Gigi Levy to leave 888
After five years in charge 888 Holdings chief executive Gigi Levy announces he is to leave his role but remain on the company's board - Wink sale not affected spokesman tells eGaming Review.
Gigi Levy, chief executive of 888 Holdings for almost five years, has announced he is to step down to “pursue other interests” but will remain on the board.
In a statement to the stock exchange this morning 888 said its CEO would “commit up to 50% of his time for the next six months” to assist in the transition to finding and handing over his position to a replacement CEO. Pending the appointment, the board said it had asked senior independent director, Brian Mattingley, to “work closely with management on all aspects of the business.”
Last month 888 was forced to spread its payments for Wink Bingo after the strong performance of its acquisition left it unable to settle the full earn-out payment of up to £48.7m due in May. On 18 March the operator said should there be a change of control at 888 before it has completed its payment for Wink “ such as the long-discussed takeover by Ladbrokes “ Daub could compel 888 to sell the bingo business to facilitate repayment, with the same clause being triggered should Levy cease to be on the board of 888 or if the operator defaults on payments.
An 888 spokesman, however, told eGaming Review that Levy’s departure “would not affect the Wink payout as Levy would remain on the board.
He added that Levy had remained in his position “to get the company back on track before leaving to pursue other interests”. It is not known what Levy will do next, however he is involved in a number of other ventures and internet start-ups.
In a statement the 888 board said it had asked its nominations committee to lead the search for a new CEO, while an unnamed executive search firm would also aid the process.
Richard Kilsby, chairman of 888, said: “After a difficult first half of 2010, the company has experienced three consecutive quarters of growth. Following very strong trading in Q1 2011, which has continued into Q2, Gigi has decided to step down, leaving the company well positioned for the future.
“The board would like to thank Gigi for his contribution during his time as CEO. Since the UIGEA ruling changed the industry, Gigi has been central to positioning 888 as one of the world’s most popular and leading online gaming companies.”
Despite the 888 board today suggesting that trading remained “very strong”, in his last announcement as CEO on 31 March Levy announced a poor set of annual results for the business in 2010 with profits before tax falling 56%, however Levy told eGaming Review he remained confident he could push Pacific Poker into the top five dot.com networks for cash game traffic before the end of the year.
“We overtook Microgaming and the International network last year and our next target is Entraction,” he said. “Becoming one of the top five poker networks is more than anyone expected,” he added, noting that overtaking Entraction would leave only iPoker, PartyPoker, Ongame and Cereus ahead of Pacific in the network category.
888’s revenues for 2010 were up $15.4m from $246.7m in 2009 to $262.1m, with a 21.2% drop in B2B revenue explained by the movement of Wink Bingo to the B2C division, a change which saw bingo revenue for the year climb 368.2% to $50.1m.
Profits before tax were down 56% from $34.6m to $15.1m, due largely to poor poker performance in the first half of last year and high marketing costs that rose 35% in a year from $67.3m to $91.5m, 38% of revenues, according to Aviad Kobrine, chief financial officer at 888. Operating expenses, research and development costs, marketing, and administrative expenses rose 15% from $201m in 2009 to $233. EBITDA was down 59% from $45.6m to $28.6.