William Hill owner 888 agrees to flog assets as it prepares to exit US consumer-facing business

888 Holdings is transferring a number of assets in the US to online sports betting and interactive gaming group Hard Rock Digital, ahead of plans to exit consumer-facing operations in the country.

The sale of the ailing unit is expected to boost adjusted pre-distress profits by £25m a year from 2025, of which £10m will be reinvested in ‘growth and value creation initiatives’, William Hill’s owner told investors .

888 said the deal was likely to be completed in the fourth quarter of this year and would result in one-off cash costs of £40 million.

888 shares Yields rose more than 4 percent early on Thursday before rising 0.45 percent, or 0.4p, to 88.90p, after rising more than 40 percent in the past year.

888 said earlier this month that it is looking at options to create value for the company, including a sale and controlled exit of its US B2C business, which operates in four US states.

On Tuesday it unveiled plans to change its name to Evoke to reflect its multi-brand model as it shifts its focus to core markets.

The unit, which operates SI Sportsbook and SI Casino in Michigan, SI Sportsbook in Colorado and Virginia and 888casino in New Jersey, operates at a lower profit margin than the rest of 888 due to the significant direct costs of operating in the market.

These include import duties, market access fees and licensing fees, in addition to intense competition from well-capitalized incumbent participants.

In January, 888 tempered earnings expectations for 2024 after heavy investments in artificial intelligence and other automation programs offset the impact of cost-cutting measures.

Boss Per Widerström told shareholders in January that the group was taking “rapid actions” to reduce overheads in a bid to free up cash to invest in future growth plans.

The owner of William Hill launched a £30 million cost savings program in December, but also invested in areas such as intelligent automation and AI-powered data and insights.

Full year revenue was £1.71 billion, down 8 per cent year-on-year, which 888 said was ‘mainly driven by a proactive mix shift away from the dotcom markets, which boosted FY23 revenue by around £ 80 million affected’.

Online sales in Great Britain and Ireland fell by 8 percent to £658 million. The group said this was ‘primarily driven by the impact of changes in safer gambling and a refined marketing approach’.

Retail sales rose 3 percent to £535 million, while international sales fell 16 percent to £517 million.