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.
888 (888) | ||||
|---|---|---|---|---|
| ORD PRICE: | 61.5p | MARKET VALUE: | £214m | |
| TOUCH: | 61-62p | 12-MONTH HIGH: | 63p | LOW: 28.25p |
| DIVIDEND YIELD: | nil | PE RATIO: | 162 | |
| NET ASSET VALUE: | 35¢* | NET CASH: | $36.8m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2007 | 213 | 38.0 | 10.3 | 6.8 |
| 2008 | 257 | 40.2 | 10.9 | 5.4 |
| 2009 | 247 | 27.6 | 7.2 | 4.0 |
| 2010 | 262 | 10.6 | 2.3 | nil |
| 2011 | 331 | 5.8 | 0.6 | nil |
| % change | +26 | -45 | -74 | - |
*Includes intangible assets of $142m, or 41¢ a share £1=$1.58 | ||||
