Continued Poor trading Figures Cost 888 CFO his Job
888 Holdings once ran a successful online poker operation in Australia, in addition to providing some of the best online pokies. How the company longs for the return of those days because it is losing ground to rivals in the online gaming world. The London Stock Exchange-listed 888 Holdings this week provided an earnings update to investors. The figures were not what those investors wanted to hear.
Shares in 888 Holdings plummeted by more than 7% in June 2022 after issuing a revenue warning. Those warnings were accurate judging by the end-of-year financials r888 Holdings released to the stock market. Online revenue fell 15% to £1.332 billion, and overall group revenue was 3% lower than last year, at £1.85 billion ($3.25 billion). Although the company’s retail shops saw a 54% revenue increase to £519 million ($911.73 million) .
It is possible to purchase shares in 888 Holdings for £0.9285 ($1.63) per share today, a far cry from the 52-week high of £2.928 ($5.15). Those same shares changed hands at £4.3043 ($7.55) in October 2021. The company blamed regulatory changes on its United Kingdom customers, in addition to withdrawing from the Netherlands. Those enhanced player safety measures include changes to the casino VIP program and limiting player spending on online mobile pokies.
888 Holdings CEO Confirms Chief Finance Officer’s Departure
The recent poor financial performance has cost 888 Holdings’ Chief Financial Officer (CFO) his job. While the official statement does not indicate such matters, it is obvious the man in charge of the purse strings, Yariv Dafna, leaving the company is linked to recent performances. Dafna joined the company in November 2020, but is now out of work.
Itai Pazner, CEO of 888 Holdings, thanks Dafna for his hard work before finding positives in his company’s poor trading results.
“The Board and I would like to thank Yariv for the contribution he has made to 888, including playing a crucial role in the completion of our transformational combination with William Hill, and leading the recent successful financing of 888’s external debt. On behalf of everyone at 888, I wish him the very best in his future endeavours.”
“Revenues during the fourth quarter saw continued strong trading in retail and a robust performance online. As previously discussed, we continue to see pressure on our UK online revenues from regulatory change, including the ongoing impact of the enhanced player safety measures, but I am confident we are building a sustainable leading business for the future.”
UK Regulator Watching 888 Like a Hawk
Gambling companies offering services to British players are under increasing pressure from the UK Gambling Commission (UKGC). The UKGC, the country’s gambling regulator, is keen to stamp out problem gambling. Increased “Know Your Customer” procedures include affordability reports where customers must prove their income sources. 888 Holdings, in particular, is under close scrutiny after several significant failings in recent times.
The UKGC fined the company a then-record fine of £7.8 million ($13.74 million) in 2017 after failing to protect its customers. UKGC slapped a £9.4 million ($16.56 million) fine on 888 Holdings in March 2022, again, for customer safety failings. Some of the responsible gaming mishaps included:
- Allowing a customer a £1,300 ($2,291) deposit cap despite knowing they earned £1,400 ($2,467) per month
- Only checking a customer’s income source after they made deposits totalling £40,000 ($70,500).
- Performing no checks on a customer that lost £37,000 ($65,200) in only six weeks.
The UKGC issued 888 with a final warning, hinting that any future failings came with the real possibility of losing its operating licence. Falling revenues can be turned around but not if you cannot operate legally in one of your biggest markets.
