888 posts full-year rise in revenue, adjusted earnings
By Josh White
Date: Tuesday 26 Mar 2024
(Sharecast News) - Gambling operator 888 Holdings reported a significant uptick in revenue in its 2023 results on Tuesday, up 38% to £1.71bn, while adjusted EBITDA jumped 41% to £308.3m on a reported basis.
The London-listed owner of brands including William Hill said adjusted profit after tax declined 25% to £48.1m, while losses after tax narrowed 53% to £56.4m.
Adjusted earnings per share decreased 29% to 10.7p, while losses per share dropped 55% to 12.6p.
Pro forma results showed revenue stability at £1.71bn, down 8% year-on-year, with adjusted EBITDA largely unchanged at £308.3m, 1% weaker year-on-year.
The firm said it maintained a healthy cash position of £128m, excluding customer balances, and undrawn revolving credit facilities of £150m, resulting in total liquidity of £278m.
Net debt remained stable at £1.71bn, yielding an adjusted net debt-to-EBITDA ratio of 5.6x.
Under its new value creation plan (VCP), 888 Holdings appointed Per Widerström as its new chief executive officer and bolstered its executive team with new appointments to drive execution.
The group said it had reset its operating model to enhance accountability and efficiency, leading to approximately £30m in annual cost savings.
A strategic framework had been established, with a focus on operational excellence and six strategic initiatives to drive value creation.
Additionally, the group said it had simplified its market archetypes to focus on 'core' markets and 'optimise' markets, with a strategic review of the US B2C business underway.
Looking ahead, 888 said it was aiming to deliver sustainable revenue growth of 5% to 9% per year, expand the adjusted EBITDA margin by around 100 basis points annually, and reduce leverage to below 3.5x by the end of 2026.
Current trading suggested first-quarter revenue to be in the range of £420m to £430m, with a positive outlook for 2024 revenue in line with medium-term targets.
The board added that the proposed change of its name to Evoke plc reflected its multi-brand operating model and vision to provide world-class betting and gaming experiences.
It said it remained confident in achieving adjusted EBITDA expectations for 2024, and was committed to driving long-term sustainable growth and value creation.
"It is incredibly exciting to announce our value creation plan, our strategy for success, our new financial targets, and our new corporate identity," said chief executive officer Per Widerström.
"Today marks the beginning of an exciting new dawn for this business.
"Having joined the company in October, my conviction in the significant opportunity for the group is stronger than ever."
Widerström said the company had acted with pace, decisiveness and urgency to build a clear strategy to deliver success.
"These actions include significantly strengthening our executive leadership team and developing a new strategic framework and value creation plan.
"I firmly believe that the group now has all the key ingredients for long-term success - leading positions in growing markets with high and rising barriers to entry; powerful proprietary technology; a top-class management team; and some of the strongest betting and gaming brands in the world.
"We are now clear on what success looks like, we have the team and capabilities to deliver, and I am confident that the execution of our plan will deliver a high return on equity from sustainable profitable growth, enhanced by deleveraging."
At 1026 GMT, shares in 888 Holdings were up 6.74% at 89.45p.
Reporting by Josh White for Sharecast.com.
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