New William Hill owner 888 reveals plans to tackle 'challenging' environment
The new owner of William Hill is set to accelerate and increase cost-saving plans as the company said its operating environment had become "more challenging".
888, which completed the near £2 billion acquisition of William Hill's non-US business during the summer, also said it would take action having become more exposed to higher interest rates due to the structure of the deal.
The company announced on Tuesday it was looking to achieve cost synergies from the acquisition of £150 million, compared to the original target of £100m, of which around £34m would be related to capital expenditure, more than double the previous £15m.
Around £87m operating cost synergies are expected to be achieved next year, up from £54m, but no details were given about how the cost savings would be achieved.
Chief executive Itai Pazner said: "As a newly combined business we have significant scope for improving our operating model and delivering efficiencies.
"Over the next two years we plan to fully integrate our business – creating a bigger, stronger and better organisation with higher profit margins."
888 said the structure of the Hills deal had resulted in its net debt being higher than anticipated, leaving it more exposed to interest rate rises which had in turn "impacted its ability to reinvest excess cash flow in accelerating growth in the short term".
The company said it may look to the debt markets to repay up to £347m of the bank loans related to the purchase of William Hill.
888 also said that macroeconomic conditions were shifting, with key markets facing "increasingly high inflation, energy costs hikes, higher interest rates, and, in some cases such as the UK, potential further regulatory changes".
Nevertheless, 888 revealed it was aiming to achieve revenue of more than £2 billion in 2025, with a "refined strategic focus on a smaller number of key markets".
Pazner said: "We are focused on building a customer-led business with a portfolio of world-class brands that provide complementary offerings, supporting our ambitions to drive market share growth in some of the most attractive betting and gaming markets in the world."
He added: "Our long-term potential remains exciting. Building our unified tech platform will present us with real future growth opportunities as we take advantage of our world class brands, product and content leadership, and customer excellence to set our business for the next decade of growth."
Shares in 888 were up 0.3p at 103p on Tuesday night.
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