888Casino Operator 888 Holdings Q4 Revenue Review + 2022 Financial Performance!

888 Holdings’ latest Q4 financials and preliminary 2022 revenue performance show increases in retail revenue and a need for recovery online! (Photo by Ryoji Iwata on Unsplash)

Welcome to the latest financial breakdown covering 888 Holdings, the owner of 888Casino, 888Poker, 888Sport, William Hill and Mr Green Casino.

The price of 888 Holdings stock soared in 2021, but it has been all downhill since then. The stock price collapsed since September 2022 and has fallen 75%, due to a range of accountable… and some unforeseeable factors. Last week, 888 plunged 27% (actually 30% at one point) in one day and has regained a little ground but it has a long way to go to gain investor confidence.

The company has suffered from debt, a poor Q3 report, regulatory/compliance issues, and a recent spate of resignations.

The company’s tumbling stock price has largely been tied to the £2 billion purchase of William Hill in July 2022 and the debt that has dragged it down. The debt is currently more than 5 times its current market value of 888. The company maintains that William Hill has robust foundations and will utilize a 2-phase strategy to restore shareholder returns.

The main strategy will examine its current position in the market, reevaluate its key markets and focus on these to drive greater market share and lead sustainable positions. The secondary phase will seek to reduce their debt (top priority until the end of 2025), which has suffered from macroeconomic blows due to increases in interest rates, hampering the company’s ability to reinvest excess cash in the short term. The company has also started to reduce costs by cutting 140 jobs globally to attain short-term goals.

Despite all this, 888 as a brand is still one of the best on the iGaming market and operates across multiple jurisdictions including the UKGC, MGA, Canada Ontario, and more – check out the 888 Casino review here for more info.

888 Holdings 2022 Q4 Revenue Stats – Land-based & Online

The figures for 888 Holdings in the stock market may look bleak. However, the revenue reports are certainly not a reflection of the stock prices.

• Q4 Land-based sector: With Covid firmly behind 888, the land-based revenue improved with a 4.8% hike up to £ 131 million. This figure reflects the entire 888 and William Hill high street and land-based casino income.
• Q4 Online Sector: In the online sector, 888 has been taking some unfortunate hits. This led to a 5.5% year-on-year decrease coming from its online business ventures after reporting £ 326 million in Q4, which is £ 17.9 million down on the previous year. Even the 4.8% gains in the retail sector, worth £ 6 million was not enough to cushion the Q4 reduction in online revenue.

Q4 Totals Revenue: It wasn’t a great quarter for 888 Holdings as the company pulled out of the Netherlands, which affected around 15% of its revenue. Overall, this meant the company drew in £ 457 million for Q4.

888 Holdings Overall 2022 Revenue Stats – Land-based & Online

Overall, 2022 total revenue stats, which are just preliminary stats for the time being look reasonably OK, but of course, the London Stock Exchange PLC and its investors will certainly hope this is not a sign of things to come and rather it is just a temporary chink in the business’s armoury.

• 2022 Land-based sector: Land-based gambling activities earned 888 Holdings £ 520 million. It made up 28% of the company’s revenue for the year. This is an increase of 54% year-on-year, however, we have to consider Covid closures for 2021.
• 2022 Online Sector: The entire year of 2022 has reportedly brought in £ 1.33 billion in total, which is 72% of the company’s entire revenue. Unfortunately, that means a 15% year-on-year decline for 888 Holdings.

2022 Full Revenue: Across all business sectors, the total revenue for last year was £ 1.85 billion. This is a 2.6% decline versus 2021. Compare this to a 75% slip in stock value, and actually, things don’t look too bad.

UK Gambling Commission Woes Hit 888 Holdings Finances

As 888 completed its acquisition of William Hill during July 2022, results are presented on a pro-forma basis as if 888 had owned the business across all of the reported periods.

The UK gaming commission contributed to 888 Holdings’ financial woes. The company has come under scrutiny several times over the past 5 years for not properly accessing customers and their gambling/financial risk factors. This has amounted to over £17 million in fines. They have also been recently reprimanded for misleading online gaming ads.

A government gambling ‘white paper’ was supposed to be released last year but has been delayed because of government changes. It is expected to be released in the next 2 months, with a balance of industrial and consumer interests, which could further hinder the growth of 888 in the UK.

888 Holdings CEO Exits the Business

Amid all the doom and gloom surrounding 888, is the recent exit of CEO, Itai Pazner, which has complicated the company’s unstable position as reported earlier in the week via the iGaming Business News story here on Casinoplusbonus.

Itai Pazner worked his way up the ranks of the company for 20 years but stepped down on 30 January 2023. This was shortly after best practices were not followed regarding a number of Middle Eastern accounts.

Was the resignation related? Whether the Middle Eastern AML investigation is the reason why he stepped down or just a final nail in the coffin for his own personal reason, I am not sure, and I wouldn’t like to speculate.

Closure of VIP Accounts in the Middle East Cost 3% in Revenue

For now, the VIP accounts are suspended after anti-money laundering regulations were not adhered to. 888 discovered the discrepancies and started an internal investigation, which the Gibraltar gaming commission is reviewing. The result of the investigation will not be known for some time but because 888 is cooperating, its license will not be suspended in the meantime.

The closure of these VIP accounts is about 3% of 888’s total revenue, which executives say shouldn’t affect the bottom line. To quell investors, CFO Yariv Dafna, will stay on until the end of 2023 and chairman Lord Jonathan Mendelsohn will be interim CEO until a replacement can take over. The outlook for 888 Holdings appears bleak for the near future, with the William Hill debt, inflation rates, and investigations… but the company has been in business for over 20 years and has a good foundation and a sound strategy that could see the stock price rise.

What’s Next? The full-year financial report is due in March and it should reveal a strong Q4 despite initial figures, and a substantial boost in revenue from World Cup betting. Also, there are signs that the global economy is rebounding and 888 could benefit from this trend. We will have to wait and watch how the most recent probe will affect 888 and how the market will respond to its annual financial report.