888 Holdings PLC (LSE:888) warned unfavourable sporting results and the impact of compliance changes have seen revenue drop sharply in the third quarter.
Lord Mendelsohn, executive chair of the William Hill, 888 and Mr Green owner, said the “performance in Q3 has been below our expectations, and this means we now expect to end the year with EBITDA below our prior expectation”.
The group, which was recently promoted back to the FTSE 250, said performance has been “mixed”, with overall revenue for the third quarter expected to be down around 10% to around £400 million.
888 explained the fall reflected the ongoing “significant” impact from compliance changes implemented in dotcom markets, customer friendly sports results impacting win margin across both UK and international markets in September and the ongoing impact of safer gambling changes within the UK.
The betting operator also saw a short-term impact from the change in marketing approach to focus on higher-return marketing.
Retail betting shops continue to perform strongly, with broadly stable revenue, and no change to the expectation of mid-single digit revenue growth in the full year.
The firm expects fourth-quarter revenue to be higher than the third quarter, but lower than a year ago.
Delivery of synergies from the purchase of William Hill were said to be on track and "significant" cost savings are being delivered that have helped to mitigate the year-to-date revenue performance versus initial expectations, 888 said.
Full-year adjusted EBITDA margin is now expected to be approximately 18-19%.