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Fun stops for 888 as first half profits tumble

The gambling firm reported an adjusted pre-tax profit of US$27.1mln, down from US$42.5mln last year, while revenues slipped 2% to US$277.3mln

888 Holdings - Fun stops for 888 as first half profits tumble

Investors cashed out of 888 Holdings PLC (LON:888) on Tuesday after the gambling firm saw its profits slump in the first half.

For the six months ended 30 June, the company reported an adjusted pre-tax profit of US$27.1mln, down from US$42.5mln last year, while revenues slipped 2% to US$277.3mln.

READ: 888 reiterates full year guidance as it cashes in from increased marketing in first quarter

The interim dividend was also cut to US$0.03 per share from US$0.042 last year.

Despite the overall decline, the firm’s UK business was a marked success in the period, with revenues in the country up 23% on a like-for-like business in the six months reflecting what the group said was its focus on “recreational customers”.

Into the second half, 888 said trading to date had been “in line” with its expectations, with average daily revenues 6% higher than the third quarter of 2018.

Constant currency revenues had also increased 9% year-on-year, led by a 24% rise in UK revenues.

Itai Pazner, 888’s chief executive, said the group was “confident” of reaching expectations for its full year, adding that there were “a number of exciting growth opportunities ahead” which would leverage its new product developments.

“The Board continues to believe that 888 is very well positioned for the future as a result of the Group's diversification across products and markets, product leadership, and first-class team”, the CEO said.

In a note, analysts at Peel Hunt said 888’s overall numbers were “in line” and that the company had restored its UK business to “healthy growth” despite regulatory pressures.

Analysts also said there was “plenty about which to be optimistic” for the group going forward.

Peel Hunt has 888 at a ‘buy’ rating with a target price of 200p.

Investors, however, were less convinced, with the shares sliding 7.2% to 156.7p in lunchtime trading on Tuesday.

Quick facts: 888 Holdings

Price: 124.5 GBX

LSE:888
Market: LSE
Market Cap: £458.59 m
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