Gambling company 888 Holdings raises cost savings targets following debt-fueled takeover of William Hill International
- 888 Holdings plans to seek synergies of around £150m from William Hill takeover
- By 2025, the Gibraltar-based company aims to achieve revenues of over £2bn
- His announcement comes ahead of a capital markets meeting in London today
888 Holdings has set stronger cost reduction targets in a difficult market environment and rising debt costs related to its acquisition of William Hill’s non-U.S. business.
The FTSE 250 firm said it would seek synergies of around £150m from the takeover of the bookmaker, compared to a previous target of at least £100m.
It also plans to accelerate next year’s savings target from £54m to £87m and more than double the amount saved from capital expenditure related projects.
New target: 888 Holdings said it would seek synergies with the takeover of the games company of around £150m, compared to a previous target of at least £100m
Tuesday’s announcement by the group comes ahead of a capital markets meeting in London today, where it will launch a new strategy outlining a series of revised financial targets.
By 2025, the Gibraltar-based company aims to achieve revenues in excess of £2bn, earnings per share of at least 35p and reduce net debt to less than 3.5x under-earnings. adjusted underlying.
888 hopes to achieve the BPA target through a combination of sales growth, increased profit margins and reduced debt, the latter of which has increased significantly to fund the acquisition of William Hill International.
Completed in July, the £1.95 billion deal saw 888 take control of around 1,400 betting shops in the UK, as well as European online gambling brands Mr Green and Redbet, of casino operator Caesars Entertainment.
But since the initial takeover announcement in September 2021, 888 said “significant external changes” have led to greater difficulties for the company.
The pandemic-induced surge in digital gambling has faded, soaring energy prices have caused inflation to spike, and the cost of servicing debt has risen as interest rates rise. interest skyrocketed.
In a third quarter business update published last month, the company estimated cash interest costs to be around £170 million next year, down from a previous forecast of £130-140. million pounds.
At the same time, he blamed new gambling safety regulations in Britain and the closure of operations in the Netherlands for a drop in overall turnover.
Since the release of those results, 888 said its betting revenue had been “slightly below expectations”, although trading was “largely in line” with expectations.
In a “strategic framework” intended to improve performance, the company wants to focus on a small set of key markets and integrate the various subsidiaries on a global platform.
Itai Pazner, Chief Executive Officer of 888, said, “We are focused on building a customer-led business with a portfolio of world-class brands that deliver complementary offerings, supporting our ambitions to drive share growth. market share in some of the most attractive betting and gaming markets. in the world.
“This will be enabled by a scalable and unified proprietary technology stack that will underpin our focus on product and content leadership.”
Shares of 888 Holdings were down 1.7% at 101p by late afternoon Tuesday, although their value has fallen by just over half in the past six months.