888 revenues slip as bookmaker blames tightened gambling regulations
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888 blames drop in revenue to tightened UK gambling rules as it shifts focus to a ‘more recreational player base’
- Total sales fell 7% to £449m in the third quarter
- 888 said average player spend has fallen 14% annually
- The boss said he remains confident in adapting to his player base
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Bookmaker 888 has blamed the UK’s new online safety rules for a 7 percent drop in sales in the third quarter.
Total revenues fell to £449 million, which the group also committed to closing its Dutch operations as UK online revenues from its William Hill operations fell 14 percent to £125 million.
William Hill’s retail sales, whose 888 acquisition closed in July, was the only business segment not to decline in the three months to September 30, after posting flat results at the same time last year.
888 completed the William Hill acquisition in July
William Hill’s international online revenues fell 12 per cent to £52 million, while 888 core revenues fell 5 per cent to £148 million.
888 shares fell 4 percent to 86.55p in early trading, bringing losses to 71.4 percent so far.
In August, 888 blamed a sharp decline in first-half profits on heightened security measures taken by the UK government, leading to a decline in the number of Britons gambling online.
888 said it had cut average spend per player, which was down 14 percent year-over-year, after introducing “tougher measures in the third and fourth quarters of the previous year.”
Boss Itai Pazner said on Tuesday that 888 has faced “continued pressure” on UK online revenue “in light of the continued impact of the enhanced security measures for players”.
He told investors that 888 is ‘changing the mix of our business to a less spending, more recreational player base which gives us confidence in the long-term potential for our UK business’.
Elsewhere, retail revenues suffered a £4million blow from three days of temporary closures, as the national mourning period following the Queen’s death also led to cancellations and postponements of major sporting events.
Looking ahead, 888 expects fourth quarter revenues to be “comparable” to the same period last year, highlighting the cost-efficiency steps it has taken.
Pazner said, “Having completed our transformational combination with William Hill, I am pleased to report that our teams continued to make rapid progress during the third quarter in integrating these two market-leading and highly complementary companies.
“This has enabled us to make progress towards our new targeted business model, while realizing a series of ‘quick win’ synergies, which will drive our adjusted EBITDA margin for the second half of this year .
“As we look ahead, we continue to focus primarily on successful integration, execution and deleveraging to unlock the tremendous potential of our expanded business.
“We are building a stronger group that will leverage our leading technologies and portfolio of world-class brands to create a leading global gambling and gaming company, with clear plans to increase market share and profitability in some of the most attractive markets in the world. ‘