A few questioned his wisdom at the time, borrowing a billion dollars to scrape up Caesars Entertainment’s cast-offs, and so it’s proved as 888Holdings, helmed by Itai Pazner, has more than struggled to digest its acquisition of the storied British bookies William Hill.
It’s been like trying to run up a hill, burdened by a full stomach of debt, into a prevailing headwind of radical post-pandemic fiscal adjustment, inflation and financial uncertainty.
That’s the reality faced by Pazner this week as he surveys the metrics of his FTSE250 group’s underwhelming H1: Both revenue and profit down, considerably; by 13 per cent and 66 per cent, respectively – revenue sliding, year-on-year, to £332.1 million (US$392.11m/€391.77m); profit crashing, over the same period, to £14.4 million (US$17m/€16.98m).
And adjusted EBITDA was down too in H1, by 29 per cent, to £50 million (US$59.03m/€58.98m), this plunge being attributed, in part, to voracious compliance and marketing spend on 888’s American SI Sportsbook brand.
The group now carries a total debt of £1.8 billion (US$2.125bn/€2.123bn) – thanks, mainly, to the £1 billion bond (US$2.125bn/€2.123bn) underwritten by JP Morgan and Morgan Stanley banks, which helped finance 888.com’s £1.9 billion acquisition (US$2.243bn/€2.241bn) of William Hill’s non-US international assets from Caesars this July.
But across the green baize, like all great poker players, Pazner remains, seemingly, unfazed.
“This combination of two exceptional and complementary businesses creates very strong foundations to support our ambitious growth plans [and] one of the world’s leading online betting and gaming groups with superior scale, leading front-end and back-end technology, increased diversification across products, markets and channels,” said 888’s Israeli-born CEO.
The balance sheet of the wider 888 group in H1 was a summation of loss and gain.
Loss in Holland, where new regulation compelled 888 to pull out of the market, albeit temporarily, and gain in North America where the company has entered Canada’s booming Ontario, the fifth largest betting bazaar in the region.
Africa–with the launch of the 888Africa brand—was also calling.
888’s financial performance in H1 “primarily reflects market conditions in the UK,” stressed Pazner.
But, as he struggles in his Sisyphean task of rolling the corporate boulder up that William Hill, one wonders if he’ll ever find the time to lay a wager in one of his new 1,400-odd betting shops.