WORLD CUP DISTRACTION PAUSES 888 DIVIDEND
3 September 2010
But online gambling pick up is starting to
look a little brighter
888 Holdings, which earlier this month warned that its
results may be disappointing (see previous InfoPowa
reports) has had to scrap its interim dividend after the
distractions of the football World Cup in June-July this
year, together with a traditionally slow seasonal
decline and the general economic malaise, impacted
profits.
Pre-tax company profits plunged 44
percent to $8.4 million (GBP5.4 million) for the first
half of the year, the company revealed in a statement
this week.
First half revenues reached $130
million, 10.5 percent up on the same period last year,
but marketing costs escalated by 19 percent to $47.5
million resulting in a 39 percent drop in H1 EBITDA to
$12.6 million.
Results by operational activity
showed that online bingo generated $23.5 million in H1
revenues, whilst online poker again presented a lack
lustre performance, declining to $19.6 million. Online
casino operations fared better, rising to $59.3 million
from H1 2009's $55.9 million.
City financial
media listed other sectors in the UK economy that felt
the pressure of the World Cup including dance studios,
home retail groups and entertainment venues like pubs,
although sales of televisions and home delivered meals
surged.
Some bookies have also reported good
business from the Cup (see previous InfoPowa reports) -
William Hill said the World Cup was "one of the best
for bookmakers in 40 years", as patriotic punters lost
money backing England.
888 Management has reacted
to the downturn by beginning a cost-cutting initiative
to prevent further losses, although CEO Gigi Levy
reported that it was not all gloom and doom, with online
poker revenues picking up 15 percent as the second half
of the year started.
The economies envisaged by
management should result in a reduction in overhead of
$6 million by the time the second half of the year ends,
although the company was not specific about what would
be axed or streamlined.
888's role in
consolidation moves sweeping the industry remains
unclear, with Levy again referring to the possibility in
releasing the H1 results.
"We look at
consolidation as one of the possible routes to realising
our full value and feel that longer term this is the
direction the industry will take. We have always stated
that we will look into all relevant deals and expect the
recent merger news to accelerate such discussions in the
industry," he reported.
He also warned that the
regulated markets in France and Italy should not be
viewed as generating overnight success, but as a longer
term investment that would take time to deliver the full
potential.
Online Casino News Courtesy of
Infopowa
More news here.
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