888’s (888) pre-tax profits more than doubled over the first half, despite coronavirus disruption in the group’s sports betting business. Indeed, the segment posted modest 2 per cent profit growth on a constant-currency basis, which is laudable under the circumstances
The absence of football and horse racing earlier in the year cast a shadow over the whole sector during the lockdown period. But at 888 gamblers instead found interest in typically less popular events: e-sports, darts, and table tennis. As such, the consumer brands managed to bump up first-time depositors (FTDs) by 49 per cent.
And trading is still going on strong – average daily revenue is currently tracking 56 per cent higher compared with the same period last year. Management, therefore, believes that adjusted cash profits will be significantly ahead of initial expectations – indeed, analysts at JPMorgan have upgraded their forecasted revenue growth rate by 15 per cent.
Elsewhere, gaming duties in the period climbed up by more than half as the company grew in regulated markets. Tax rates in Portugal rose by 10 per cent in the period, after a 6 per cent increase in the UK in April last year.
Broker Peel Hunt forecasts adjusted pre-tax profits of $98.5m (£76.7m) and EPS of 22.9¢ in the 2020 full year, compared with $53.2m and 13.4 cents in 2019.
| 888 (888) | ||||
| ORD PRICE: | 256p | MARKET VALUE: | £943m | |
| TOUCH: | 255-257p | 12-MONTH HIGH: | 209p | LOW: 71p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 55¢* | NET CASH: | $108m** | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2019 | 277 | 22.2 | 5.40 | 3.00 |
| 2020 | 379 | 50.9 | 12.4 | 3.20 |
| % change | +37 | +129 | +130 | +7 |
| Ex-div: | 8 Oct | |||
| Payment: | 4 Nov | |||
| £1=$1.28 *Includes intangible assets of $242m, or 66¢ a share **Excludes restricted short-term deposits of $2.7m. NB: There is an additional one-off dividend payment of 2.8¢ per share. | ||||
