Despite pledging a special dividend of 7ȼ a share - which together with the regular dividend will equate to a payout worth roughly $50m - 888 Holdings (888) claims it has "a clear buffer" against the costs of the long-anticipated Point of Consumption (PoC) tax later this year. Judging by a strong set of year-end results - the online gambling company reported revenue growth from poker and casino products of 7 and 15 per cent respectively last year - and a closing net-cash position of more than $100m (£60.50m), that looks fair.
Chief executive Brian Mattingley expects the PoC tax to be introduced at the planned rate of 15 per cent, but probably not on time. If introduced in December as planned, however, he says a challenge by online gambling companies would be valid given that the tax "does nothing to additionally protect consumers".
Last week’s Budget did something to sooth the pain inflicted by the PoC tax by reducing bingo duty from 20 per cent to 10 per cent. That should help revive 888's ailing bingo business - revenues from the game plunged 16 per cent last year. Mr Mattingley says the change is "a good measure" coming "far too late".
Brokerage Numis expects pre-tax profits of $62m for 2014, giving EPS of 16ȼ - flat on $61m and 16ȼ in 2013.
| 888 HOLDINGS (888) | ||||
|---|---|---|---|---|
| ORD PRICE: | 147p | MARKET VALUE: | £517m | |
| TOUCH: | 147-148p | 12-MONTH HIGH: | 187p | LOW: 134p |
| DIVIDEND YIELD: | 2.9%** | PE RATIO: | 17 | |
| NET ASSET VALUE: | 50ȼ* | NET CASH: | $116m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2009 | 247 | 27.6 | 7.2 | 4 |
| 2010 | 262 | 10.6 | 2.3 | nil |
| 2011 | 331 | 5.8 | 0.6 | nil |
| 2012 | 376 | 40.8 | 10.2 | 7 |
| 2013 | 401 | 53.2 | 14.2 | 7 |
| % change | +7 | +30 | +39 | - |
Ex-div: 2 Apr Payment: 21 May £1 = $1.65 *Includes intangible assets of $156m or 44ȼ a share **Not including a special dividend of 7ȼ a share | ||||
