888 revenue growth driven by B2C
Q1 group revenue up by 25% year-on-year and up on record Q4 totals.
888 has seen its first quarter revenues rise by 25% year-on-year as it continues to build on record income levels.
The US$94m total is also a 4% increase on the record numbers from the fourth quarter of 2011, the company revealed in its interim management statement for the three months ended 31 March.
B2C was the main growth driver, with Q1 revenues up 29% compared to the corresponding period in 2011 (coming in at $83m), although certain brands previously reported as B2B have since moved over to the B2C side.
In an analyst call this morning CFO Aviad Kobrine called these: “Smaller brands which used to run on our B2B platform and, as part of our overall attempt to clean up the network, we have moved them over to B2C and put the brand owners on a revenue share deal on historical customers.” Nevertheless, B2B revenues were up 3% year-on-year to $11m.
Within B2C poker was the stand-out performer with an 88% year-on-year revenue increase and 14% quarter-on-quarter increase to $21m, while casino (up 26% to $42m) and the company’s emerging offering, composed of sports, live dealer and social (up 14% to $6m) also rose. Bingo was down 5% year-on-year to $14m but this represented a small increase compared to Q4 2011.
Active B2C customer numbers for poker and casino rose by 87% year-on-year to 566,000 for the quarter, bringing the total number of registered real-money casino, poker and sport accounts to 11.3m. This total represents a 23% year-on-year increase.
The operator continues to pursue opportunities in the United States, where it recently extended its B2B partnership with Caesars Interactive Entertainment, and remains in discussions with a number of parties stateside.
Chief executive Brian Mattingley, who was appointed to the post permanently earlier this year, said: “As stated at our full year results, there are significant growth opportunities offered by the liberalisation of new markets, which will take investment to realise.”
In a statement following the publication of today’s first-quarter statement Mattingley said: Our focused strategy has led to another excellent quarter, with ongoing strength in poker driving March to the highest ever monthly revenues in the history of 888.
Nick Batram, analyst with Peel Hunt, retained his firm’s ‘Buy’ recommendation, explaining: “888 has re-established itself as a serious player in the global online gaming industry and we feel that there is much more to come.”
Meanwhile Ivor Jones, analyst at Numis, increased his share price target price from 80p to 100p following the company’s strong revenue performance that he said “makes us more confident of the future profit potential.”