888 Post-Close Trading Update Suggests Even Better 2020 Results

Online gaming group 888 Holdings issued a post-close trading update to further raise the bar of expectations related to its full 2020 calendar year financial results, following on its December announcement to investors the performance would be above market consensus.

Records in Active Customers and Revenue

Following on the performance post the December 2 trading update, 888 Holdings continued on the same trajectory until the end of 2020, delivering stronger than expected performance across most of its verticals, setting records in terms of number of active customers and revenue in the month.

888 outlined to investors that due to the positive developments in the final month of the year, the group now expects revenue and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to come out moderately ahead of previous estimates.

The December trading update pointed out that 888 readjusted its 2020 revenue forecast due to higher levels of customer acquisition stemming from the channelization from land-based gaming to online gambling. Without giving clear estimates, 888 noted it expected to see a 45% rise of revenues year-on-year, which would lead to 18.5% increase in EBITDA compared to 2019.

888 now outlined the same reasons behind the post-close results-moderation trading update, as well as the positive impact from the launch of new products. Maintaining the strong momentum into 2021, the Board of 888 Holdings noted some headwinds over the coming months could be expected due to the level of macro-economic and regulatory uncertainty in some of the jurisdictions of operations.

Optimistic Future Outlook

Without underestimating the possible hurdles ahead, the Board reiterated its confidence that the company’s outstanding product offering, innovative technology solutions and diversified across globally regulated markets business model, positioned the group to withstand any headwinds and deliver on its plans for further progress.

One factor the Board did not and could not mention but could prove pivotal for the group’s optimistic future outlook is merger and acquisitions (M&A), including the strong opportunity presented by the ongoing completion of the acquisition of UK-based sports betting operator William Hill.

The acquiring company, US casino giant Caesars Entertainment openly stated it had no interest in William Hill’s UK and European business, thus inviting bidders, and 888, which has a history of unsuccessful bidding for these assets, may very well succeed this time.

That potential was among the top factors considered by investment banking company Peel Hunt before including 888 Holdings into its list of companies representing top growth potential for 2021, the only gambling industry operator among all 41 on the list.