Strong Financial Performance for 888 in H1 2023
Leading betting and gaming company 888, renowned for its brands including William Hill, 888, and Mr Green, reported impressive financial results for the six months ending June 30, 2023 (H1-23).
Group Revenue Surge
The company’s reported group revenue surged by an impressive 165% to reach £882 million during this period. This remarkable growth was largely attributed to the acquisition of William Hill, a strategic move that notably bolstered the company’s financial performance.
Profitability Boost
Adjusted EBITDA1, a key measure of earnings, showed remarkable growth of 211%, reaching £156 million. This substantial increase in earnings highlights the substantial positive impact of the William Hill acquisition on the company’s overall profitability.
Loss After Tax
Despite the strong financial performance, the company reported a loss after tax of £33 million during this period. This contrasts with the profit after tax of £12 million in the same period of the previous year. This loss was driven by increased interest costs, amortization of acquired intangibles, and certain one-off costs associated with the acquisition.
Pro Forma Revenue Decline
On a pro forma basis, the company’s Group revenue declined by 7%. This decline was primarily due to compliance changes in certain markets and a more focused marketing approach. However, a noteworthy achievement was the company’s ability to shift its business mix, resulting in 95% of Q2 2023 revenue being derived from locally regulated or taxed markets, thereby enhancing the company’s sustainability.
Pro Forma Adjusted EBITDA Growth
Despite the decline in revenue, pro forma Adjusted EBITDA displayed positive growth of 9%. This growth was facilitated by the effective execution of synergies and a strategic focus, leading to an improved Adjusted EBITDA margin of 17.7%.
Synergy Delivery Acceleration
The company successfully delivered £66 million of cash synergies in the first half of 2023. This accelerated delivery of synergies brings the full £150 million synergy target forward to 2024, a year earlier than initially anticipated.
Net Debt Reduction
The company managed to reduce net debt by £68 million to £1,660 million during this period, reflecting the company’s commitment to disciplined financial management and efficient capital use.
Future Outlook
For the remainder of 2023, the company anticipates a significantly higher pro forma Adjusted EBITDA, with an expected Adjusted EBITDA margin of at least 20% for the entire year.
New CEO Appointment
The company also announced the appointment of Per Widerström as CEO, effective October 16, 2023. This appointment is expected to leverage his industry expertise and leadership in enhancing the company’s growth prospects.
Regulatory Review
Despite an ongoing regulatory review by the GB Gambling Commission, the company foresees no significant operational impact from this assessment.
These highlights underscore 888’s robust financial performance, strategic focus on synergy realization, and efforts to enhance sustainability and growth in the competitive betting and gaming sector.
