Profits tumble at 888 as Brexit fears and online taxes weigh on gambling firm
The company announced that pre-tax profits for the six months to June 30 slumped 63% to 22.2 million US dollars (£18 Million).
Shares in gambling company 888 Holdings slid after it raised concerns over Brexit and said profits were weighed down by rising online gaming taxes.
The company announced that pre-tax profits for the six months to June 30 slumped 63% to 22.2 million US dollars (£18 Million) against the same period in 2018.
However, the company said its UK business “continued its recovery” as sales accelerated over the period.
Like-for-like revenues over the half year jumped as increases in casino and sports betting revenues, offset a significant decline in takings from its poker websites.
In the UK, total revenue rose 13% to 97.6 million dollars (£79 million), while like-for-like revenues surged 23% higher despite a “stricter regulatory environment”.
The company, which is registered in Gibraltar, raised concerns over Brexit, stating that it “may become ineligible to continue to hold regulatory licenses in certain EU jurisdictions”.
It added that the EU exit could also significantly impact economic and market conditions in the UK.
However, it said trading during the second half of the year to date has hit expectations, with average daily revenues rising by 9% driven by the strong UK performance.
Despite revenue growth, the firm’s profits were significantly weighed down a 19% jump in gaming duties, driven by an increase in the UK online gaming duty from 15% to 21% in April 2019.
Itai Pasner, chief executive officer of 888, said: “The group’s business in the UK has continued its recovery, which was underpinned by exciting product innovation as well as 888’s successful casual customer focus, and further expanded across several regulated European markets including launching its offering in Sweden and Portugal.
“The board continues to believe that 888 is very well positioned for the future as a result of the group’s diversification across products and markets, product leadership, and first-class team.
“888 has a number of exciting growth opportunities ahead which will leverage the group’s new product developments and marketing innovation.”
Ivor Jones, analyst at Peel Hunt, said: “In the face of regulatory pressure, 888 has changed the product and marketing focus of its UK business, restored it to healthy growth and demonstrated the strength of its platform.
“Overall numbers were in line and we are not changing forecasts today but there is plenty about which to be optimistic.”
Shares in 888 holdings slumped 6.7% to 157.4p in early trading.