Full year results 2020

888 hails operational progress as 2020 revenue grows 51.6%

| By Robert Fletcher
Growth across all business verticals helped 888 Holdings grow revenue 51.6% year-on-year for 2020, though impairment charges for its bingo product hit the operator’s bottom line.
Itai Pazner

Over the year the operator launched its new sportsbook platform, as well as strengthening its casino offering with proprietary content, and deployed a new safer gambling solution for customers.

For the 12 months to 31 December, total revenue amounted to $849.7m (£608.4m/€711.0m), compared to $560.3m in the prior year.

B2C revenue grew 54.5% to $814.3m, with casino by far 888’s primary source of B2C income. Revenue for the vertical climbed 63.3% to $586.8m, helped by the launch of 44 new games via 888’s Section8 games studio.

Sports betting revenue jumped 35.7% year-on-year to $122.1m, driven by the roll-out of its first proprietary sports betting platform.

Poker revenue increased by 47.8% to $63.1m, helped by the launch of its new poker product and a resurgence for the vertical in 2020.

Finally, bingo revenue edged up 9.9% to $42.3m, partially due to the impact of the Costa Bingo acquisition in 2019.

The operator also reported growth in B2B revenue, which increased 18.9% to $35.4m, with both 888’s bingo and US operational segments delivering growth.

Looking at geographical performance, the UK remained 888’s core operating market, with revenue here amounting to $333.5m, or 39% of total revenue.

Revenue in Europe, the Middle East and Africa (EMEA) reached $253.4m, or 30% the group total, while US and the Americas contributed $93.7m, 11% of overall revenue. Italy represented 10% of revenue, Spain 8% and rest of world 2%.

Last year also saw 888 launch its Control Centre, a responsible gambling source designed to offer customers a one-stop-shop for safer gambling tools.

As part of its ‘Safer. Better. Together.’ strategy, 888 also rolled out a safer gambling advertising campaign, and continued to develop its Observer technology to flag and monitor concerning customer activity.

“2020 was a landmark year for 888, with our team navigating the many challenges presented by a global pandemic to deliver record financial results, and significant progress against our strategic priorities,” 888 chief executive Itai Pazner (pictured) said.

“Our product-leadership strategy delivered outstanding results in 2020, with the launch of our ground-breaking [responsible gambling solution] Control Centre, our first ever in-house sportsbook, and a totally new poker platform.

“Our focus on delivering safe, intuitive, content-rich and entertaining products is helping us to deliver a differentiated customer experience and supporting our market share gains in key regulated markets.”

After paying $151.8m in gaming taxes and duties and $135.1m in costs related to sales, 888 posted a gross profit of $562.8m, up 49.4% year-on-year.

Marketing expenses reached $237.1m and operating costs $170.1m, which left the operator with $155.6m in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), up 69.0% on 2019.

However, when including $11.0m in share-based benefit charges, $33.6m in depreciation and amortisation, and $78.2m in exceptional items – the latter of which related to a bingo goodwill impairment charge – operating profit was $32.8m, down 37.1%.

After accounting for finance costs, profit before tax was $26.7m, a fall of 41.1% on 2019’s total. 888 paid $15.4m in tax, leaving it with a net profit of $11.3m for the year, down 72.8% year-on-year.

Looking ahead, Pazner remained upbeat about the operator’s growth prospects for 2021 and beyond.

“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,” Pazner said.

“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.”

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