888 profits leap 27% as mobile revenues almost treble
Group H1 results show EBITDA rose by more than a quarter as 888sport also reports strong growth as revenues increase 102%
888 Holdings posted a 27% year-on-year increase in H1 EBITDA this morning after the operator reported growth across all major verticals and a strong mobile performance in its core UK market.
The operator revealed EBITDA grew to $49m (£30m) for the first six months of the year on the back of a 13% rise in revenues, and said UK mobile-derived revenues almost trebled from 11% to 29%.
Casino, poker and bingo grew by 14%, 3% and 9% respectively to push group revenues to $225m, up from $200m in 2013, as first revealed in the company’s Interim Management Statement earlier this month.
888’s sportsbook showed strong growth across the period, with the vertical’s revenues having doubled (102%), a result the operator attributed to its tie-up with supplier Kambi Sports Solutions in May 2013 and increased marketing spend.
888 chief executive Brian Mattingley, who revealed he plans to take up the position of executive chairman in May 2015, said the company had delivered “another excellent set of results in what has again been a record-breaking period for the business”.
“Revenue growth has been driven by strong performances across both our B2C and B2B lines of business which reflects our exceptional brands, technology, marketing and CRM systems as well as the passion of our highly skilled team,” Mattingley said.
“We are delighted by the turnaround of our improved Bingo business and 888sport has delivered an outstanding performance by more than doubling revenue year on year reflecting the strength of our re-launched offer,” he added.
The UK accounted for 45% of H1 revenues, up from 41% last year, and the firm said it had prepared for the introduction of a 15% UK tax rate in December with “strategies to mitigate some of the financial impact” while it also planned to look at additional markets for growth, such as the Netherlands.
Marketing spend across the six months was down from 36% of revenues to 31% of revenues, although the operator said it expected the ratio of marketing spend to revenues to creep back up to 2013 levels by year end.
Early Q3 trading for 888 was also positive with the company reporting daily average revenues to be 15% up on the corresponding period in 2013.
One negative for the firm was the loss posted by its US-facing All American Poker Network (AAPN), 888’s joint venture with Avenue Capital.
After recording a $4.1m deficit in 2013, 888’s saw its share of the loss increase to $4.4m in H1 2014, which the company attributed to increased marketing activities in New Jersey.
888’s share price had fallen 3p to 127.5p after early morning trading.