Growth Continues Despite Anticipated Q3 Revenue Drop at 888
Published October 22, 2022 by Lee R
Q3 revenue drops are misleading, as 888 proudly points out.
Israel-based mega-operator 888 has reported double-digit revenue drops for Q3.
The Totals
In its regular update, 888 announced the company's income figures for July to September, indicating a 10 % fall to £325m.
Drivers
The changes have been attributed primarily to heightened UK player safety measures and the closure of the Netherlands market.
More Q3 Results
Further details reveal that retail take remained stable at £124m, offsetting a £4m hit from three days of temporary closures together, combined with sporting event delays and postponements during the nationally observed high holidays.
Annual Performance
The many closures during this period undoubtedly contributed to what first appears to be an ebb in performance data, punctuated by an overall take dropping 7% for Q3 year-on-year.
Major Q3 Event
A big purchase took place over Q3 for 888: the acquisition of former iGaming powerhouse William Hill. WH was broken up and acquired as an American holding before the European portion was eventually won by 888.
Adjustments
The data for 888 for Q3 reflects the spread across all three quarters as if 888 had owned William Hill the entire time. The report also excludes the performance of the 888 Bingo business-- a sale completed on 7 July 2022.
CEO of 888 Speaks
The CEO of 888 Itai Pozner was pleased with the results upon completion of the “transformational combination” with William Hill:
I am pleased to report that during Q3, our teams continued to make rapid progress in integrating these two market-leading and highly complementary businesses.
Strategic Planning
Despite what is an anticipated and short-term fall off for a period of observance in the 888’s regional headquarters, Pozner posits that the organisational progress achieved by 888 is more than enough to offset the shortfalls.
Competitive Advantage
Pozner indicates that Q3 helped 888’s mission towards a new target operating model, which delivers what he calls a series of “quick win synergies” that Pozner projects will benefit adjusted EBITDA for H2 2022:
Revenues during the third quarter continued the trends we have seen in recent quarters, with relatively resilient trading across our main international markets and in our retail estate.
Accounting for Consumer Protection
The heightened player safety controls nonetheless negatively impacted the general stability of the market in the UK, according to Pozner, which will result in an adaptation to a more recreational, lower spending target market which has Pozner optimistic for further integration into the prized UK jurisdiction.
Outlook
After 20 years of successful growth, it appears 888 is doing what is necessary to continue to adapt and thrive despite a predictable drop in revenue for Q3.
