888 Holdings reports strong 2017 results

Online gambling group 888 Holdings plc has posted its audited annual financial results for the year ended 31 December 2017, highlighting.

* Group revenue increased 4 prcent to US$541.8 million (2016: US$520.8 million) and increased 26 percent in regulated markets excluding the UK;

* Group revenue increased in each quarter of 2017 on a year on year basis;

* B2C revenue increased 6 percent to US$486.6 million (2016: US$460.2 million);

* Casino revenue increased 4 percent to US$293.9 million (2016: US$282.1 million);

* Sport revenue increased 45 percent to US$75.5 million (2016: US$51.9 million);

* Adjusted EBITDA increased 12 percent to US$100.7 million (2016: US$90.2 million); on a constant currency basis, Adjusted EBITDA increased 19 percent;

* Adjusted EBITDA margin increased to 18.6 percent (2016: 17.3%) or 19.5 percent at constant currency;

* Exceptional charges of US$50.8 million were incurred during the period, out of which US$45.3 million relate to potential past VAT matters and US$5.5 million in connection with the UK Gambling Commission (“UKGC”) settlement;

* Substantial free cash flow, allowing for dividend payments during the year of US$70.5 million (2016: US$56.6 million);

* The Board of Directors is recommending a final dividend of 5.9¢ per share in accordance with 888’s dividend policy, plus an additional one-off 5.6¢ per share, bringing the total for the year to 15.5¢ per share (2016: 19.4¢ per share)

* Revenue from regulated and taxed markets continued to represent the significant majority of Group revenue at 70 percent (2016: 71 percent) despite heightened regulatory scrutiny in the UK market;

* Mobile revenue continued to increase across verticals and represented 70 percent of UK B2C revenue (2016: 60 percent);

* Continued strong growth in Spain and Italy, the Group’s two fastest growing regulated markets, with revenue increasing by 34 percent in each market;

* Spain expanded to represent 12 percent of Group revenue driven by significant growth in Casino and Sport as well as increased marketing investment;

* In January 2018, post year end, the Group launched 888poker.it;

* 30 new skins added to the Dragonfish Bingo network;

* Revised senior management structure to support 888’s continued growth with the appointment of Itai Pazner as Chief Operating Officer;

* Regulatory uncertainty exists in certain territories in which 888 operates, including Germany. Following a recent ruling by the Federal Administrative Court of Germany, the Board of 888, together with the Group’s legal counsel, is assessing the status and breadth of its offerings in the German market;

Itai Frieberger, CEO of 888, reported to shareholders:

“888 has delivered another year of progress achieving record revenues of US$541.8 million and a 12 percent increase in Adjusted EBITDA. The Group’s growth was driven by further expansion in Casino, Sport and across regulated markets. This very robust outcome was achieved despite the Group’s withdrawal from certain markets during the year and demonstrates 888’s resilience and agility that is underpinned by first-class technology and an outstanding team.

“The Group has continued to reap the rewards of its investments in recent years in several growth markets including Spain and Italy. These markets helped to drive very strong revenue growth in regulated markets excluding the UK of 26 percent. The Group continues to gain momentum in Sport where revenue increased an impressive 45 percent.

“Current trading since the start of the year is in line with our expectations with average daily revenue 6 percent above the previous year, representing an 8 percent increase when adjusted for the withdrawn markets.

“The Group has a number of significant growth opportunities ahead and the Board is confident of another year of operational progress.”