888 Holdings ups cost savings goals following William Hill takeover

888 Holdings has set stricter cost reduction targets in a difficult market environment and rising debt levels associated with the acquisition of William Hill’s non-US operations.

The FTSE 250 company said it would seek synergies of around £150m from the bookmaker’s acquisition, up from a previous target of at least £100m.

It also plans to accelerate next year’s savings target from £54m to £87m and more than double the amount saved from investment related projects.

Tuesday’s announcement by the group comes ahead of a capital markets meeting today in London, where it will launch a new strategy with a set of revised financial targets.

By 2025, the Gibraltar-based company aims to generate revenue of more than £2bn, earnings per share of at least 35p and reduce net debt to less than 3.5 times adjusted underlying earnings.

888 hopes to meet the EPS target through a mix of revenue growth, increasing profit margins and reducing debt, the latter of which increased significantly to fund the William Hill International acquisition.

Completed in July, the £1.95bn deal saw 888 take control of around 1,400 gambling outlets in the UK, along with European online gaming brands Mr Green and Redbet, from casino operator Caesars Entertainment.

But since the initial announcement of the acquisition in September 2021, 888 said “material external changes” had led to greater difficulties for the company.

The pandemic-induced wave of digital gambling has faded, skyrocketing energy prices have driven inflation and the cost of servicing debt has risen as interest rates have risen.

In a third-quarter trading update released last month, the company estimated cash interest costs would be around £170 million next year, up from a previous forecast of £130 million to £140 million.

At the same time, it blamed new gambling safety regulations in Britain and the closure of operations in the Netherlands for a drop in overall revenue.

Since the release of these results, 888 said betting income was “slightly lower than expected,” though trading was “broadly in line” with expectations.

Within a “strategic framework” designed to improve performance, the company wants to narrow its focus to a small number of key markets and integrate its various subsidiaries into one global platform.

Itai Pazner, CEO of 888, said: “We are focused on building a customer-driven business with a portfolio of world-class brands offering complementary offerings, supporting our ambitions to drive market share growth in some of the most attractive gambling and gambling markets. in the world.

“This is enabled by a scalable, unified proprietary technology stack that will support our focus on product and content leadership.”

888 Holdings shares were down 1.7 percent at 101p during the late afternoon on Tuesday, though their value has fallen by just over half over the past six months.