888 Profits Fall by 41% Despite Revenue Hike
Gibraltar-based 888 Holdings has reported a 41.1 per cent drop in net profit for 2020, from $45.3m (£32.7m/€38.05m) in 2019 to $26.7m at the close of last year.
The crashing profits came despite the firm seeing a 52 per cent rise in group revenue over the same period, from $560.3m in 2019 to $849.7m at the close of 2020.
However, it made significant investments across its offering, including new sportsbook and poker platforms.
The firm reported 73% of group revenue as coming from regulated and taxed markets in 2020.
It reported a 58% growth in regulated markets revenue, with a 63 per cent growth in UK revenues. And a 69 per cent growth in Italy, with new customer growth of 43 per cent.
Meanwhile, the operator continued to scale up in the US. It saw 71% revenue growth in New Jersey, made deals to launch in three new states – taking the total to seven, and just after the year-end has extended its B2B poker partnership with Caesars Interactive Entertainment.
B2C revenue grew 53 per cent to $814.3m, compared to $530.5m in the previous year, with the strongest growth coming from casino, where it saw a 63 per cent rise.
The 888casino product was developed across the year, with the launch of more than 700 new games, including more than 30 exclusive games from Section8, its in-house games studio.
Poker grew by 48% over the period, helped by the launch of 888’s new mobile-first platform Poker8.
Poker’s performance was followed by sport, which reported a 36 per cent rise and finally bingo, which grew by 10 per cent.
Adjusted EBITDA was $155.6m in 2020, compared to $92.1m at the close of 2019, with the adjusted EBITDA margin at 18.3 per cent, compared to 2019’s 16.4 per cent.
Adjusted basic earnings per share of were up to 27.3c compared to 13.5c the previous year, while basic earnings per share were down to 3.1c from 11.3c the previous year.
Final dividend per share was 12c, from 3.0c in 2019, bringing the total for the year to 18c, compared to 6.0c the previous year.
The group closed the year with cash and cash equivalents of $190m, up from $96.9m in 2019.
B2C new customer acquisition increased 42 per cent, with the firm reporting that a record of almost half million new members joined its brands in 2020.
Commenting on the results, CEO Itai Pazner said: “We are pleased with our continued progress in the US, and with three new states set to launch in 2021, we are poised to see the scale benefits of our investments here. We enter 2021 with strong momentum, with a record level of customers, and with a positive reaction to our suite of new products and innovations. As a result, as well as the group’s strengths as a product-centric, responsible, and diversified operator, the board believes that 888 has an outstanding platform to deliver continued strategic progress during 2021 and beyond.”