Strong Interim Performance for 888Published July 12, 2014 by Lee R
Forecasters cautiously predict more growth for 888.
888 Shares jumped nearly 5 percent Wednesday, shortly after the online gambling provider announced interim performance expectations would reflect a spike in earnings.
Explanation for Success?
The FTSE 250 company enjoys a market capitalisation at the level of approximately £446.5m, but had little to offer in the way of reasons for the optimistic forecast, aside from asserting that the company “continued to deliver a very strong performance and anticipates announcing ebitda for the period significantly ahead of the comparable period in the prior year.”
Another Strong Annual Pace
The announcement follows upon the strong 2013 showing from the group, at the rate of a 30 per cent rise in pre-tax profit for the year due primarily to strong growth of casino and poker products. Though only half done, the 888 board looks “forward with confidence” to full-year results ostensibly similar or better than 2013.
Investment houses Numis and Investec were both surprised by the forecasts. Numis noted that the “strong across-the-board trading” reported in the first quarter of this year continued into the second quarter. As a result, Numis upgraded its 2014 estimate for full term earnings per share by 8 per cent. Numis further affirmed a “buy rating” for 888 due to the fact that 888 “demonstrated how its operational excellence converts into bottom line success.”
Investec attributed the strong performance to the solid growth that 888 is demonstrating for all core products, but the lack of more information explaining the jump caused the company to place further 888 forecasts and price targets under review.
Those forecasts include an ebitda increase of 10 per cent or higher, translating to an $85.5m increase for for full-year ebitda from $77.7m. Pre-tax profit was projected to rise over $5 million from $54.4m to $59.8m.
Wait Until August
The accuracy of forecasts and ratings will be determined on August 27, when 888's first half results will be made available to the public.