888 restores dividend after strong H1
B2C poker and casino continue to thrive while Spanish poker revenue has doubled since move to dot.country.
The board of eGaming Review Power 50 operator 888 has approved the issue of a US¢2.5 dividend following a strong set of first-half results highlighted by a year-on-year overall revenue rise of 21%.
Described as “significant” by analyst Simon Davies of Canaccord, the move comes on the back of a particularly strong performance from the company’s B2C poker and casino offerings.
Poker continues to thrive for the operator and has done so since the launch of its Poker 6 platform last year with revenues rising 72% year-on-year to US$41.2m for the six months ended 30 June. The vertical is also providing growth in the newly regulated Spanish market, where 888 enjoys a 24% market share “ second only to PokerStars “ seeing poker revenues double since the switch from dot.com to dot.es earlier in June.
Chief executive Brian Mattingley said in a statement: “The second half of the year will see increased investment in Spain, where we will attempt to build on our impressive market share, and also in the United States, where we are preparing for regulatory changes.
“We will also continue to invest in our technological platform, the cornerstone of our offer, and make improvements to our mobile channel,” added Mattingley, for whom this was the first half-year report since his permanent appointment as CEO in March.
The results brought about a complete change of opinion from Investec, the firm moving from ‘Sell’ to ‘Buy’ with analyst James Hollins explaining “Although regulatory and tax issues remain, the cornerstone of our historic bear stance, we regard the business improvements as tangible and long-term.”
Analyst Ivor Jones of Numis also issued a ‘Buy’ recommendation, saying in a note this morning “The payback on relationships and investment in the US remains uncertain but the success with poker in Spain shows the benefit of being ready for a new market opening.”
888 signed a partnership with WMS last month to augment its existing Caesars agreement, however Jones seemingly recognised the continuing uncertainty with regards to regulation in America at either federal or intrastate level.
Meanwhile Nick Batram, analyst with Peel Hunt, downgraded his firm’s recommendation from ‘Buy’ to ‘Hold’ on the grounds that the target price for 888’s shares had almost been reached. “The recovery in profits over the past 12 months has been spectacular and, whilst we expect company guidance to remain conservative, growth will be more challenging going forward,” Batram explained.