UK growth prospects remain strong, says 888 CEO
Brian Mattingley says he's confident of UK growth post-PoC and plots further European and M&A expansion
888 chief executive Brain Mattingley (pictured) says the operator’s UK growth prospects remain strong following the introduction of Point of Consumption (PoC) tax in December, and admits the firm has one eye on consolidation prospects.
Speaking to eGaming Review shortly after his company posted a 13% hike in H1 2014 revenues, Mattingley said its core UK operations retained plenty of headroom for expansion, although he conceded the levy would “damage our bottom line”.
“The UK is still a very healthy market for us and our sportsbook shows there is still a lot of mileage to go there,” Mattingley said.
The UK contributes around 40% of 888’s group revenues and Mattingley said one of the operator’s main tasks would be to increase its exposure in other regulated European markets.
888 will soon launch its Kambi-powered sportsbook into Spain which, along with the introduction of slots, should provide a welcome boost to revenues.
Mattingley said poker and sportsbook are also likely to be launched in Italy to complement its sole casino offering while improvements to its mobile product range in both those countries were also a priority.
“The Spanish regulator has just started to re-write the rules for the introduction of slots into casino “ don’t forgot when slots was introduced into Italy our revenues increased by about 60%,” Mattingley said.
“We are also looking very actively at the Danish market,” he added. “It’s only a small market but they seem to be keen at helping businesses out there, it also has shared liquidity. Also, with the Netherlands coming in, which I think will be legalised in 2015, that will help.”
Consolidaton
He added M&A activity could also be on the agenda as 888 waits to survey the potential fallout should operators struggle to cope with the additional financial burden of a 15% UK profit tax.
“We always will look at every opportunity that crosses our desk and we probably see at least 10 a week,” Mattingley said.
“There are potential opportunities as there is an element of consolidation due to the potential fallout from the PoC tax but we must always continue to do things in the right and correct manner to ensure we don’t do things to damage our bottom line.”
“I believe the management team of 888 has got a lot more competencies and capabilities then running just the current business and naturally we will always be talking to people and appraising what’s going on,” he added.
The operator’s Q2 results showed year-on-year growth across all verticals, and Mattingley said he was particularly pleased by the 2% growth in poker and 17% growth in bingo – two areas which had been in recent decline.
Mattingley said its poker performance had “bucked the industry trend” while the “outstanding growth” in bingo was attributed to an operational revamp which took place time last year.
“We now have a [bingo] team in Israel that works together on technology and CRM, so I can see what they’ve been able to do to address the decline from last year and that has been exceptional,” Mattingley said.
World Cup
Sportsbook was also cited a reason for future optimism with the chief executive more than pleased with how the vertical held up during the World Cup.
“We were able to stand proud and hold our own in the face of the big boys and the marketing activities they carried out so I was exceptionally pleased with how the World Cup went,” Mattingley said.
Mobile penetration was also on the increase, particularly in the UK where Mattingley said 888’s “full suite” of mobile products helped revenues grow from 11% to just under 30% while 75-80% of sportsbook acquisition came via a handheld device.
Although the operator partly attributed a 40% growth in H1 B2B revenues to the US activities, Mattingley declined to reveal any KPIs for its US business with the operator due to go into greater depth in a full H1 presentation at the end of August.
But he added that while he was satisfied with current performance levels in the US, the market had been underperforming against what now appeared to be optimistic forecasts.