Failed Acquisition of bwin Eats into 888’s Profits

  • 888 Holdings' revenues increased in 2015, but its profits before tax fell by 52%.

888 Holdings, the parent company of 888poker, this week released its financial figures for the year ending 2015 and while total revenue increased so did its overall operating costs, leading to a 52 percent reduction in profit before tax.

Total revenue increased by two percent to $462.1 million despite both bingo and poker revenues falling by six percent each. Operating expenses were reduced by two percent, but gaming duties soared a staggering 216 percent to $50.0 million.

Like other offshore gambling companies, 888 is subject to the Point of Consumption Tax from the United Kingdom’s government, and other taxes such as VAT from countries in the European Union.

The figures also reveal the costs associated with 888’s failed acquisition of entertainment. Under the heading “Exceptional acquisition costs” 888 lists combined costs of $14.3 million, which dented the company’s profit before tax, which fell 52 percent to $32.5 million.

Shares in 888 rose by 3.58 percent to 188.0p per share at the close of trade on March 22, the date of the financial statement. At time of writing, the rise has continued with shares now trading for 192.50p per share.

Itai Frieberger, the CEO of 888, said of the financial figures and current outlook for the company:

“2015 was a very successful year for 888during which we maintained our excellent operational momentum. This strong performance reflects the continued execution of our focused growth strategy as well as the quality of our brands, best-in-class technology and CRM expertise and was achieved despite the significant external challenges that impacted the online gaming industry and our profitability. Like for like Group revenue increased 12% driven by our core B2C business where we delivered an outstanding 13% increase in active players. This again reflected an exceptional performance in Casino and impressive growth in Sport, where we continue to see exciting opportunities on which to further capitalise in 2016.

In line with our strategic focus, we made further progress across regulated markets with growth in Spain, aided by the launch of slots in the first half, Italy, where mobile continues to drive market penetration, and Denmark, where we have seen an encouraging performance following our successful launch in the second half of the year.

This has been another very good year of progress for 888 and I would like to take this opportunity to thank everyone in our team for their fantastic efforts. As expected, 2016 trading to date has been strong with average daily revenue 20% higher than the same period in 2015. With our excellent operational momentum, leading online gaming brands and technology edge, the Board remains confident of delivering long term sustainable growth and we look forward with confidence as we continue to develop 888”

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