888 Holdings has detailed that both its B2C and B2B operations suffered a substantial decline during first quarter trading, citing a number of factors impacting the FTSE250 group’s commercial performance.
Publishing a trading update for Q1 2022, 888 detailed a year-on-year corporate revenue decline of 18% to $224 million (2021: $273m – a percentage decline which was mirrored by its B2C earnings, which fell from $263 million to $215 million.
A breakdown of B2C performance saw betting revenue declined by 42% – attributed by the firm to a 28% decline in stakes as well, increased promotion, customer wins and the closure of its Netherlands business in the latter half of 2021 for regulatory reasons.
The company stressed, however, that its betting revenue had increased 19% with regards to Q4 2021, which it described as ‘a period which saw unusually low win margins’, whilst moving forward CEO Itai Pazner highlighted on 888’s US investments and and the acquisition of William Hill – raised gross proceeds of which stand at £163 million.
“The start of 2022 has been another busy period of progress for 888. We have launched in Michigan and Ontario, with Virginia planned to follow in May,” Pazner remarked.
“Having revised the transaction terms for William Hill and completed an equity placing to part-fund the deal, we are on track to complete in June and continue to execute our plan to build a global online betting and gaming leader.”
Further headwinds saw 888 experience a drop-off in casino earnings, which fell by 14% YoY from $221 million to $191 million, whilst the B2B division also experienced a revenue drop-off of 6% to $215 million (2021: $263 million).
Despite shortcomings, 888’s Q1 revenues did represent a sequential increase on Q4 2021 earnings – betting income increased by 19% quarter-to-quarter (Q4: $20m) and B2B revenue by a small 1% (Q4: $213m), although casino revenue also fell between the two periods by 1% (Q4: $192m).
The group also highlighted its performance in ‘key regulated markets’ such as the US, Romania and Portugal, which experienced revenue growth along with YoY gains in Italy, which provided a bulwark against a decline in its UK earnings.
However leadership acknowledged UK trading difficulties that replicated ‘market wide trends’ as a result of increased player restrictions . 888 amplified its presence in the UK launching its ‘Made to Play’ campaign that unified its B2C brands under one domain.
Outside of Europe the firm completed an investment in 888AFRICA to bolster its position in a ‘long-term investment market’.
In North America, meanwhile, the company was able to secure a licence in Ontario, launch its World Series of Poker product in the state of Michigan and is preparing the SI Sportsbook product for operations in Virginia – to consolidate its standing on the continent, 888 has appointed Howard Mittman as its President of US.
“Alongside these important strategic milestones, Q1 2022 revenue was slightly ahead of Q4 2021 as we previously announced,” 888’s CEO continued.
“I am pleased with the group’s progress, and we are looking forward to returning to year-over-year revenue growth in the second half of the year, as we benefit from further launches in additional US states, together with our expectation of relaunching in the Netherlands and ramping up our recent launch in Ontario.”