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No dividend from 888
Shareholders in 888 may be feeling a bit disappointed at the moment with the news that the gaming giant has decided not to pay any dividend. This follows on from the poor results from the first half of the year, when profits fell by over 50%. This was partly attributed to the general economic crisis in Europe, along with the World Cup, but either way the company has decided to scrap it’s planned dividend payment in order to save some cash.
Pre-tax profits fell to $4.29 million, which amounted to a drop of 56%. This was largely from the poker side of 888, which was said to be the division most affected by the World Cup. This was despite 888 spending 35% extra on advertising, though they did see a 10% increase in operating income, which rose to $130.2 million.
Gigi Levy, the Chief Executive said; “Our business experienced a difficult first half against the backdrop of a challenging economic environment.” Due to this the board had decided not to pay any interim dividend but will instead invest the money in acquistions, to help the company grow even more.
Each different division in the gaming giant experienced different results. Bingo was the shining star as it’s revenue jumped from $5.1 million to an impressive $23.5 million. This division has several of the most popular online bingo sites around which helped, such as Wink Bingo and Foxy Bingo. Income from the casino saw a 6% increase to $59.3 million. On the other hand poker revenue fell to $19.6 million, down from $26.2 million.
Various city investors have expressed their concern with the performance of 888. Nick Batram of KBC Peel Hunt said; “Our view remains that the inherent value within 888 is greater than the current share price. The problem is realising that value, which is reliant either on management rebuilding credibility or a transforming deal.”
However Mr Levy seems to be confident that 888 will stay on target and meet full year earnings. It’s still early days yet, and we’ll be very interested in seeing what the next financial report says.
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