Eighth successive quarter of revenue growth for 888
B2C growth continues across poker and casino, while the group's "emerging offering" records a strong Q3.
Continued market-defying poker growth helped 888 to an eighth successive quarter of increased revenues year-on-year, the operator has announced in its key performance indicators for the three months ended 30 September.
The vertical experienced growth of 21% to US$22m, compared to $18m for the corresponding period in 2011, with its improved poker software continuing to bear fruit following its release last year, and on a like-for-like basis (discounting certain poker elements reclassified from B2B to B2C) growth still amounted to 11% year-on-year.
Casino revenues of $38m were up 2% compared to Q3 2011 while income from the operator’s emerging offering (including its live dealer casino) rose 27% to $7m. However, revenues from B2B arm Dragonfish fell by 2% year-on-year, meaning overall group revenues reached $92m, a 7% year-on-year increase.
With average fourth-quarter daily revenues also up 7% year-on-year, chief executive Brian Mattingley said: “We now expect our EBITDA for the full year to be significantly ahead of current market expectations.”
Mattingley also noted that activities in Spain are “Outperforming our expectations” with the operator second in the liquidity rankings behind PokerStars for dot.es poker. Analyst Ivor Jones of Numis noted that “The strength of poker revenues more than making up for declines in casino wrought by regulation.”
First-half numbers revealed that Spanish poker revenues had doubled since the shift from dot.com to dot.es in June, one of the contributing factors in 888 recording 21% H1 revenue growth which prompted the board to restore its dividend in August.
Jones, who retained his firm’s ‘Buy’ recommendation and upgraded its FY EBITDA forecast by 12% to $65m, also noted that “Italy has also done better than expected and the Olympics and Paralympics did not draw away customers in the way they might have done.”
Meanwhile, Nick Batram of Peel Hunt upgraded his firm’s recommendation from ‘Hold’ to ‘Buy’, saying: “The group has moved beyond recovery stage and is now benefiting from underlying economies of scale, with the potential for further margin growth.”