The recent repeal of a sports betting ban in the US has prompted UK-listed gambling companies to seek growth in the American market. 888 (888) is no different. The gambling company bought the remaining 53 per cent stake in the All American Poker Network for $28.5m (£21.8m). 888Sport launched in New Jersey in September and 888.com will soon sponsor the New York Jets, an American football team. 888Sport reported a 6 per cent increase in overall sales last year.
Chief executive Itai Pazner called it a "long-stated ambition" to add proprietary sports betting technology to 888, with plans to expand the sports offer on a state-by-state basis as regulation allows. Even so, broker Peel Hunt still reckons 888 will need a partner to truly capitalise on its US strategy.
In the UK, 888 was hit by higher taxes and tighter rules around money laundering and determining the source of funds. Within the B2C division, poker revenue was worst hit, falling 37 per cent to $49m, while bingo sales dropped 17 per cent to $32.4m. The group warned that changing regulation will continue to play "a major role in dictating the future dynamics and size of the global online gambling industry", suggesting such challenges show no signs of abating.
Analysts at Peel Hunt expect pre-tax profits of $63.2m during 2019, giving EPS of 14.8ȼ, compared with $86.5m and 19.8ȼ in 2018.
| 888 (888) | ||||
| ORD PRICE: | 169p | MARKET VALUE: | £617m | |
| TOUCH: | 169-170p | 12-MONTH HIGH: | 327p | LOW: 153p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 44ȼ* | NET CASH: | $75.9m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
| 2014 | 455 | 67.9 | 16.1 | 15.0 |
| 2015 | 462 | 32.5 | 8.3 | 15.5 |
| 2016 | 521 | 59.2 | 14.4 | 19.4 |
| 2017 | 542 | 18.8 | 3.5 | 15.5 |
| 2018 | 541 | 109 | 26.3 | 12.2 |
| % change | - | +478 | +651 | -21 |
| Ex-div: | 28 Mar | |||
| Payment: | 23 May | |||
| *Includes intangible assets of $200m, or 55ȼ a share £1=$1.32 | ||||
