888 Holdings (888) made a return to the dividend list after its consumer gaming business, and poker players, in particular, flocked to play on 888's site. Sentiment has also been helped by a partial opening up of the US market, where the state of New Jersey has authorised online gaming for the first time although management admit the prospect of full US federal legislation is unlikely this year.
The success of poker was behind the 16 per cent increase in revenues at the B2C consumer gaming business. Poker sales surged 44 per cent to a record $87.5m to account for over a quarter of the division's revenues. 888 seems to have been the main beneficiary from the forced closure of US poker sites, a small irony given its own problems with US regulators in the past. Revenues at the B2B business, which provides programming and back-office support to gaming firms, were a shade lower at $46m. Marketing cost inflation was a feature of these results and conformed to an industry-wide trend. The launch into newly regulated markets in Italy and Spain pushed sales and marketing costs upto a record $131m (up from $102m in 2011).
Investec forecasts current year adjusted pre-tax profit of $55.9m and EPS of 14.1¢, rising to $61.4m and 15.7¢, respectively, in 2014 (from $53.9m and 13.9¢ in 2012).
888 (888) | ||||
|---|---|---|---|---|
| ORD PRICE: | 157p | MARKET VALUE: | £549m | |
| TOUCH: | 156-157p | 12-MONTH HIGH: | 182p | LOW: 53p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 42¢* | NET CASH: | $82m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 257 | 40.2 | 10.9 | 5.40 |
| 2009 | 247 | 27.6 | 7.2 | 4.00 |
| 2010 | 262 | 10.6 | 2.3 | nil |
| 2011 | 331 | 5.8 | 0.6 | nil |
| 2012** | 376 | 40.8 | 10.2 | 7.00 |
| % change | +14 | +603 | +1,600 | - |
Ex-div: 15 May Payment: 13 Jun *Includes intangible assets of $148m, or 42¢ a share **Excludes 2¢ special dividend £1=$1.49 | ||||
