Business

888 Holdings sees YOY decline ahead of William Hill asset transfer

888, the online gaming company in-charge of some of the largest global brands, has reported a huge 18% drop in year on year revenue. Despite being in the process of purchasing all of William Hill’s non-US assets, something it expects to complete before its’ next quarterly results, it saw a marked decline in almost all areas of the business from B2C through to B2B.

   Normally when something like this happens to a listed company, you would expect to see an instant hit to the stock price, but so far, there has only been a small dip in the price of a few percentage points – albeit the longer-term impact remains to be seen. This also needs to be taken in the context that 888 have suffered nearly a 50% drop in their share price in the last 6 months, so a huge drop now could have been prevented by the earlier withering prices.

   So what has brought about this big loss across multiple areas of the business? The betting revenue fall of 42% was the largest impact, while gaming revenue fell by 14% – however heavy investment in promotional activities in the US in Q1 alongside their exit from the Dutch market were just two of the reasons they have attributed this drop to have happened, alongside their admittance of a dip in active players. Their B2B business also took a hit, but this seems largely down to a fall in their Bingo product which is being sold shortly. 

   For a business that has been used to sustaining double-digit increases to growth for many years, could this be the start of a decline for a brand that was once the behemoth to beat in the industry? This seems a little premature when their William Hill deal has yet to start and their promotional costs are unusually high having broken into the US market. While a return to double-digit profit in the short-term may seem an unlikely occurrence, a swift jump back into higher profits seems almost guaranteed with their casino business going strong and such a huge network of casino affiliate sites like this eager to continue pushing their different brands going forwards. 

   For the short-term, even though this quarterly results will seem disappointing and shocking to some people, investors and readers alike should hang tight and wait for their Q2 release, as a quick return to profits is surely on the cards.

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