888 has concluded a strategic review of its US B2C operations, resulting in the sale of selected assets to Hard Rock Digital (HRD).
The completion of this transaction is contingent upon regulatory approvals and other conditions, with finalisation expected in stages, likely concluding in Q4 2024.
888 is following the example of Kindred Group, which recently announced a similar US exit; although CEO Nils Andén told Gambling Insider this week a long-term return is not off the cards.
In response to this divestment, 888 has initiated a controlled exit from its remaining US B2C operations, with plans to fully cease operations in the region by the end of 2024, subject to regulatory approvals and processes.
The company anticipates a recurring annualised benefit to EBITDA of approximately £25m ($31.5m) starting from 2025 onwards, with around £10m of these savings earmarked for reinvestment into growth and value creation initiatives.
The financial impact of the sale and exit of US B2C operations has already been factored into the financial targets disclosed by 888 on 26 March 2024.
The operator expects to incur net one-off cash costs of approximately £40m related to its US exit, including previously announced brand licence termination fees, to be spread across the years 2024 to 2029.
These strategic decisions arrive after 888 revealed its financial performance in fiscal year 2023, where the company reported revenue of £1.71bn.
This growth was primarily attributed to the completion of the acquisition of William Hill earlier in 2023. However, despite this revenue growth (not pro forma revenue), the company experienced a decline in adjusted profit after tax by 25% to £48.1m.
888 also saw the conclusion of a review of its operating licences by the Gambling Commission without incurring penalties.
