888 Holdings PLC (LSE:888) shares rose 10% after it said it expects no further financial impact from the probe into its VIP activities in the Middle East or from the settlement between the Gambling Commission and William Hill for player safety failings.
The gambling operator was updating investors on the issues which have dogged the company in 2023 as it unveiled results for the year to 31 December 2022 and trading figures for the first quarter of the new financial year.
The owner of William Hill and Mr Green said it has introduced robust policies and procedures in the Middle East but sees a £25mln to £30mln revenue headwind for the coming financial year.
It said it currently expects to recover 40-50% of revenue in the region that might have been lost.
Broker Peel Hunt said: "Almost nothing to see here – 888 reports inline results and 1Q23 trading."
But it added: "We see 'no news' from this highly-leveraged business as good news." The broker reiterated its 'buy' recommendation and 150p target price.
Financial year 2022 results were in line with previous guidance with revenue up 74% to £1.24bn and adjusted EBITDA rising 82% to £217.9mln, the company said.
But 888 swung into the red on a statutory basis with a pre-tax loss of £115.7mln comparing to a profit of £59mln in 2021, impacted by exceptional costs and adjusting items of £184.8mln.
On an adjusted basis, pre-tax profit slipped 10.5% to £80.5mln from £89.1mln the year before.
Quarter-one revenue fell 5% to £446mln with adjusted EBITDA seen in line with market expectations.
UK online revenue fell 9%, international revenue dipped 11% but retail performed strongly, with revenue up 8% with both sports and gaming growing.
For the current financial year, 888 expects adjusted EBITDA to be significantly higher year on year with an adjusted EBITDA margin of at least 20%, but 2023 revenue is predicted to be lower than 2022 by a low to mid single digit percentage.
The firm said it remains confident in its 2025 targets of at least £2bn of revenue, an adjusted EBITDA margin of at least 23% and more than 35p of adjusted EPS, with adjusted net debt to EBITDA of below 3.5x.
The company also upped its synergy target to £150mln from £100mln by 2025 and said it is making good progress on its search for a new CEO.