888 chief executive says financial performance 'must improve' as William Hill owner reveals fall in revenue

Shares in William Hill owner 888 bounced back following a sharp fall on Wednesday morning after the operator announced a fall in revenue last year and tempered expectations for 2024.

Chief executive Per Widerstrom said 888's financial performance "must improve" as the company issued a post-close trading update which revealed revenue for the group had fallen by eight per cent to £1.71 billion in 2023.

The company said a move away from grey markets had reduced revenues by around £80 million during the year, while measures such as affordability checks in the UK had further impacted performance.

In the UK and Ireland online revenue fell by eight per cent to £658m, although betting shop revenue grew by three per cent to £535m despite a three per cent reduction in the size of the retail estate.

In the fourth quarter, 888 recorded revenue of £424m, five per cent higher than the previous three months but down seven per cent year-over-year, although active customers were up five per cent on the previous year.

888 said a cost savings programme of approximately £30m had begun in December and that adjusted earnings for this year were expected to be at the low end of the consensus range of £340m-£397m.

The company's share price dropped to below 70p at one point but had recovered to 79.75p, down 1.54 per cent, by the end of the day.

888 chief executive Per WiderstromCredit: 888 Holdings

Widerstrom said the group had made "important strategic and operational progress in the face of some significant regulatory and compliance headwinds" during 2023.

He added: "I am pleased to say that the business has enhanced its foundations for sustainable and profitable growth including significantly strengthening compliance, refining its approach to marketing investment and increasing its focus on recreational customers."

Widerstrom took over as chief executive in October following a turbulent period for the company during which  his predecessor and 888 veteran Itai Pazner departed the business.

Widerstrom said: "I have joined the business at both an exciting and important time. There are clear opportunities to unlock our significant potential, but as a business we know that going forward we must be more proactive in adapting to changes in regulation and technology.

"We are now taking rapid actions to position the group for future success, reducing our overhead costs and freeing up funds to invest in growth based upon our new strategy and value creation plan.

"The financial performance of the group must improve, and the actions we are taking will build a leaner, more agile, and more effective organisation structure, as well as establishing a more effective management of the customer and product life cycle. These plans support material value creation and significantly higher profits over the coming years."

There have been a number of changes to 888's executive team in recent months, including the appointment of Sean Wilkins as chief financial officer. Wilkins will take up his appointment on February 1.

Widerstrom added: "I have been working hard with the board, our strengthened executive team, and the talented people across the business to refine our strategic framework, which is being translated into a value creation plan, and am confident that we are poised to deliver deleveraging and strong shareholder returns in the coming years.

"I'm looking forward to outlining our 2024-2026 plan alongside our full year results in late March."

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