After the debt-fueled takeover of William Hill International, 888 Holdings increases its cost savings goals
- 888 Holdings plans to seek synergies of c.£150m from William Hill’s takeover
- By 2025, the Gibraltar-based company aims to achieve revenues of over £2bn
- Its announcement comes before a capital market meeting in London today
888 Holdings has set stronger cost-reduction targets in a challenging market and increased debt costs associated with its acquisition of William Hill’s non-US operations.
The FTSE 250 business said it would seek synergies of approximately £150milllion from the bookmaker’s takeover, compared to a previous aim of at least £100million.
It also plans to accelerate next year’s savings goal from £54million to £87million and more than double the amount saved from capital expenditure-related projects.
New objective: 888 Holdings said it would seek synergies from the gambling firm’s takeover of approximately £150milllion, compared to a previous aim of at least £100million
The group’s Tuesday announcement comes before a capital market meeting in London today. It will unveil a new strategy that outlines a series revised financial goals.
By 2025, the Gibraltar-based company aims to achieve revenues exceeding £2billion, earnings per share of at least 35p and reduce net debt to less than 3.5 times adjusted underlying earnings.
888 expects to reach the EPS target via a mix sales growth, boosting profits margins, and cutting debts. This latter was a significant increase to pay for William Hill International’s acquisition.
Completed in July, the £1.95billion deal saw 888 take control of around 1,400 UK betting shops, along with European online gaming brands Mr Green and Redbet, from casino operator Caesars Entertainment.
However, 888 announced that the takeover was imminent in September 2021.
While the pandemic-induced rise in digital gambling has subsided, skyrocketing energy costs have caused inflation to spike, and the cost to service debt has risen with an increase in interest rates.
In a third-quarter trading update released last month, the company estimated cash interest costs would be about £170million next year, compared to a previous forecast of £130million to £140million.
It also blamed the new gambling safety regulations in Britain as well as the closure of Dutch operations for the drop in overall turnover.
888 reported that its betting revenues were’slightly lower’ than anticipated, but trading was ‘broadly consistent’ with expectations.
The firm has created a “strategic framework” to increase performance. It aims to narrow its focus on a few key markets and to integrate all subsidiaries into one global platform.
Itai Pavner, chief executive of 888, stated: “We are focused in building a customer driven business with a portfolio full of world-class brands that provide complementary offers, supporting our ambitions for market share growth in some the most attractive gambling and gaming markets in this world.
“This will be possible by a scalable and unified proprietary technology stack which will underpin both our product focus and content leadership.
888 Holdings shares They were at 101p in the afternoon Tuesday, 1.7% lower than the previous day, but have fallen by just over half the last six months.