William Hill-owner 888 Holdings shares fell over 14% on Wednesday after the company said that a move away from the dotcom markets and increased gambling red tape caused a drop in revenues in 2023.
In a post-close trading update, 888 Holdings said that it expects full-year revenues for 2023 to fall 8% year-on-year to £1.7 billion ($2.1 billion), which the operator said was driven “primarily by a proactive mix shift away from dotcom markets.”
International revenue dropped by 16% while UK revenue fell by 8% year on year. 888 noted that this was due to tightened gambling regulations. However, the firm said about 5% of its full-year revenue was not generated from regulated and taxed markets.
The gambling giant’s forecast of its 2024 profit is at the lower end of market expectations, owing to heavy investments in Artificial Intelligence (AI) and higher marketing costs. Shares in the gambling firm were down to 72.85 pence at 0831 GMT, the biggest loser on the FTSE small cap index.
CEO Per Widerström said: “We are now taking rapid actions to position the group for future success, reducing our overhead costs and freeing up funds to invest in growth based upon our new strategy and value creation plan.”
Cost-saving programme launched
The gambling giant said it has initiated a £30 million ($37.9 million) cost-saving programme to support higher marketing spend through 2024, although investments will still be made in the area of AI-powered data and insights.
“With… £30m additional cost savings announced today, we sense a step change in urgency,” Jefferies analysts said in a note retrieved by Reuters. Adjusted core profit for the 12 months through December 2024 is expected to be between £340 million and £370 million ($430.9 million to $468.9 million), according to an analyst consensus compiled by the company.
However, the betting firm said it was positive about 2024, backed by consistent growth in active players in both the UK and international segments and also improved average revenue per user.
