888 Holdings Share Value Drops Despite UK Revenue Growth

888 Holdings experienced a decline in its share value following the publication of its interim financial statement, which indicated a decrease in earnings despite revenue expansion in the UK market.

Although the statement demonstrated a marginal 2% year-over-year revenue surge to $277.3 million, profit before tax experienced a substantial 63% reduction, plummeting to $22.2 million. This steep drop is the main catalyst behind the falling share value.

The company’s shares plunged from £1.67 ($2.06) to £1.53 after the preliminary financial outcomes were announced, although they have since rebounded slightly to approximately £1.57.

Examining the revenue figures in detail, 888’s primary offerings witnessed a 7% increase, with business-to-consumer revenue rising by 6% to $262.5 million. This was propelled by a 9% surge in casino revenue, reaching $175.4 million.

Sports wagering revenue also enjoyed a robust 19% climb to $44.5 million. Bingo revenue, while increasing by 17%, actually underwent a 3% decrease in its conventional format when adjusting for constant currency exchange rates.

However, the news was not entirely positive. Poker revenue experienced a 24% decline, falling to $23.1 million, and business-to-business revenue suffered a significant 44% drop to $14.8 million.

888’s profitability was affected by several elements, including the transfer of Cashcade Bingo and the purchases of the Costa Bingo brand and AAPN. The company’s £15 million acquisition of BetBright in March also contributed to the profit reduction, despite UK revenue witnessing a 14% rise to $97.6 million.

Adjusted earnings before interest, taxes, depreciation, and amortization decreased by 20% to $41.8 million, and adjusted profit before tax fell by 36% to $27.1 million. These figures underscore the magnitude of the profit decline, even when taking adjustments into account.

Despite the obstacles, CEO Itai Pazner maintained a positive outlook, stating that 888 delivered a “strong operational performance” during the initial six months of 2019.

The company’s operations in the United Kingdom are experiencing a resurgence, driven by innovative offerings and a concentrated effort to attract everyday consumers. Furthermore, they are making significant strides throughout Europe, penetrating regulated territories such as Sweden and Portugal.