888 Posts FY Loss; Sees Lower 2023 Revenue

888 Holdings Plc (888.L), an owner of gambling brands and websites, reported that its net loss attributable to equity holders of the parent for fiscal year 2022 was 120.5 million pounds or 28.3 pence per share compared to net profit of 49.9 million pounds or 13.2 pence per share in 2021.

The latest-period results were impacted by exceptional costs and adjusting items of 184.8 million pounds primarily related to amortization of acquired intangibles, impairment of historic US goodwill and William Hill technology no longer under development, together with transaction fees for the acquisition of William Hill, and integration and restructuring costs post completion as we began to realize synergies.

On an adjusted basis, profits decreased to 64.2 million pounds from 82.6 million pounds in 2021. On an adjusted basis, basic earnings per share decreased by 32% to 15.1 pence from the prior year.

The net loss before tax for 2022 was 115.7 million pounds compared to net profit before tax of 59.0 million pounds in the prior year. On an adjusted basis, pre-tax profits decreased by 10% to 80.5 million pounds from last year, with the increased financing costs from the debt on acquisition of William Hill offsetting the increased earnings from the enlarged Group.

Revenue for fiscal year 2022 was 1.24 billion pounds, an increase of 74% to 2021 of 712.3 million pounds with the consolidation of William Hill revenues across the second-half of 2022. On a pro forma basis, revenue was 1.85 billion pounds, a decrease of 3% from the prior year.

The decline in revenue primarily reflects the additional player safety checks implemented in the UK&I Online business across both brands over the previous two years with a 20% reduction in UK&I Online revenue in 2022 compared to 2021.

The Board of Directors is not recommending a dividend to be paid in respect of the year ended 31 December 2022 (3.2 pence per share paid 2021), in light of the Board’s decision to suspend payments of dividends until leverage is at or below 3x, as previously announced following the acquisition.

Meanwhile, 888 reported that its revenue for the first quarter of 2023 was 446 million pounds, representing an increase of 168% on a reported basis and decrease of 5% on a pro forma basis. The reduction on a pro forma basis reflects strong growth in retail of +8%, more than offset by UK&I Online being down 9% with the continued impact of safer gambling changes, and International Online being down 11% as a result of refined market focus and compliance changes in the Middle East.

The company expects 2023 revenues to be lower than 2022 by a low to mid single digit percentage, but Adjusted EBITDA to be significantly higher as it focuses on building sustainable revenues, with an Adjusted EBITDA margin of at least 20%.

The company said it remains confident in its 2025 targets of at least 2 billion pounds of revenue, an adjusted EBITDA margin of at least 23% and more than 35 pence of adjusted earnings per share.

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