888 shares rise as William Hill owner posts forecast-beating revenues

Bookmaker 888 beat revenue forecasts in the first three months of the year thanks to a bounce in player volumes, as the William Hill owner eyes a return to growth in the second quarter.

The group posted revenues of £431million, edging past forecasts of £420million to £430million and jumping 2 per cent on the final quarter of 2023.

Revenues were down 3 per cent compared to the same period last year, but 888 told shareholders it expects to return to year-on-year growth in the three months to the end of June.

888 shares were up 2.8 per cent to 82p in early trading on Friday. They have fallen 8.4 per cent since the start of the year, reflecting investor concerns about regulation and debt.

The group, which will soon rebrand under the name Evoke, revealed a new strategy in March to focus on core markets while cutting costs via investment in automation and AI.

It followed a tough 2023 that saw 888 struggle against new UK player safety regulations and slower growth in some international markets.

Rival Entain has also struggled against regulatory issues, which weighed on its first quarter revenues.  

Boss Per Widerström said: ‘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.

‘Having lapped various regulatory and compliance changes during the quarter, and with increased marketing investment supported by an exciting product pipeline, we remain confident in a return to growth from Q2 2024.’

International markets were the key driver of first quarter revenues, jumping 6 per cent on the previous three months thanks to a particularly strong performance in Italy, Spain and Denmark.

UK and Ireland revenues slipped 1 per cent, reflecting ‘increased customer investment’ ahead of the Cheltenham Festival, but average monthly user activity was up 9 per cent.

·Retail revenues were down 7 per cent, demonstrating the impact of 888 closing 2 per cent of its shops as part of a more online-focused strategy.

Widerström added: ‘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.

‘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.’

Commenting on 888’s first quarter performance, lead equity analyst at Hargreaves Lansdown Sophie Lund-Yates said: ‘Today’s trading update should boost confidence that the turnaround has legs.

‘For all the positives, it’s not all shipshape. Leverage remains eye wateringly high, and reducing that remains a priority. 

‘At the same time, the overarching risk for any gambling company is its ability to handle the regulatory environment.

‘888’s valuation has taken a knock as it’s worked through various issues, and there could be room for upside in the short to medium term, especially as leverage comes down to more sensible levels.’