British bookmaker 888 Holdings has reported a 165% growth in revenue for the first half of 2023, amounting to £882 million ($1.12 billion) and Adjusted EBITDA surged by an impressive 211%, reaching £155.6 million (about $198 million). Despite its impressive revenue growth, the group reported an after-tax loss of £33 million ($41.9 million) for the period compared to profit-after-tax of £12 million (approximately $15 million) in H1-22.
Although there was a growth of 6% in retail revenue, this increase was overshadowed by an 11% reduction in online revenue. The losses were attributed to elevated interest costs, along with amortization and specific one-time expenses associated with the acquisition of William Hill.
The pro forma group revenue experienced a 7% decrease, primarily influenced by regulatory changes in dotcom markets, as well as a more targeted marketing strategy and market orientation. The company said it took proactive measures to adjust its business composition, resulting in a substantial 95% of Q2 2023 revenue originating from markets subject to local regulations and taxation. Meanwhile, pro forma group Adjusted EBITDA increased by 9%, and pro forma Adjusted EBITDA margin expanded by 2.6 percentage points to reach 17.7%. This growth was driven by the successful execution of synergies and a targeted strategy, the company said.
“We made very strong progress with the execution of our integration plan and we now expect to realise the full £150 million of synergies in 2024, a year earlier than the original plan. Our strong cash discipline and higher profits also enabled a 0.5x reduction in our leverage. We have successfully delivered against our focused market strategy, changing the mix of our revenue and creating a more profitable and sustainable platform for future growth,” Lord Mendelsohn, Executive Chair of 888, said.
The company expedited the realization of synergies, achieving £66 million in cash synergies during the first half of 2023.
As per the company, the anticipated Adjusted EBITDA for the fiscal year 2023 is expected to show substantial year-on-year growth on a pro forma basis. The projected Adjusted EBITDA margin for the full year is set to be at least 20%, a notable increase from 16.8% in 2022. Additionally, the year-end leverage is projected to be slightly below 5x.
In July, the company announced the appointment of Per Widerström as its new CEO. Widerström will assume the role from 16 October, 2023 and Mendelsohn will return to the role of non-executive Chair. Widerström has over 17 years of experience in the online gaming industry and is the former CEO of Europe-focused Fortuna Entertainment Group.
“Over the coming weeks, I will be working closely with Per to ensure a smooth handover and I am highly confident in his ability to lead the team to realize the full potential of this business. The strategic progress made during the year to date has created a fundamentally stronger business with higher profit margins and we remain on track to deliver against expectations for the full year,” Mendelsohn said.