888’s FY 2022 Report Reveals Mixed Results, Management Remains Optimistic

888 Holdings’ FY22 results and Q1 2023 trading update showed strong performance in key verticals, but UK and Middle East compliance issues dampened performance in these jurisdictions. The William Hill acquisition was a significant investment that had a transformative effect on the group, substantially improving its 2023 prospects. Overall, 888’s leadership stood by its earlier estimates, projecting impressive growth by 2025.

Focusing on Growth Had Its Price

The global online gaming and entertainment company had a turbulent year, relentlessly pursuing growth opportunities at the cost of short-term profitability. The group’s yearly financial results reflected this approach as Adjusted EBITDA rose to £217.9 million ($272.52 million) for an 82% year-on-year improvement. Revenue likewise soared 74% compared to 2021, reaching £1.2 billion ($1.5 billion).

888’s acquisition of William Hill significantly impacted the company’s financials, contributing substantially to overall revenue. However, the purchase significantly impacted the group’s yearly earnings and was one of the primary factors behind the FY22 net loss of £120 million. Lord Mendelsohn remained confident the acquisition would pay significant future dividends.

The combination with William Hill… brought together two exceptional and complementary businesses to create one of the world’s leading betting and gaming businesses.

Lord Mendelsohn, 888 executive chair

The group’s expansion-minded strategy contributed to its rising debt, which reached £1.8 billion ($2.25 billion). The William Hill regulatory issues in the UK and compliance troubles in the Middle East posed further challenges, dampening growth in key jurisdictions. Rising inflation and ongoing global financial pressures meant that pro forma revenue actually decreased by 3% year-on-year to 1.85 billion ($2.31 billion).

888 Is in a Perfect Position to Capitalize on Its Investments

888’s leadership remarked that the FY22 financials matched their expectations, and their 2023 and 2025 estimates remained predominantly unchanged. Although the projected revenue will slightly decrease the following year, the group’s focus on sustainable revenue streams should bolster EBITDA and ensure lasting success. 888 remained confident that revenues could reach £2 billion by 2025, thanks to newly created synergies.

Our clear priorities of integration, market focus, and deleveraging give us confidence in our 2025 targets as we build a stronger and more sustainable business.

Lord Mendelsohn, 888 executive chair

A five-priority strategy outlined 888’s planned approach. The group will focus on fully integrating newly acquired businesses, developing profitable markets, and capitalizing on growth opportunities. 888 will also double down on maintaining its competitive advantage, investing in sustainable growth and steadily reducing adjusted net debt to EBITDA to below 3.5x.

Overall, 888 finds itself in a pivotal position where it needs to capitalize on its prior investments, consolidating its revenue streams. The company’s ability to adapt to changing market conditions will be instrumental in the coming years as the industry continues to evolve. 888 is well-positioned to remain a market leader, provided it follows through on its plans and can deal with rising challenges.