Another Slump for 888 Financial Climates

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888.com, one of the world’s best-known online gaming companies, have announced their Q2 2010 results On Tueday. 888 Holdings reflect tough six months in the world’s gaming industry, with a Q2 operating income of $61m, a figure unchanged from the same period last year. The first few weeks of Q2 “average daily revenue was approximately 13% below the average for the previous Quarter”, read a statement issued by the company.  

Despite these disappointing results there was good news for the company when their bingo business showed a mighty leap of 372% in total operating income, to $13m. All of which helped to cushion the figures of the operator’s other interests, with Casino Operating Income on $27 million, a 9% fall, and Poker down 36% to $8 million. 

Albeit disappointing Q2 results, first half of the year results seem somewhat better. 888.com upped their total operating income to $130m, up 10%, compared to $118m the prior year period.

Chief Executive Officer Gigi Levy said: “While Quarter 1 saw improvement year on year, B2C trading remains challenging across the product range which is partly influenced by the seasonal pattern. Dragonfish continues to win new deals, most notably via the recently regulated Italian market with bwin Italia and Gioco Digitale. However, revenue from new deals is yet to acquire significant volume. We believe the right steps are being taken to counter the challenges and the board remains confident in 888's strategy.”

Levy was also keen to outline how these ‘new deals’ would impact the operator's performance. “We made the strategic acquisition of Mytopia late in the quarter…complementing our core offering and giving us access to millions of new customers.”

The company operates such well-known gaming sites as 888 Casino and Pacific Poker, yet the competition in the world’s online gaming industry is fierce, with the likes of Party Gaming and Playtech snapping closely at its' heels. Industry insiders say that 888 will have to up their game or risk falling behind in an increasingly competitive market. The results also put 888 as a relatively attractive candidate for a possible acquisition is a consolidating market.

In the words of 888.com themselves, the results were “disappointing”. Considering the results and the decreasing cash balance, the company decided to break their tradition and refrain from dividend distribution to their share holders.

Shares in the company dropped by 4% after the release of the figures, to 36p, and stayed at around 37p since. These figures are a world away from their 52-week high price of 1221.5p. Estimates now value of the operator at around £167 million.