888 deals out record revenues

Last year was decidedly mixed for online gaming company 888 Holdings as it dealt with the fall-out of a failed approach from Ladbrokes, as well as booking more than $25m (£15.7m) in impairment and restructuring charges. However, it is the company's efforts to return to an increasingly regulated US poker and casino market that sent the shares to a 14-month high.

The sharp rise in revenue was driven by a combination of regulatory pressure on US poker sites and 888's heavy marketing spend of over $100m, which helped attract 330,000 new casino and poker players. This was reflected in a 27 per cent rise in casino revenues to a record $148m and 58 per cent growth in poker revenues to $60.6m, well above 2009 levels. The company's emerging offering, which includes the sports book, increased revenue by 35 per cent to $21.6m.

In addition, 888 has started to use its technological expertise to offer gaming services to US partners via its Dragonfish business-to-business division where deals with Caesar's Interactive helped boost revenues by 16 per cent to $46.9m.

Newly installed boss Brian Mattingley said current revenues are running ahead of a record fourth quarter so broker Peel Hunt is pencilling in 2012 adjusted EPS of 5.8¢ and notes the risk to forecasts are on the upside.

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