Modest Growth at 888 Suggests Different Prospects Depending on the Beholder
Published June 12, 2019 by Lee R
Prognostications aside, the adaptation of powerhouse 888 after H1 is the key dynamic to identify.
Sports betting and casino operations fueled growth at iGaming mainstay 888 for H1.
The Growth
The overall year-on-year increase of 6% for the period covering January 1st to May 18 of this year left 888 stakeholders confident and satisfied, bolstered by key events that included the migration of Cashcade Bingo from its bingo platform and the acquisition of both Costa bingo and AAPN that fueled a total revenue climb of 2% year-on-year.
Drivers
Other key events included increased marketing investment such as the launch of 888’s new Orbit Casino platform, with both developments reportedly increasing customer acquisition a full 20% year-on-year.
Vertical Fluctuates
Sports betting revenue growth won the day with a 29% rise, with casino revenue coming in strong to 13%. Poker lagged with a 28% dip, while bingo remained flat.
UK Contribution
The UK was a particularly fruitful region for 888, showing total revenue increase of 18% on an adjusted like-for-like basis and 8% on a reported basis, faithful to the organisation's UK customer focus where the majority of UK revenue was generated by recreational customers.
Consistent with Projections
The 888 Board calls the H1 results in line with full year expectations.
888 CEO Speaks
Of the solid performance, 888 CEO Itai Pazner confirmed that “888 has enjoyed a solid start to the year with strong momentum in casino and sport across a number of the Group’s major regulated markets. Whilst poker has remained challenging, we were pleased to see an improving revenue trend in Q1 2019 against Q4 2018.”
Highlights
Posner also cited the 20% increase in first time depositors across the group’s B2C business in the period as a reflection of the potential of 888's “outstanding marketing capabilities” and “growth prospects.”
Third Party Analysis
Third party analysis by Regulus was not so sunny, calling 888's mid-single digit top-line growth sub par as “hardly an encouraging performance for a business with global reach,” and called this progress a harbinger of increase in market share losses.
Regulus further expresses the opinion that the UK growth is modest in light of “very easy competition.”
Overall Impact
The battle of perceptions comes after 888 reported record EBITDA in March for the 12 months leading up to December 31, 2018, even while revenue slipped 2% year-on-year to $540.6m (£426.5m/€479.7m).
Outlook
While it stands to reason that 888 would interpret optimistically, the Regulus doubt may turn out to be more concern than actual potential, as the i Gaming market continues to grow overall and market leader 888 has the clout to invest and adapt as necessary.
