Shares in online gambling company 888 Holdings (888) fell 1.7% to 159p despite record monthly income in December.
After a disappointing first half to its financial year, 888 said in today's trading update that a strong performance in the second half – culminating in last month’s all-time revenue record – means it is ‘confident’ of meeting its full year target for adjusted EBITDA of $85m.
The firm said performance was underpinned by its Orbit casino platform, as well as further revenue growth in sport.
In the UK, its biggest market, income continued to increase which 888 said reflects its ‘sustained focus on engaging with and entertaining recreational customers’.
However its poker business, which proved a big drag on the business in the first half when revenue fell by 24%, ‘remained a challenging market’. Its Spanish poker business in particular struggled after competitors launched a shared poker liquidity network.
The firm did add that it was encouraged by the progress of its new poker platform, Poker 8, while it also saw good performance from the shared liquidity network between Portugal and Spain launched in July to tackle competition in the Spanish market.
Canaccord Genuity analyst Simon French called today's update ‘reassuring’ and expects the firm to hit its 2019 target for EBITDA (earnings before interest, taxes, depreciation and amortisation).
However continued investment in the ‘fast regulating’ US market led French to lower his forecast for adjusted 2020 EBITDA.
Broker Numis also lowered its 2020 forecast given the further investment required in the US.
CONFIDENT OF FURTHER PROGRESS
Going forward, 888’s chief executive Itai Pazner said ‘continuous investment in further enhancing responsible gaming processes and tools across all markets will remain a key focus for the group.’
He added, ‘888 has entered 2020 with good momentum across several regulated European markets and, underpinned by further investment in our team, marketing and product development, we remain focused on achieving further progress in the US.
‘With 888's core strengths as a responsible operator with outstanding technology and diversification across a number of regulated markets, the board remains confident of further progress in the year ahead.’