BERLIN: 888 Holdings has held out the prospect of acquisitions as the betting group announced half-year results on Tuesday, although a penalty for failing to help vulnerable customers contributed to its swing to a loss.
In the six months to June 30, 888 boosted revenues 3 per cent to $270.1m compared with the same period last year, slightly shy of analyst expectations of a $270.6m increase.
On a constant currency basis, revenue increased 9 per cent over the period. Earnings before interest, taxes, depreciation and amortisation rose 8 per cent to $47.6m, just ahead of expectations, while 888 also announced an interim dividend of 4 cents per share.
The gains came even though the company, one of Britain’s biggest online betting groups, left markets including Australia and Poland.
“This pleasing outcome was driven by continued growth in 888’s core casino vertical, strong momentum in the fast-growing 888 Sport and a good performance in Poker,” said Itai Frieberger, chief executive.
Analysts were, however, concerned at a slowdown in growth over the longer term. On a constant currency basis, revenue growth has dropped from 25 per cent in the first quarter of 2016 to 9 per cent, according to Investec’s Alistair Ross.
The company was hit last week with a record £7.8m fine for failings in the way it handled thousands of customers who had sought to restrict their own access to betting.
That penalty, along with a provision regarding a potential tax bill in Germany, brought exceptional charges in the period to $50.8m. Together, they resulted in a loss before tax of $17.3m, compared with a profit of $27.8m a year ago.
Analysts were impressed with the size of the provision taken with regard to Germany.
The company would “defend its position in court if necessary, which is why we believe that this provision is unusually prudent”, said Mr Ross.
Market watchers also remained relieved the company had avoided any more serious punishment from UK regulators, including the potential loss of its licence. With that uncertainty removed, 888 remains a potential acquirer and a key takeover target in the sector.
Mr Frieberger confirmed that the company remained “open for M&A”.
“Today 888 has a very special place in the market and it is very attractive potential partner in the market . . . It doesn’t really matter if we are taken over or take over, from a shareholder perspective it creates value,” said Mr Frieberger.
888 shares were down 4 per cent in afternoon trading at 252 pence.
