increase from Q3 2023 but a 7% decrease compared to last year. Despite this, there was a 5% increase in active users, laying the groundwork for future revenue growth.

FY23 saw revenues of £1,711m, a decrease of 8% from the previous year. The decline was mainly due to a strategic shift away from dot-com markets, impacting revenues by about £80m. Changes in customer behaviour in the UK, influenced by additional safer gambling measures and a revised marketing strategy, also affected revenue. 

However, these changes led to a more sustainable business mix, with 95% of FY23 revenue coming from regulated and taxed markets. The UK&I online revenue fell 8% to £658m, primarily due to safer gambling initiatives and a new marketing approach. 

Despite a decrease in average revenue per customer, strong customer engagement resulted in significantly higher year-over-year Adjusted EBITDA. Retail: Revenue increased by 3% to £535m, driven by enhanced product offerings, despite a 3% reduction in estate size.

International revenue declined by 16% to £517m due to compliance changes in dot-com markets. However, core markets like Italy and Spain saw double-digit growth.

The company achieved its £150m synergy target savings, set to be fully realised in 2024, mitigating regulatory and compliance impacts. The Group expects an Adjusted EBITDA Margin of approximately 18% for FY23. As of December 31, 2023, cash reserves stood at around £125m, with an additional undrawn RCF of £150m, totalling £275m in liquidity.

Several key appointments were made to the executive management team, including Sean Wilkins as CFO, Rik Barker as Chief Information Technology Officer, Ian Gallagher as Chief Product Officer, Fredrik Ekdahl as Group General Counsel, and Jeffrey Haas as Chief Growth Officer.

Per Widerström, CEO of 888, commented: “In FY23, the Group made important strategic and operational progress in the face of some significant regulatory and compliance headwinds. I am pleased to say that the business has enhanced its foundations for sustainable and profitable growth, including significantly strengthening compliance, refining its approach to marketing investment, and increasing its focus on recreational customers.”

888 Holdings share price. 

The 888 Holdings share price fell 16.01% to trade at 68.45p from Tuesday’s closing price of 81.50p.