Its recent acquisition gamble might have fallen through, but online gaming specialist 888 (888) has organic strength to offer. Chief executive Itai Frieberger says he "doesn't feel the pressure" to do a deal given what he sees as the company's positive attributes. These include in-house development of its games and other online content, the bespoke nature of which attracts users, while the lack of third-party royalty payments protects margins. The former virtue was supported by the 22 per cent rise in first-time customers in the first half compared with the same period last year.
Although sport is one of 888's smaller divisions, it put in a noteworthy performance, with revenue up 63 per cent to $25m (£19m). Increased investment in this segment has paid off, according to chief financial officer Aviad Kobrine. The launch of sport services in Italy helped push revenues in the country up 44 per cent. Casino sales also rose by 30 per cent to $137m thanks to strong performances in regulated markets, including the UK and Spain.
Analysts at Canaccord Genuity expect adjusted pre-tax profits of $69.6m for the year to December 2016, leading to EPS of 16¢ per share, compared with $59.6m and 16¢ in 2015.
| 888 (888) | ||||
|---|---|---|---|---|
| ORD PRICE: | 223p | MARKET VALUE: | £799m | |
| TOUCH: | 222-223p | 12-MONTH HIGH: | 237p | LOW: 143p |
| DIVIDEND YIELD: | 9.3%** | PE RATIO: | 29 | |
| NET ASSET VALUE: | 41¢* | NET CASH: | $143m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 220 | 20.0 | 4.4 | 3.5 |
| 2016 | 262 | 27.8 | 6.1 | 3.8 |
| % change | +19 | +39 | +39 | +9 |
Ex-div: 13 Sep Payment: 6 Oct *Includes intangible assets of $159m or 44.4¢ a share £1=$1.31 **Includes special dividend of 8¢ paid in May 2016 | ||||
