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888 Holdings PLC on Tuesday said it swung to a loss in the first half of 2023, despite revenue more than doubling, as operating expenses multiplied alongside other rising costs.
The Gibraltar-based betting operator swung to a pretax loss of £45.2 million in the six months that ended June 30 from a profit of 14.4 million a year earlier, even as revenue leapt to £881.6 million from £332.1 million.
Operating expenses multiplied to £400.2 million from £76.2 million.
This was alongside gaming duties more than trebling to £190.9 million from £62.3 million, while other cost of sales almost doubled to £103.1 million from £58.2 million.
Adjusted earnings before interest, tax, depreciation and amortisation multiplied to £155.6 million from £50.0 million, but with depreciation and amortisation costs multiplying to £106.4 million from £12.0 million.
Executive Chair Jonathan Mendelsohn was positive about the results.
‘I am very pleased with the progress we have made in the first half of the year as the group delivered against the plans we committed to at our investor day last year, while also successfully navigating business, market and regulatory volatility,’ said Mendelsohn.
‘We made very strong progress with the execution of our integration plan and we now expect to realise the full £150 million of synergies in 2024, a year earlier than the original plan. Our strong cash discipline and higher profits also enabled a 0.5 times reduction in our leverage.
‘We have successfully delivered against our focused market strategy, changing the mix of our revenue and creating a more profitable and sustainable platform for future growth.’
Looking ahead, 888 expects 2023 revenue to be lower than proforma 2022 by a low-to-mid single digit percentage.
‘The slower than anticipated recovery in the Middle East means revenues are likely to be at the mid single digit end of this range,’ the company said.
Meanwhile, 888 expects adjusted Ebitda to be ‘significantly higher’ on a proforma basis from a year earlier, with an adjusted Ebitda margin of at least 20% for the full year.
Shares in 888 were down 2.3% to 107.10 pence each in London on Tuesday morning.
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