888 full-year profits fall 40%

888 Holdings has this morning posted a 40% decline in EBITDA, a drop the operator attributed to the introduction of new gaming duties and unfavourable FX movements.

Total EBITDA for the 12 months ended 31 December 2015 was $59.4m (?41.7m) compared to $97.3m (?68.3m) last year, but on an adjusted basis was down 20% to $80.6m (?56.5m).

Total revenues were up 2% to $462.1m (?324.1m) during the period, which the firm said was a 12% increase to $507.7m (?356.1m) on a like-for-like basis.

Current trading in the year to date was “strong”, the firm said, with average daily revenue in the first quarter up 20% on the same period last year.

Revenues from the firm’s B2C operations increased 3% over the year to $406.6m (?285.2m), driven by a 5% rise in its flagship casino which saw reported revenues hit $230.6m (?161.8m).

But its poker and bingo offerings contracted, with each vertical reporting a 6% decline to $88.5m (?62m) and $44m (?30.1m) respectively, including EU VAT charges.

Revenues from the firm’s B2B business fell from $63.9m (?44.8m) to $59.5m (?41.7m) which was attributed to “adverse currency movements”.

The UK Point of Consumption tax saw expenses increase 216% during the period to $50m (?35.7m), including $10.2m (?7.2m) to cover newly introduced VAT charges in some European markets.

Revenue from regulated territories accounted for 59% of the total, up from 55% the previous year while mobile accounted for 47% of B2C revenues in its core UK market.

Newly appointed 888 chief exec Itai Frieberger said it had been a “very successful year” for the firm which maintained its “excellent operational momentum”.

“This strong performance reflects the continued execution of our focused growth strategy as well as the quality of our brands, best-in-class technology and CRM expertise and was achieved despite the significant external challenges that impacted the online gaming industry and our profitability,” he added.

888’s share price was up 2.5% to 186p at the time of writing.