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Bingo does well for 888
888 is a big player in the world of online gaming & internet gambling, but that has not prevented it from having to issue a profits warning. On a positive note, 888’s online bingo operations was a bright spot amidst the doom and gloom of their earnings warning.
Shares in the 888 company dropped 20% in early trading, falling to 55.5p which valued the company less than £200 million. A spokesman for 888 holdings said they had “revised its outlook for the remainder of the year and now expects profit to be significantly lower than previous market expectations”.
The company has seen it’s online poker sites suffer a huge fall in player numbers; real money ring game players falling 18% from January to May. 888 attributed this though to a general decline in player numbers throughout the online poker industry, and not to a decline in numbers for just their poker brands. They also felt that the weak euro and sterling against the dollar contributed to a decline in profitability, as did the forthcoming World Cup.
In contrast to this though – bingo, which includes wholly owned brands 888 ladies Bingo, Posh Bingo and Wink Bingo, and the software behind sites such as Think Bingo, Foxy Bingo, UK Bingo and Bingo Ireland has showed good results in the internet bingo market, and had avoided what 888 call a “a difficult trading environment”.
This news is bound to increase pressure on Gigi Levy, the Chief executive who was appointed in January 2007 and has since seen shares in the Gibraltar-based company suffer a sharp decline. Analysts believe the company is now ripe for a takeover, naming Ladbrokes and Bwin as possible candidates. One analyst said: “None of this should have been a big surprise to the market but we think Gigi is reducing expectations now so that the company is re-rated and the share price gains some upward momentum, rather than constantly drifting downward.”
Despite all this, 888 stated that they believe the online gaming industry would continue to consolidate and they are well placed to make acquisitions.
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