888 Holdings H1 profits up as regulation hits UK revenues
By Frank Prenesti
Date: Thursday 27 Sep 2018
(Sharecast News) - Online gambling firm 888 Holdings on Thursday reported a first half swing to profitability despite revenues in the UK falling sharply as the government clamped down on the sector.
Pre-tax profits rose to $60.1m (£45.7m) compared with a $17.3m (£13m) loss in the same period last year.
Revenue increased 5% to $283.9m, boosted by Spain and Italy. In the UK revenue fell 18% to $86.5m "reflecting heightened regulatory scrutiny".
The company said trading during the second half of the financial year to date had been in line with expectations with average daily revenue, excluding the UK, 6% higher year on year, 4% lower overall and an "encouraging" 9% increase in group new customers acquisition.
Casino revenue was up overall by 10% to $161m, while sport revenue was up by 11% to $37.5m.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 10% to $52.4m. EBITDA for the period was $70m, from a $7.3m loss a year earlier.
Basic earnings per share increased to 15.4 cents compared with a loss per share of 5 cents. The interim dividend was lifted to 4.2 cents a share from 4.0 cents.
Chief executive Itai Frieberger said the UK online gambling market "remains challenging and characterised by increased regulatory scrutiny".
"As a result, we have been adapting the way that we operate for the long-term growth of our business by enhancing customer protection practices through innovation and automation as well as diversifying marketing investment into higher growth areas of the business, thereby reducing exposure to any one single market," he said.
Freiberger said there had been "positive trends" in UK revenue since the end of the reporting period.
He added that a repeal of anti-online sports betting laws in the US represented a "seismic change" in the regulatory landscape and would provide "significant growth opportunities".
"Whilst these will require meaningful investment in the near term that will have an impact on group profitability, the longer term potential for 888 is significant in what is likely to become the largest regulated market globally," he said.
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