The parent company of renowned brands 888, William Hill, and Mr Green is set to counteract losses in the second half of the fiscal year by enacting up to £30 million in cost-saving measures, while also hitting full-year earnings targets.
Key drivers for cost efficiencies
Primary factors driving these cost efficiencies in H2 include a leadership change, an operational overhaul, and 888’s newly defined strategy and value creation plan unveiled in March.
Revenue growth and financial projections
The firm projects revenue growth for H2 2024 to be consistent with its medium-term guidance of 5%-9%, while targeting an ambitious 20% EBITDA margin by 2025.
Reduced marketing costs
Moreover, marketing expenses are expected to decline by £35 million to £40 million in H2 compared to H1, further contributing to the anticipated cost savings.
Regulus partners issues important profit warning amid strategic changes
Regulus Partners has highlighted a significant profit warning for the company, attributing much of the impact to increased marketing expenditures coinciding with the rollout of a new strategy. During the first half of the year, the group reported revenue of £862 million, achieving an EBITDA of £115 million.
Q2 performance insights
In the second quarter, the company’s UK online revenue saw a modest 3% year-on-year increase. However, the sports betting segment struggled due to elevated marketing costs. Despite these challenges, the company remains optimistic about improved future performance.
Future outlook
There is a strong belief that enhancements in retail offerings will drive better results moving forward. Key initiatives include the introduction of new gaming machines and an enhanced SSBT (Self-Service Betting Terminal) product. The company is hopeful that these improvements will yield positive outcomes.
Internationally, key markets in Italy, Spain, and Denmark experienced robust double-digit growth, contributing to approximately 60% of the division’s revenue. However, the exit from the US market in March adversely impacted Q2 earnings.
Evoke CEO Per Widerström voiced his disappointment with the financial results for the first half of the year but underscored the improved business health as a result of strategic corrective measures. Widerström pointed out the company’s strategic direction and its potential for long-term success, following significant changes and a transformative approach.
Key market growth
- Italy: 12% increase;
- Spain: 15% increase;
- Denmark: 14% increase;
Financial impact
Despite the positive international performance, the withdrawal from the US market in March led to a noticeable decline in Q2 earnings. If not for this exit, overall financial metrics might have shown even stronger growth.
CEO Commentary
CEO Per Widerström acknowledged the underwhelming financial results in the first half but stressed that the business is now healthier owing to strategic corrections. He believes the company’s new strategic initiatives and transformations position it well for sustainable future success.
888 holdings cfo addresses financial challenges and future strategy
In March, 888 Holdings CFO Sean Wilkins acknowledged a disappointing financial performance for 2023, reporting a 7.5% decline in revenue year-on-year on a pro forma basis. This downturn highlights the need for strategic changes and cost-saving initiatives to enhance the company’s financial stability.
Wilkins emphasized the company’s commitment to driving revenue growth through various measures. These include optimizing operational efficiencies, exploring new market opportunities, and strengthening the company’s financial foundation. The focus is not only on recovering lost ground but also on positioning 888 Holdings for sustainable, long-term success.
Overall, 888 Holdings is dedicated to overcoming its current financial challenges by implementing cost-saving strategies and identifying new revenue streams. With these efforts, the company aims to achieve a stronger financial position and deliver value to its stakeholders in the coming periods.
