888 Holdings Announces Fall in Profits Due to UK PoC Tax and New VAT Rules
The introduction of a Point of Consumption (PoC) tax in the United Kingdom and Europe's new VAT regime are cited as the two main causes for a 17 percent fall in EBITDA reported by 888 Holdings in the first half of 2015.
According to a document titled "Half Yearly Report for the six months ended 30 June 2015' released by 888 Holdings on Friday, the company's revenues suffered a two-percent decline compared to the same time in 2014. Part of this has been caused by the $5.1 million spent in VAT charges in Europe and the $14.4 million in expenses generated by the introduction of the PoC tax in the U.K.
Despite being the parent company of the world's second largest poker room, 888poker, the company has reported a four-percent drop in its poker revenues, which moved from $48.1 million in the first half of 2014 to $46.2 million in 2015. That said, 888poker experienced an increase in the number of players on the platform, which rose by four percent compared over 2014.
However, things did not go much better for bingo, as the game suffered a six-percent drop with revenues dipping from $24 million to $22.6 million.
888 has again delivered a very encouraging performance in the first half of 2015 driven by our quality brands, best-in-class technology, and CRM expertise.
The first half of 2015 has not been all doom and gloom for 888Holdings as the group has reported positive numbers coming from its casino and "emerging offering" operations, which include the company's sportsbook, 888Sports.
Business-to-Customer 888Casino operations have reported a one-percent growth compared to 2015 with revenues moving from $107.6 million to $108.7 million, while things went even better for the company's emerging offering, which have reported a 41-percent revenue increase with revenues up to $18.5 million from the $13.1 million reported in 2014.
To contribute to the company's positive performance in the casino vertical, 888 mentioned a 22-percent increase in its customer base due to its innovative CRM and premium content, as well as the launch of online slots in Spain, and the progresses made in Italy's regulated market.
On the positive side, 888 also reported an increase in its customer base, as the group now counts 19.2 million real money registered accounts across casino, poker, and sports, with this number representing a seven-percent increase since the end of December 2014.
Meanwhile, mobile gaming has also reported a significant growth, with the company revealing that mobile now accounts for 43 percent of its UK Gross Gaming Revenue (GGR).
"I am delighted to report that 888 has again delivered a very encouraging performance in the first half of 2015 driven by our quality brands, best-in-class technology, and CRM expertise," the Executive Chairman at 888Holdings, Brian Mattingley said.
"Operational progress has continued with strong increases in active players and first time depositors despite the external headwinds of a new point of consumption tax in the UK, VAT in certain European markets and adverse currency movements."
Mattingley welcomed the fact that, on a like-for-like basis, the group's revenue was up by nine percent year-on-year, with the growth "driven primarily by sustained strong growth in casino and exceptional momentum in sport, which recorded a revenue increase of 81%."
According to the group's Executive Chairman, the company's board "remains confident of achieving its full-year expectations," thanks to 888's "strong operational momentum as well as 888's core strengths of technology and CRM leadership. We are well positioned to deliver long-term sustainable growth and look forward with confidence as we continue to develop the business."
All things consider, 888's future looks bright, especially if they're successful in their bid to acquire the bwin.party Group.