888 slumps to loss after Gambling Commission fine
Online gambling firm 888 reported this morning that rapid growth in its European markets had offset weaker performances elsewhere and exits from several areas during the first half.
Group revenue grew three per cent to $270.1m (£208.9m), with $242.6m generated by the consumer business, more than half of which is now accounted for by the casino offering.
The group’s business-facing products slipped 15 per cent, bringing in revenue of $27.5m.
Adjusted underlying earnings increased eight per cent to $47.6m. But pre-tax profits swung to a loss of $17.3m.
Revenue in the UK sank three per cent to $105.2m, though the market still makes up 39 per cent of total revenue.
US trading was in line with expectations, revenue remaining relatively flat for the Americas at $22.6m.
But the star of the show was Europe, where 24 per cent growth helped bring in $133.6m. This meant the mainland Europe region for the first time overtook the UK as the group’s most significant market, powered by a 40 per cent revenue spike in Italy and 23 per cent jump in Spain, the largest European market.
The overall growth is despite unusually lower gaming margins and exits from markets including Australia and Poland.
Trading for the third quarter has continued to show signs of growth the group said today, increasing five per cent.
But 888 and other gambling firms could face tighter regulations in the coming months. 888 has already fallen foul of a crackdown on online gambling firms and was fined a record £7.8m for failing vulnerable customers by the UK Gambling Commission’s (UKGC).
Chief executive Itai Frieberger sought to reassure investors that appropriate steps had been taken in his report with today’s results.
“As a business 888 never loses sight of its duty as a responsible operator and we will continue to invest in, improve and develop our responsible gaming tools and procedures to be a leader in the industry.”
But the group did point to Brexit as a potential source of further regulatory complications, especially the ambiguous position of Gibraltar.
“888 is an agile business with an adaptable and entrepreneurial culture and team,” said CO Itai Frieberger.
“Whilst the industry will continue to face regulatory headwinds in the second half of the year, trading in Q3 has started well and in line with the Board’s expectations.
“Underpinned by this momentum as well as the proven strengths of the Group’s business model the Board remains confident that 888 will achieve further progress and deliver its expectations for the full year.”