Mon. Jul 22nd, 2024

Leading betting and gaming operator 888 Holdings reported revenues outpacing expectations in Q1 2024, sparking optimism for sustained growth.

Short Summary:

  • 888 Holdings’ revenue hit £431 million in Q1 2024, surpassing the £420-430 million guidance range.
  • The firm, set to be rebranded as Evoke plc, outlined continued positive trends and strategic shifts.
  • CEO Per Widerström expressed confidence in resuming year-on-year growth by Q2 2024.

888 Holdings Plc, an eminent force in the global betting and gaming sector, has revealed a promising financial performance for the first quarter of 2024. The firm reported revenues amounting to £431 million, exceeding the previously projected guidance range of £420 million to £430 million. This performance highlights a 2% increase from the previous quarter and positions the company favourably for the forthcoming quarters.

CEO Per Widerström, who recently assumed leadership during a significant restructuring phase, described this period as a “strong quarter of progress.” According to Widerström, player volumes have grown robustly, converting into better revenue rates.

“I am pleased to report that Q1 2024 revenue was slightly ahead of our guidance, with strong player volumes converting into improved revenue run rates,” Widerström stated. “We remain confident in a return to growth from Q2 2024.”

In the UK market, despite a 9% increase in average monthly active users, revenue saw a slight decline of 1%. This was mainly due to reduced sports betting revenues, which overshadowed gains in gaming revenues, partly influenced by events like the Cheltenham Festival. The total revenue for the UK and Ireland online division amounted to £164.4 million, with gaming revenues up 4%, countering an 8% dip in betting revenues.

However, the company’s international division showcased a favourable trajectory with a 6% quarter-on-quarter revenue increase. Revenue gains were primarily driven by core markets such as Italy, Spain, and Denmark. This segment achieved a commendable 4% year-over-year growth in February and March 2024.

Conversely, the retail arm, which includes William Hill’s physical outlets, experienced a 7% decline in revenue. Despite the reduction, Widerström affirmed that they are taking significant strides to position the company for long-term success.

“We are moving decisively and at pace to position our company for long-term success, and I look forward to providing further updates about our progress in the coming months,” said Widerström.

As part of its strategic growth plan, the company introduced the ‘Value Creation Plan’ (VCP) on March 26, 2024. This strategy aims for an annual revenue growth rate of 5-9% and an improved EBITDA margin of approximately 100 basis points per year. Additionally, the company will be rebranded as Evoke plc, subject to shareholder approval in May. This rebranding is a part of a broader strategic transformation to reflect the Group’s ‘One Company’ approach.

“I was delighted to outline our multi-year value creation plan alongside our full-year results in March, and am pleased to report a strong quarter of progress against these plans,” Widerström elaborated.

The company also concluded a strategic review of its US business-to-consumer operations on March 28, leading to the sale of select assets to Hard Rock Digital. This shift marks a “controlled exit” from the US market to focus on core European markets, including Italy, Denmark, Spain, and the UK. This realignment is estimated to deliver an ongoing EBITDA improvement of £25 million annually from 2025.

As part of cost-cutting and operational efficiency initiatives, 888 will reinvest £30 million of operating cost savings into more profitable marketing efforts. Despite facing challenges in the retail division, the overall corporate outlook remains optimistic as the company recalibrates to maximise profitability and market share in its core regions.

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