888 revenues leap 13% on back of sports and casino growth

888 Holdings this morning posted a 13% year-on-year rise in 2016 revenues after the firm benefited from increased marketing investment around its casino and sports verticals.

Total revenues for the 12 months ended 31 December were US$520.8m (£418.6m), up from $462.1m in 2015, although on a constant currency (cc) basis this was up by 18%.

Group EBITDA, which was adjusted to reflect a number of exceptional costs, increased 12% to $90.2m (£72.5m), or 24%cc.

The operator’s flagship casino product grew by 21% to $279.3m (£225.5m), or 26%cc, while its burgeoning Kambi-powered sports division was up 49% to $51.9m (£41.7m), 58%cc.

Casino and sports received additional marketing resources during the year, particularly the latter around the 2016 European Championships, with total marketing spend as a percentage of net revenues up from 30% to 33%.

The fly in the ointment was its poker business, which was down 3% year-on-year to $84.4m (£67.8m), although the company said this “outperformed” a declining market and highlighted first time depositors were up 6%.

Bingo was down a reported 5% to $41.8m (£33.6m), although on a cc basis the vertical actually grew by 7%.

The large bulk of 888’s revenues came through its B2C division which delivered 15% growth to $460.2m (£370m), or 20%cc, however, its B2B arm declined slightly with reported revenues down from $62.7m in 2015 to $60.7m, despite 23 new skins being launched on its Dragonfish platform (although up 6%cc).

888’s proprietary mobile platform was a major contributor of growth with handheld devices contributing 60% of UK revenues, up from 47% in 2015.

Meanwhile the firm said Spain had become the operator’s second largest market after witnessing growth of 45%, while the addition of sports in Italy saw revenues in that market increase by 66%.

888 CEO Itai Frieberger described 2016 as “another fantastic year” for his firm, “underpinned by further outstanding progress in casino and sports across regulated markets” – revenues from regulated markets were up 17%, making up 61% of the total, up from 59% the previous year.

Frieberger also said trading in 2017 had started well and had one eye on new market entries.

“Current trading since the start of the year remains healthy with average daily revenue more than 11% above the previous year at constant currency,” Frieberger said.

“888 is a fast-growing operator with the majority of its revenue now generated from regulated markets.

“The Group is truly diversified with successful operations under 10 licences, four established B2C product verticals and an outstanding B2B offer.

“Underpinning 888’s success we have a leading-edge technology platform and an exceptionally skilled team. I would like to take this opportunity to thank everyone across the business for their commitment and hard work.

“The Board continues to see a number of significant growth opportunities for 888 both in new and existing markets and we look forward to another exciting year of progress.”

888’s share price was up almost 8% to 252p after early morning trading.