6 March
2024
THIS
ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR
IMMEDIATE RELEASE
888 Holdings
Plc
("888" or "the
Group")
Strategic Review of US B2C
operations
Authentic Brands Group
Agrees to Consensual License Termination for US
Territory
888 (LSE: 888), one of the world's
leading betting and gaming companies with internationally renowned
brands including William Hill, 888 and Mr Green, today announces a
strategic review of its US B2C operations. As part of this
strategic process, the Group will consider all potential
alternatives that can deliver value for the business. Such
alternatives could include the sale (in whole or in part) of the
Group's US B2C business, the controlled exit of US B2C operations,
or other possible strategic transactions.
888 is active in four states, with
SI Sportsbook and SI Casino in Michigan, SI Sportsbook in Colorado
and Virginia and 888casino in New Jersey. The gross profit margin
in the US is lower than the group level, reflecting significant
direct costs of operating in the market including duties, market
access fees, and licence fees, in addition to intense competition
from well-capitalised incumbent participants. The Group has
determined that its current structure will not optimise returns,
and has initiated a strategic review of the operations.
As a result of this determination
and review, the group has mutually agreed to part ways, concluding
its partnership with Authentic Brands Group. This partnership had
granted exclusive use of the Sports Illustrated brand for online
betting and gaming. As part of the termination agreement, 888 has
agreed to pay a fee of $25 million, which will be paid in cash from
available resources. Additionally, 888 will pay an extra $25
million between 2027 and 2029. The termination of this agreement is
expected to result in operating cost savings of approximately $6 to
$7 million per year in 2024 and 2025.
The Group has not set a timetable
for the completion of its strategic review and there can be no
assurance regarding the results or outcome of the review. The
Group's existing B2B arrangements in the US are unaffected by
today's announcement.
Per
Widerström, CEO of 888, commented:
"Since commencing my role as CEO I have been focused on
ensuring the Group is set up to deliver strong value creation in
the coming years. In the US, the intensity of competition and
requirement for scale means huge investment is required to reach
profitability.
Our partnership with Authentic has consistently driven strong
demand for the SI brand across both consumer experiences and
product offerings. A series of record-breaking months for SI Casino
has underscored the strength of the SI brand. However, despite
these successes, we have concluded that achieving sufficient scale
in the US market to generate positive returns within an accelerated
timeframe is unlikely.
The strategic review of our US B2C operations will continue at
pace, and I look forward to updating shareholders on our plans for
the wider Group in late March."
Enquiries and further information:
|
|
888 Holdings Plc
|
+44(0) 800 029 3050
|
Per Widerström, CEO
Sean Wilkins, CFO
Vaughan Lewis, Chief Strategy
Officer
|
|
About 888 Holdings Plc:
888 Holdings plc (and together with
its subsidiaries, "888" or the "Group") is one of the world's
leading betting and gaming companies. The Group owns and operates
internationally renowned brands including William Hill, 888, and Mr
Green. Incorporated in Gibraltar, and headquartered and listed in
London, the Group operates from offices around the
world.
The Group's mission is to lead the
gambling world in creating the best betting and gaming experiences,
bringing unrivalled moments of excitement to people's day-to-day
lives. It achieves this by developing state-of-the-art technology
and content-rich products that provide fun, fair, and safe betting
and gaming entertainment to customers worldwide.
Find out more at:
http://corporate.888.com/
Important Notices
This announcement may contain
certain forward-looking statements, beliefs or opinions, with
respect to the financial condition, results of operations and
business of 888. These statements, which contain the words
"anticipate", "believe", "intend", "estimate", "expect", "may",
"will", "seek", "continue", "aim", "target", "projected", "plan",
"goal", "achieve", words of similar meaning or other forward
looking statements, reflect 888's beliefs and expectations and are
based on numerous assumptions regarding 888's present and future
business strategies and the environment 888 will operate in and are
subject to risks and uncertainties that may cause actual results to
differ materially. No representation is made that any of these
statements or forecasts will come to pass or that any forecast
results will be achieved. Forward-looking statements involve
inherent known and unknown risks, uncertainties and contingencies
because they relate to events and depend on circumstances that may
or may not occur in the future and may cause the actual results,
performance or achievements of 888 to be materially different from
those expressed or implied by such forward looking statements. Many
of these risks and uncertainties relate to factors that are beyond
888's ability to control or estimate precisely, such as future
market conditions, currency fluctuations, the behaviour of other
market participants, the actions of regulators and other factors
such as 888's ability to continue to obtain financing to meet its
liquidity needs, changes in the political, social and regulatory
framework in which 888 operates or in economic or technological
trends or conditions. Past performance of 888 cannot be relied on
as a guide to future performance. As a result, you are cautioned
not to place undue reliance on such forward-looking statements. The
list above is not exhaustive and there are other factors that may
cause 888's actual results to differ materially from the
forward-looking statements contained in this announcement.
Forward-looking statements speak only as of their date and 888, its
respective parent and subsidiary undertakings, the subsidiary
undertakings of such parent undertakings, and any of such person's
respective directors, officers, employees, agents, affiliates or
advisers expressly disclaim any obligation to supplement, amend,
update or revise any of the forward-looking statements made herein,
except where it would be required to do so under applicable law. No
statement in this announcement is intended as a profit forecast or
a profit estimate and no statement in this announcement should be
interpreted to mean that the financial performance of 888 for the
current or future financial years would necessarily match or exceed
the historical published for 888.