(Reuters) – 888 Holdings Plc’s <888.L> shares shot up over 18% after the British bookmaker forecast higher adjusted core profit for 2023 and said it expects to partially recover revenues lost due to its suspension of VIP activities in the Middle East.
Gibraltar-headquartered 888 also said it is cutting costs and focusing on core and growth markets, adding that it has concluded an internal investigation that was launched to probe failure to follow some compliance processes in the Middle East.
The group forecast a revenue hit of 25 million pounds ($31.27 million) to 30 million pounds from the Middle East suspensions and said it has implemented “robust policies and procedures” to reopen accounts and onboard new customers in the region.
888 did not provide a number for its core profit forecast, and reiterated it expected revenue in 2023 to be lower than 2022 by a “low- to mid-single-digit percentage”.
Investment in online player safety measures in the UK and from inflationary pressures have also weighed on the company’s cash generation and profit margins.
The group’s adjusted core profit for 2022 still rose 82% to 217 million pounds as earnings from its William Hill business offset the pressures from elsewhere.
The bookmaker had completed its takeover of betting group William Hill and related companies in July last year.
William Hill was last month handed a 19.2 million pound fine by Britain’s Gambling Commission for failing to protect consumers and stop money laundering. 888 said the issues that led to the fines were related to the period before its ownership.
London-listed 888’s shares were up 18% at 73 pence as of 0850 GMT.
($1 = 0.7996 pounds)
(Reporting by Muhammed Husain in Bengaluru; editing by Uttaresh Venkateshwaran and Devika Syamnath)