888 expects to surpass earnings expectations for 2020
Online gambling operator 888 Holdings has said it expects to post higher-than-forecast earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2020 calendar year, despite the impact of the novel coronavirus (Covid-19) pandemic on its business.
Though 888 is yet to publish its results for the first quarter, an update released on 24 March showed that the operator traded well in the period, and the operator claims this continued in the period from the end of March to 23 June.
Average daily revenue for the entire year-to-date to 23 June was up 34% compared to 2019, which 888 said reflected higher levels of customer acquisition during the second half of 2019 across several regulated markets.
The operator said it also benefited from a structural shift towards online services that accelerated across several consumer-facing verticals in recent months, due in part to the shutdown of land-based gambling as a result of the pandemic.
888 noted a particularly encouraging performance within its poker business, and while sports betting was hit by the cancellation of events due to Covid-19, it saw a better-than-expected customer reaction to the return of competitions in recent weeks. During June so far, the sports revenue run-rate was ahead of June 2019.
However, 888 also said it was mindful of possible headwinds in the second half of 2020 including the potential for a period of prolonged global macro-economic uncertainty that could impact consumers’ spending on its products.
Despite this, the 888 board said it is confident the operator will “significantly” surpass its EBITDA expectations for the full year
“We are pleased with 888’s trading during the year to date which has resulted in the board now anticipating that adjusted EBITDA for 2020 will be significantly ahead of its prior expectations,” 888’s chief executive Itai Pazner (pictured) said.
“This performance builds on 888's strong customer acquisition during 2019 and our continued focus during recent years on entertaining a greater number of recreational customers.”
Pazner also noted that 888 is now in the early phases of enabling some teams to return to its offices, with a number of new guidelines and measures in place to help protect all workers.
“Our global teams have demonstrated fantastic flexibility and commitment as they have had to adapt to new ways of working over recent months,” he said.
“888 is well positioned to continue to benefit from a potential long-term shift towards online services that we have seen accelerate across several consumer industries during the Covid-19 pandemic.”
The trading update comes after 888 in April revealed that revenue increased to a record high of $560.3m (£451.6m/€499.6m) in 2019, but profits fell as gaming taxes and other expenses increased.
Revenue was up 5.7% year-on-year, with 888 saying revenue from regulated and taxed markets represented a record $414.6m of this total in 2019.