888 Holdings PLC (LON:888) have told shareholders that they can remain confident in the year ahead.
The betting firm said that it was confident of further progress in the year ahead, as it forecasted for 2019 earnings to be in line with expectations.
888 alluded to strong performance in the second half of the year, which has driven its full year expectations.
December revenue was particularly strong as this figure hit a new monthly high with progress supported by the success of the Orbit casino platform launched in May 2018.
In the first half of 2019, 888 reported pretax profit of $22.2 million, falling from $60.1 million a year before, on $277.3 million in revenue, down from $283.9 million.
In 2018, the company’s pretax profit was $108.7 million on revenue of $529.9 million.
888 said it was pleased by the first-phase rollout of its Poker 8 platform. The company will add “a number of exciting new product features” and will be rolling out the final-phase platform in 2020.
Revenue in the UK continue to increase, 888 said. Italy put in a continued good performance during the second half of the year aided by the success of Casino, it said.
Spanish revenue was bruised by the launch of competitors shared poker liquidity networks between Spain, Portugal and France.
However, the firm has remained confident to deliver shareholders growth and meet market expectations.
Itai Pazner, Chief Executive Officer of 888, said:
“The Group has delivered solid progress in the second half of the financial year underpinned by continued momentum in Casino and Sport. We are very encouraged by the growth in new customers during 2019 with a record of more than one million new customers signing up to 888’s brands during the year. In addition, we were very pleased to end the year with a record revenue month in December.
2019 saw a number of key strategic developments for the Group including the acquisition in March of a sports betting platform and an outstanding sports team based in Dublin. The Post-Merger Integration plan is progressing in line with expectations and 888 remains on track to launch its first proprietary sport product during the first half of 2020. New product development has remained a key focus and competitive advantage for 888 and the success of our Orbit platform across multiple regulated markets during 2019 has been a major achievement for the Group.
We have delivered a strong recovery in our UK business underpinned by a clear and unwavering focus on entertaining recreational customers in a safe and secure environment. Continuous investment in further enhancing responsible gaming processes and tools across all markets will remain a key focus for the Group.
888 has entered 2020 with good momentum across several regulated European markets and, underpinned by further investment in our team, marketing and product development, we remain focused on achieving further progress in the US. With 888’s core strengths as a responsible operator with outstanding technology and diversification across a number of regulated markets, the Board remains confident of further progress in the year ahead.”
888 and BetBright Deal
In March last year, 888 notified the market that they had acquired a rival in BetBright, which was valued in a £15 million deal.
Under the acquisition, BetBright’s Dublin office is set to be integrated into 888. Additionally, the company will receive complete ownership over its technology and product development across its four key betting verticals – Casino, Sport, Poker and Bingo.
“This acquisition of a high-quality and scalable sportsbook is an exciting milestone for 888. It gives the Group the missing piece in our proprietary product and technology portfolio and will enable 888 to own proprietary, end-to-end solutions across the four major online gaming verticals,” Itai Pazner, the Chief Executive commented in a company statement.
GVC vs 888
The move was to take market share away from leaders such as GVC Holdings (LON:GVC).
GVC who run stores such as Coral, saw their shares up in October as the firm lifted its full year guidance. The owner of the Ladbrokes brand increased its core profits forecast, predicting that they will now lie in the range of £670 million – £680 million for the full year.
In addition to the Ladbrokes brand, which is one of the most recognised in the UK, GVC also owns Coral and bwin.
The Coral brand has become synonymous with UK betting, whilst bwin is one of the leading online betting brands in Europe.
“Online momentum remains strong across all major territories, with NGR up 12% in the quarter despite the prior period containing part of the World Cup,” the CEO added.
“This performance continues to be driven by our industry-leading technology, products, brands, marketing capability, and people.”
Additionally, the firm appointed former Homeserve PLC (LON:HSV) chair as its new non-executive chair. This came at a time where GVC were looking to stimulate business and impose their foot holding in the UK market.
The new appointment, in the form of John Michael Barry Gibson has experience in the industry having held senior positions at firms such as William Hill (LON:WMH)
Certainly, 888 will take a bit longer to fully incorporate changes to make the merger a success.
Shareholders will remain optimistic as 888 have given much reassurance to deliver promising results at the start of 2020.
Shares of 888 trade at 157p (-2.60%). 7/1/20 13:17BST.