888 Holdings Rise on Report
Though profits were down, investors were not rushing to cash out of 888 holdings. Despite a dip in profits, 888 rose sharply in trading today, due in large part to strengthened revenue and strengthened gaming participation among customers.
888 Holdings’ shares rose 2.52% today after their profit report was announced. Their profits were slashed sharply by the new point-of-consumption tax, which saw their UK taxes rise from $2M to $30M.
Though the report had profits cut sharply, down from $80M in 2014 to $40.8M in 2015, the stock rose with the news that its gaming duties rose from $15.8M in ’14 to $50M in ’15, a rise of roughly 216% over the past year.
Though 888 Holdings had a year-over-year profits before taxes dip of 18%, down to $55.5M, the news of 888’s core business growth buoyed the stock, which closed on a high of 187 points.
888’s total revenue grew to $412.5M, up from its 2014 revenue of $270M. 888 rose 38% in Emerging Offerings (up to $41.3M) and saw a 8% rise in their Casino subsection. Both their Poker and Bingo sections were down about 6%, but more than offset by the other news in their report.
888 emphasized strong operational successes in their growing core businesses. Over the past year, 888 has launched a Multistate Poker Network in the United States, while their number of customers rose 13% and their number of active Casino players rose 37%. In terms of global poker liquidity, 888 has maintained position in second place in a competitive field.
888 had to write off $14.6M in professional costs stemming from their failed takeover bid of bwin.party, the online provider of B2B and B2C services. 888 and GVC were engaged in a 4-month bidding process to purchase bwin.party, with GVC prevailing at the end with a cash-and-share offer that totaled an estimated £1.12 billion.
The expansion of online gambling looks likely to continue. Some projections have it rising from $41.4B in 2015 to $56B in 2018. That estimated rate of expansion could have gaming companies like 888 reaping the benefits of market expansion.