888 Holdings Share Value Declines Despite UK Revenue Growth
The online gaming firm, 888 Holdings, witnessed a decline in its share value despite experiencing revenue growth in the UK market, as profitability faced a substantial setback.
The company’s report for the first six months indicated a marginal 2% increase in overall revenue, reaching $277.3 million. However, profits before tax experienced a sharp decline of 63%, amounting to $22.2 million, leading to a negative response from investors.
Subsequent to the publication of these financial figures, 888’s share price fell from £1.67 (approximately $2.06) to £1.53, although it did rebound slightly to around £1.57.
While 888 recorded a 7% expansion in its primary business-to-consumer revenue, with a 6% rise totaling $262.5 million and a 9% increase in casino revenue reaching $175.4 million, other segments encountered difficulties.
Despite sports wagering revenue demonstrating a robust 19% surge to $44.5 million and bingo revenue climbing by 17%, revenue from traditional bingo actually contracted by 3% after adjusting for currency variations.
Poker revenue experienced a considerable decrease, dropping by 24% to $23.1 million, while business-to-business revenue endured a significant 44% plunge to $14.8 million.
Notwithstanding a 14% growth in UK revenue, which reached $97.6 million, several elements adversely affected 888’s profitability. These included the transfer of Cashcade Bingo, the incorporation of the Costa Bingo brand and AAPN, and the acquisition of BetBright for £15 million in March.
Adjusted EBITDA contracted by 20% to $41.8 million, and adjusted profit before tax diminished by 36% to $27.1 million. The reduction in unadjusted pre-tax profit was even more substantial.
Chief Executive Officer Itai Pazner opted to highlight the favorable aspects, asserting that 888 delivered a “resilient performance” during the initial six months of 2019.
The UK division is demonstrably recovering, fueled by innovative offerings and a sharp emphasis on the casual consumer base. This momentum is propelling them into fresh regions, with expansion into multiple regulated European zones like Sweden and Portugal.