888 bullish about 2013 after profits rise 80%
B2C offering now contributes more than 87% of group revenues after double-digit increase.
888 chief executive Brian Mattingley has described 2013 as “A year of significant opportunity” after the operator saw its 2012 pre-tax profits rise by more than 80% year-on-year.
Revenues from the operator’s B2C division also experienced double-digit year-on-year growth, rising 16% to US$329.8m, meaning the division now contributes 87% of group revenues.
While B2B revenues remained flat, the $46m total representing a 2% drop on 2011’s figures, Mattingley claimed 888 “[Has] got the right deals in place, both B2B and B2C, to gain a substantial foothold in the US.”
This month saw the operator confirm a US-facing B2B deal with Nevada-based Treasure Island, while on Monday it announced a joint venture with Avenue Capital Group “ described by Mattingley as “the final piece in the jigsaw” for 888’s US offering “ which will lead to the launch of 888Poker in the United States.
This follows the admission from Caesars Entertainment chief executive Gary Loveman last month that the Nevada-licensed casino operator could move away from its B2B deal with 888 and pursue the launch of its own proprietary online poker platform developed via Caesars’ dot.fr partner Barrière.
888 was recommended for a licence in Nevada earlier this month, and Mattingley said the operator’s strength in the regulated Spanish and Italian markets stands it in good stead for a potential US entry.
“Our performance in Spain and Italy indicates that we have a compelling offering marketed in such a way that we are able to build significant market share in newly regulating territories, something that places us in a very exciting position as the US market begins to open for business,” said the CEO.
He also cited the operator’s partnership with WMS, announced in February 2012, which will see 888 allow the American business to offer its poker platform to partners in the US.
The FY 2012 revenue growth came largely as a consequence of strength in B2C poker and casino, with both verticals achieving double-digit revenue growth compared to the previous financial year.
888’s emerging offering, including the operator’s first real-money offering on Facebook, also demonstrated strong growth with revenues up 16% year-on-year to $25.2m. A second RMG offering on Facebook “ and the first by anyone in the casino vertical “ followed last week.
Bingo revenues were down 4%, though 2012 saw the operator pay the final consideration relating to the 2009 acquisition of Wink Bingo after being forced to reschedule payments for the business in 2011.
Analyst James Hollins of Investec issued a ‘Buy’ recommendation, noting that “The short-and longer-term outlook for 888 has been significantly enhanced following recent agreements and developments in the US.”