888 Holdings sees earnings 'significantly' ahead of expectations
By Josh White
Date: Friday 26 Jun 2020
(Sharecast News) - Gambling operator 888 Holdings said it expected full year earnings to be significantly ahead of expectations after sales leapt during the first six months of 2020.
Shares in the FTSE 250 company rose by more than 10% on Friday as it reported higher revenues on the back of a return of professional sports and more online gambling as punters stayed home during the coronavirus lockdown.
Average daily revenue in the year-to-date rose 34% year-on-year due to higher customer numbers during the second half of 2019 and a structural shift towards online gaming accelerated by the Covid-19 pandemic.
However, it warned of potential headwinds in the second half of the year due to possible prolonged global macroeconomic uncertainty that could impact consumers' discretionary spending.
Chief executive officer Itai Pazner said that while sport had been impacted by the cancellation of major sports events and fixtures, the company had seen a "better than expected" customer reaction to the gradual return of sports events during recent weeks and, during June so far, its sport revenue run-rate was ahead of June 2019.
Pazner said 888 was "well-positioned" to continue to benefit from a potential long-term shift towards online services that it had seen accelerate across a number of consumer industries during the Covid-19 pandemic.
Brokers at Canaccord Genuity upgraded their full year forecasts for adjusted core earnings by 18% to $100m and maintained a 'buy' rating on the stock, adding that the risks were "on the upside as we take a conservative approach to second half estimates".
"We are encouraged by the medium term outlook as the Covid-19 period has clearly accelerated the structural shift in consumer services to online, gambling included. However, we believe (the second half) may potentially be volatile given the likely weakening global economic outlook as unemployment increases," the brokerage said.
"The global sporting calendar also remains fluid. We anticipate the Netherlands will regulate online gambling during 2021, which we believe will lead to increased tax and marketing expenses."
At 0811 BST, shares in 888 Holdings were up 12.29% at 169.56p.
(Writing by Frank Prenesti. Editing by Michele Maatouk)
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN