888 Holdings has published its financial results for the first six months of 2022, reporting that it has made “strong progress” in strategic M&A, market focus, and investing in its sustainable competitive advantages.
Reflecting on the results, CEO Itai Pazner noted that the non-US William Hill acquisition from Caesars Entertainment has created “very strong foundations” to support 888’s growth plans.
He added that, in the second half of the year, the group’s main focus will be on “integration, delivering on our synergy plans, and driving higher profitability”.
For H1, 888 has reported a group revenue drop of 13% year-over-year to $404.1m (2021: $446.6m). B2B operations brought in $18.2m for the total revenue figure, a 7.8% increase YoY (2021: $16.9m).
In B2C, gaming operations accounted for $343.7m of the total revenue figure, an 8.6% YoY decline (2021: $376.1m). Meanwhile, betting operations achieved revenues of $42.1m in H1, a 40.2% fall YoY (2021: $70.4m).
The group declared that the majority of its business is “seeing relatively stable revenues, offset by declines in the UK (-25%) reflecting the implementation of more stringent safer gambling policies, and the closure of the Netherlands”. When the UK and Netherlands are excluded, revenue was up 2% YoY.
888’s adjusted EBITDA for H1 stood at $60.8m (2021: $85.5m), with the adjusted EBITDA margin lower due to “continued investment in the US to support SI Sportsbook state launches, together with additional compliance-related costs”.
The group’s net profit stood at $14.6m (2021: £44.6m) while adjusted profit came in at $37.2m (2021: $59.6m).
“The combination with William Hill, which we completed soon after the period end, transformed the Group and creates very strong foundations to support our ambitious growth plans,” commented Pazner.
“This combination of two exceptional and complementary businesses creates one of the world’s leading online betting and gaming groups with superior scale, leading front-end and back-end technology, increased diversification across products, markets and channels, and a world-class team.
“The Group’s financial performance in the period primarily reflects market conditions in the UK. However, 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.”
888 sees US revenue growth
Per geographical market, the UK brought in the most H1 revenue with $147m, followed by EMEA excluding the UK and Italy ($137.3m), the Americas ($56.7m), Italy ($56.5m), and the Rest of the World ($6.4m).
Specifically in the Americas, while revenue decreased YoY by 1% (2021: $57m), US revenue increased by 29% YoY to $12.1m.
888 has noted that US improvements were driven by “growth in B2B revenues related to the Group’s partnership with World Series of Poker (WSOP), and the launch in Pennsylvania and Michigan in July 2021 and March 2022 respectively”.
Elsewhere in the Americas, revenue declined by 7% due to “an increase in promotional investment to support the launch of Ontario on a locally regulated basis from April 2022”.
Rest of 2022 outlook
Looking ahead, 888 has reported that its business is on “a stable trend”, with Q2 2022 pro forma revenue growth of 1% against the previous quarter, including UK online revenue rises across both 888 and William Hill brands. The group’s revenue in H2 2022 is expected to be in line with H1 income.
The firm also highlighted its long-term debt structure, with $2.1bn in gross debt with maturities ranging from five to six years, adding that cash interest costs are currently expected to be approximately $79.1m in H2 2022, and $158.2m to $170.3m in the full year 2023 based on current market conditions and the forward curve.
Pazner concluded: “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.”