Betting company 888 warns on profit after tough third quarter

(Reuters) -Betting company 888 Holdings on Thursday lowered its annual core profit expectations after a 10% decline in third-quarter revenue, partly due to tighter regulations in Britain.

The company's shares dropped over 14% in early trade to a more than two-month low of 94 pence.

Britain recently laid out plans to crack down on problem gambling with proposals that would see new limits on online stakes, increased affordability checks on customers and a new statutory levy on betting firms.

"Performance in Q3 (the third quarter) has been below our expectations, and this means we now expect to end the year with EBITDA (earnings before interest, taxes, depreciation and amortisation) below our prior expectation," Executive Chair Jon Mendelsohn said in a statement.

888 said third-quarter revenue was also weighed down by customer friendly sports results affecting win margin across its markets in September, along with the impact of compliance changes in its dotcom markets.

The company, which operates 888casino, 888poker and 888sport among other brands, said it now expected a fiscal 2023 adjusted core profit margin of about 18-19%, down from 20% projected previously. It did not put a monetary value on its profit expectations, nor said what it expected before.

The warning comes as the UK-headquartered company regroups under new leadership after bringing in Per Widerström as CEO in July and Sean Wilkins as finance chief this month.

888 also forecast revenues in the fourth quarter would be sequentially higher than in the third, but down by a mid-single digit percentage year-on-year.

Earlier this week, Ladbrokes owner Entain warned on its annual and third-quarter online net gaming revenues amid the UK regulatory crackdown and slower growth in Australia and Italy.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Dhanya Ann Thoppil and Mark Potter)