888 (LSE: 888), a globally prominent betting and gaming enterprise featuring well-known brands such as William Hill, 888, and Mr. Green, has released a trading update following the conclusion of the three-month period (Q4) and the twelve-month period (FY23), both ending on December 31, 2023.
888 Highlights
Revenue for FY23 amounted to £1,711 million, reflecting an 8% year-over-year decrease. This decline was mainly attributed to a deliberate shift in the product mix, moving away from dotcom markets, resulting in an approximate £80 million reduction in revenues during FY23.
Additionally, changes in customer composition in the UK, influenced by enhanced safer gambling measures, and a strategic shift in the Group’s marketing approach towards emphasizing sustainable revenue and profitability, contributed to the impact on revenue. Collectively, these adjustments have cultivated a higher-quality and more sustainable business mix, with approximately 95% of FY23 revenue originating from regulated and taxed markets.
In the fourth quarter (Q4), revenue reached £424 million, marking a 5% increase compared to Q3 2023. However, there was a 7% year-over-year decrease. Despite the decline in year-over-year revenue, the number of active users (actives3) increased by 5%. This continued growth in the customer base lays the groundwork for sustained future revenue growth.
UK&I Online: Experienced an 8% decrease in revenue, totaling £658 million. This decline was predominantly influenced by the effects of safer gambling adjustments and a more precise marketing strategy. Despite robust customer engagement, reflected in a notable 11% increase in average monthly actives, the overall impact was mitigated by an 18% reduction in average revenue per customer. However, the implementation of synergy measures and a concentrated effort on efficient marketing indicate that Adjusted EBITDA for UK&I Online is poised to be significantly higher year over year, despite the decline in revenue.
Retail: Achieved a 3% increase in revenue, reaching £535 million, showcasing robust underlying performance. This growth was propelled by enhanced product offerings resulting from investments in Self-Service Betting Terminals (SSBTs) and gaming cabinets. Notably, these improvements more than compensated for a 3% reduction in the estate size throughout the year.
International: Experienced a 16% decline in revenue, amounting to £517 million (or a 17% decrease in constant currency4). This downturn was largely influenced by substantial effects stemming from compliance modifications in dotcom markets. Despite this, the core markets of Italy and Spain exhibited double-digit growth during the period.
