William Hill acquisition boosts first-half results at 888 Holdings

Betting and gaming giant 888 Holdings reported a boosted first-half performance on Tuesday, on the back of its acquisition of William Hill last July.

The London-listed firm said reported revenue jumped 165% year-on-year in the six months ended 30 June, to £882m, while adjusted EBITDA surged 211% to £156m.

However, the period showed a loss after tax of £33m, swinging from a £12m profit in the first half of 2022.

The loss was primarily driven by heightened interest costs, the amortisation of acquired intangibles, and certain singular expenses linked to the acquisition of William Hill’s non-US assets from Caesars Entertainment.

While pro forma group revenue declined 7% due to compliance alterations in dotcom markets, a refined marketing strategy, and a concentrated market focus, 888 said it had made strategic shifts in its business.

The company said it had consciously pivoted its business model, resulting in 95% of second quarter revenue coming from locally-regulated or taxed markets.

That pivot had brought about improved sustainability.

Furthermore, pro forma group adjusted EBITDA rose 9%, and its margin went up by 2.6 percentage points, hitting 17.7%.

A key financial highlight was the reduction of net debt by £68m, bringing it down to £1.66bn.

Furthermore, cash after customer balances had grown £11m since the close of 2022, standing at £188m as at 30 June.

The leverage was also scaled down from 5.6x in December to 5.1x in June.

With an undrawn £150m revolving credit facility, 888’s total liquidity now surpassed £300m.

The company said the outlook for full year adjusted EBITDA seemed promising, with projections indicating substantial year-on-year growth on a pro forma basis.

It said it anticipated an adjusted EBITDA margin of at least 20% for the full year, up from 16.8% in 2022.

The year-end leverage was also expected to dip slightly below 5x.

Since the period ended, 888 Holdings announced the appointment of Per Widerström as its new chief executive officer, effective from 16 October.

Lastly, addressing regulatory concerns, the company revealed an ongoing licence review by the Gambling Commission under the Gambling Act 2005.

However, 888 Holdings said it remained confident that the review would not affect its operations, with the board maintaining open communication with the regulator.

“I am very pleased with the progress we have made in the first half of the year as the group delivered against the plans we committed to at our investor day last year, while also successfully navigating business, market and regulatory volatility,” said executive chair Lord Mendelsohn.

“We made very strong progress with the execution of our integration plan and we now expect to realise the full £150m of synergies in 2024, a year earlier than the original plan.

“Our strong cash discipline and higher profits also enabled a 0.5x reduction in our leverage.”

Lord Mendelsohn added that 888 had successfully delivered against its focussed market strategy, changing the mix of its revenue and creating a more profitable and sustainable platform for future growth.

“I was thrilled to be able to announce the appointment of Per Widerström as our next CEO.

“Over the coming weeks I will be working closely with Per to ensure a smooth handover and I am highly confident in his ability to lead the team to realise the full potential of this business.

“The strategic progress made during the year to date has created a fundamentally stronger business with higher profit margins and we remain on track to deliver against expectations for the full year.”

At 0907 BST, shares in 888 Holdings were down 1% at 108.5p.

Reporting by Josh White for Sharecast.com.