888 Posts Strong Continuing Operations Growth
888 Holdings PLC, owner of Pacific Poker, announced its preliminary 2007 year end results, which in many respects mirrored the performance of the industry as a whole. Like many of its competitors, 888 posted excellent gains from its continuing operations. Also like the rest of the online gambling industry, 888 is still transitioning itself as a company in an effort to achieve its pre-UIGEA financial performance. 888 CEO Gigi Levy said, "2007 was a year of transformation for 888 in which we had to restructure our business following the enactment in the United States of the Unlawful Internet Gaming Enforcement Act in October 2006. I am very pleased to report that we have now successfully completed the restructuring and repositioning of the business and have delivered record results for the year, both in terms of revenue and profit. This demonstrated the resilience of our business, the strength of our team and the continued attractiveness of our business model."
Net gaming revenue for 888's continuing operations (not including the US) grew by 36% year-over-year, with profits before taxes posting a 106% increase for the same period. The biggest gains for 888 came from its casino operations, which grew its non-US net gaming revenue by 33%, while poker grew at 18%. The strength of 888's casino offering was also reflected by their product's selection as "Casino of the Year" by both eGaming and the Online Gambling Awards.
As Levy pointed out, however, 2007 was a transitional year for 888 which is perhaps best understood by viewing its pre-UIGEA nmbers. Including the company's past results from its discontinued US operations, net gaming revenue for 888 actually declined year-over-year. Net gaming revenue for 2007 came in at $216.9 million; short of the $289.9 million reported in 2006 and $271.0 million reported in 2005. Likewise, 888's 2007 pre-tax profit was $45.8 million; down almost 50% from 2006 and off 32% of its 2005 figures.
Although still working to outperform its pre-UIGEA benchmark, 888's strong performance from continuing operations added credence to company's post-UIGEA adjustments and strategic path for growth. Levy added, "With many strategic initiatives now underway, we see a bright future for the business." Some of 888's new initiatives include its sports betting platform, 888sport, launched in March 2008 and its new bingo brand, 888ladies, which debuted in February 2008.
