888's CFO steps down from role after company reports 3% revenue decline in FY22

Betting company 888 announced its finance chief will leave the company after posting a drop in revenues. CFO Yariv Dafna is expected to step down from his role at the end of March. The company said in a statement released Friday that the decision was “mutual," and confirmed it has begun a search for his successor.

The news comes after Dafna served two years in the position and presided over the company’s GBP 1.95 billion ($2.3 billion) purchase of rival William Hill’s operations outside the US, which included 1,500 UK betting shops and online operations in markets such as Italy and Spain. 

Chief executive Itai Pazner said he played a “crucial role in the completion of our transformational combinations with William Hill," reports Financial Times. However, the Gibraltar-based gambling group took on substantial debt to finance the deal, which has led to investor concerns as interest rates have risen over the past year.

Revenues fell 3% to GBP 1.85 billion ($2.2 billion) in the year to the end of December, despite being lifted by the FIFA World Cup in the final quarter. Meanwhile, online revenues were 15% lower year on year at GBP 1.33 billion ($1.6 billion), hampered by a tightening of UK online player safety measures and the temporary closure of 888’s Dutch operations following the loss of its local license. 

Itai Pazner

“We continue to see pressure on our UK online revenues from regulatory change including the ongoing impact of the enhanced player safety measures,” confirmed Pazner. “We remain focused primarily on successful integration, execution and deleveraging in order to unlock the potential of our enlarged business.”

888’s gross debt stood at GBP 1.8 billion ($2.1 billion) at the end of the year, with about 70% of interest rates fixed for the next three years. The company has vowed to cut net debt from more than five times earnings to 3,5 times to increase revenues to GBP 2 billion ($2.4 billion) by the end of 2025. 

Shares in 888 slipped by 4% in early trading to just below 90p. The betting company’s stock has lost two-thirds of its value in the past year. However, its outlook for 2023 remains unchanged, according to the business. 

Analysts at JPMorgan Cazenove flagged “outsized leverage and integration risks” stemming from the acquisition of William Hill’s operations outside the US and “uncertainty related to the cost of living crisis from a consumer standpoint and the UK gambling review."