888 shares rocket 25 per cent as gambling firm raises full-year expectations
888 shares ballooned as much as 25 per cent this morning as the gambling giant raised its full-year expectations after reporting a 130 per cent hike in profit during the pandemic.
The results
888’s group revenue swelled 37 per cent to $379.1m (£295.8m) in the six months to 30 June, up from $277.3m in the same period last year.
Profit before tax soared 130 per cent year-on-year to $50.9m, helped by a 38 per cent jump in business-to-consumer revenue to $361.3m, as pundits took to their screens for entertainment during months of lockdown around the globe.
Adjusted basic earnings per share grew from $0.067 per share in 2019 to $0.12 in the six months to June.
The group issued an interim dividend of $0.032 per share, plus an additional one-off $0.028 per share bringing the total to $0.06 per share.
888 said adjusted earnings for the full year will be “significantly ahead of its prior expectations”, causing shares to jump 25 per cent to 264p in early trading.
Why it’s interesting
888’s strong spike in revenue came as the group reported growth across the board, including a 48 per cent increase in casino revenue to $260m and a 56 per cent rise in poker revenue to $36.1m.
888’s sport revenue was the only sector to feel the weight of the pandemic, decreasing one per cent to $44.1m as events were cancelled during months of lockdown. The group said it expects sport revenue to rebound as stadium floodlights switch back on, with sport revenue for June up 59 per cent year-on-year.
The group’s US revenue shone brightest on the balance sheet, with revenue hiking by 90 per cent year-on-year following strong growth in New Jersey and robust performances from its business-to-business partners.
888 said it remains “excited by the potentially significant medium-to-long-term opportunities for 888 in the US market”.
The Gibraltar-headquartered firm’s hire of former Tony Blair adviser Lord Mendelsohn as its new chairman last week marked the latest in a string of political appointments by gambling giants seeking to brush up their image.
It comes as the government last week announced it will open full-scale review of the 2005 Gambling Act, following mounting criticism from both MPs and peers that current legislation is “not fit for the digital age”.
Announcing 888’s half-year results today, chief executive Itai Pazner said the betting titan was committed to offering safe gambling.
He added that the firm would roll out its new Control Centre safe gambling feature later this year, offering customers an improved interface to help them better understand their gambling behaviour.
What 888 said
Itai Pazner, chief executive of 888, said:
“888 has performed very well throughout the first half of 2020 with robust year-on-year growth in revenue…This outcome reflects the group’s continued strong levels of customer acquisition, general consumer trends towards increased use of online services especially during the Covid-19 lockdown period and 888’s relentless focus on product leadership.
“We recognised early on that the Covid-19 pandemic would have a material impact on the lives of our customers across many global markets and this required an appropriate response from 888. We were therefore quick to increase our vigilance on safe gambling and preventing gambling-related harm.
“As a result of the group’s continued momentum, as well as its strengths as a product-centric, responsible and diversified operator, the Board believes that 888 has a unique platform to deliver continued strategic progress during [the second half of the year] and beyond.”