888 Posts Record Earnings Despite Revenue Decline in 2018

888 Holdings PLC, which earlier this month acquired BetBright for £15 million, reported that the company hit record EBITDA in 2018. Although they had a slight revenue decline during the 12 months of last year…

…EBITDA numbers are looking good.

More specifically, 888 hit $549.6 million, which is a 2% drop comparing to 2017 when the company’s revenue was $541.8 million.

A Drop in Numbers

During 2018, 888 saw a revenue decline in both B2B and B2C businesses. For example, B2C revenue was down by 2% year-on-year to $479.3 million…

…while revenue from their B2B arm, Dragonfish, fell 8% to $529.9 million.

Also, the operator’s B2C arm had an extreme drop in poker revenue. It dropped 37%, which is down to $49 million. Revenue from bingo also slipped 17% to $32.4 million in 2018.

But, it’s not all that bad. On the other hand, casino revenue was up 8% during 2018 and came up to $317.6 million, while the sport was up 6% to $80.3 million.

888 officials said that Dragonfish had problems because of many factors, like overall fiscal and regulatory challenges facing the UK bingo market, reduced marketing…

…as well as ending the contract with former B2B partner Cashcade, because they decided to move its brands to GVC.

EBITDA Looking Good

But, although 888 had some slight drops, they managed to boost their earnings by cutting back on many expenses. For example, operating expenses fell by $1m to $137.8m, while research and development expenses were down from $35.4m to $32.8m.

The company also had lower selling and marketing expenses during the 12-month period in 2018 at $155.0m, compared to $162.5m in 2017…

…while istrative expenses went from $29.2m to $27.3m.

Also, 888 paid less in gaming duties, with the total down from $75.2m to $69.9m. Because of all this, 888’s EBITDA jumped to $107.1 million in 2018, which is 6% more comparing to 2017 when EBITDA was $100.7 million.

Adjusted profit before tax saw also an 11% year-on-year rise to $86.7m, while the company also posted a profit before tax of $108.7m and that is a significant increase comparing to $18.8m in 2017.

CEO Pleased with the Results

888 Holdings CEO Itai Pazner, that became the head of the company in January of this year, said that he is happy with the results.

“Despite headwinds in some areas of the business, the financial performance in 2018 was resilient and we achieved a record EBITDA outcome for the year. The group achieved continued growth across several regulated markets, primarily in Continental Europe, underpinned by good momentum in casino and sport,” Pazner, 888 CEO said.

He also said that he is positive about plans for 2019 and that 888 will certainly see a huge growth in the future.

“The positive momentum at the end of 2018 has continued into the first quarter of 2019 with average daily revenue in 2019 to date up 10% compared to Q4 2018 reflecting improvements across major KPIs,” Pazner added.

“Underpinned by the strength of 888’s technology and the significant strategic progress made by the group over recent months, the Board continues to see a number of significant growth opportunities for 888 in both new and existing markets,” he concluded.

Source:

“888 posts record earnings despite revenue decline in 2018”, igamingbusiness.com, March 12, 2019.