Operator 888 has released a trading update, revealing that revenue is set to decrease and outlining its plans to recover, while Chair Lord Mendelsohn reflected on the company’s year so far.
Despite retail performing strongly, 888 anticipates its overall revenue for Q3 2023 to drop 10% to approximately £400m ($487m).
Following the update, however, 888's share price fell 17% from £1.10 to circa £0.92.
The reasoning behind the forthcoming revenue decrease is due to several factors, according to 888. One is supposedly the impact of compliance changes in dotcom markets and another being unfavourable sporting results.
Furthermore, the ongoing impact of safer gambling changes within the UK have also impacted 888’s revenue, although the company’s "strong growth" in active customers should support a return to growth in revenue in 2024.
Additionally, 888’s revenue has seen a short-term impact from the change in marketing approach.
Lord Mendelsohn, Executive Chair of 888, commented: “We are making significant strides to improve the quality and long-term sustainability of our revenues, but performance in Q3 has been below our expectations, and this means we now expect to end the year with EBITDA below our prior expectation.”
As of Friday 22 September, cash (net of customer balances) was approximately £162m, with undrawn committed facilities of £150m, giving total liquidity of more than £300m.
Guidance and outlook for the rest of the financial year are that significant cost savings are being delivered and additional savings will be reinvested in growth initiatives.
The trading update stated: “The group now expects revenues in Q4 2023 to be sequentially higher than Q3 2023 but lower year over year by a mid-single-digit, before returning to growth in 2024.
“The priority of driving sustainable growth in 2024 and beyond means that FY23 adjusted EBITDA margin is now expected to be approximately 18-19%, with the emphasis on investing in and focusing the business to deliver its previously stated 2025 targets, which remain unchanged.”
