888 Reports Q1 Earnings Surge and Unveils New Growth Strategy
888 Holdings announced a promising start to 2024 with its latest quarterly earnings exceeding forecasts. The company recorded a revenue of £431 million in the first quarter, surpassing the expected £420-430 million range.
888 experienced a modest 2% revenue increase from the previous quarter (Q4 2023), signaling a steady upward trajectory in its financial performance. This growth is anticipated to align with the company’s mid-term target of 5-9% annual revenue growth starting from the second quarter of 2024.
Q1 Financial Performance Highlights
UK & Ireland Online Division: Despite a slight 1% revenue dip due to decreased sports revenues, particularly influenced by the Cheltenham Festival, this division saw a resurgence in gaming revenue, up by 4%. Improved customer engagement and forthcoming product launches are expected to drive further growth.
International Operations: The international segment witnessed a 6% revenue increase over the last quarter, with a 4% year-on-year growth for February and March. This growth is attributed to strong performance in core markets such as Italy, Spain, and Denmark, post-compliance changes.
Retail Sector: The retail division reported a 7% revenue decline, impacted by a strategic reduction in shop numbers and challenging comparisons from the previous year.
Strategic Developments and Rebranding
On March 26, 2024, 888 unveiled its Value Creation Plan (VCP) which outlines ambitious financial goals and a comprehensive strategy aimed at revenue growth and improved EBITDA margins. Part of this strategy includes a significant corporate identity shift to ‘evoke plc’, pending shareholder approval, to reflect a unified company approach.
The company also announced a reset of its operating model, with £30 million in operating cost savings earmarked for reinvestment into marketing initiatives. These funds are intended to bolster profitability in line with the VCP.
US Market Strategy and Outlook
Following a strategic review, 888 has decided to divest selected assets of its US B2C business, with the remaining operations expected to close within 2024. This move is projected to enhance EBITDA by £25 million annually from 2025.
Per Widerström, CEO of 888, commented on the quarter’s results: “I am pleased to report that Q1 2024 revenue was slightly ahead of our guidance, with strong player volumes converting into improved revenue run rates. Having lapped various regulatory and compliance changes during the quarter, and with increased marketing investment supported by an exciting product pipeline, we remain confident in a return to growth from Q2 2024.”
