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Saturday, December 5, 2020

888 Holdings a “Stock to Watch” After Announcing Impressive H1 2020 Financial Results

  • 888 Holdings has been called a “stock to watch” in 2020 by investors after announcing impressive financial results for the first half of the year.  
  • Commonly known as 888.com, the company operates several prominent online gambling brands including 888poker, 888casino, 888sports and several bingo sites such as Wink Bingo.  
  • 888 Holdings reported Year on Year growth of 56% for the first half of 2020, with $36.1 million in revenue from poker. 
  • CEO of 888, Itai Pazner, was delighted with the performance, commenting “888 has performed very well throughout the first half of 2020 with robust year-on-year growth in revenue and Adjusted EBITDA of 37% and 56% respectively”. 888poker was perhaps the standout performer for the group, with new depositing customers increasing by 104%. 

The rise of 888 Poker 

Online poker stimulated a resurgence in popularity for poker, with many people attracted to the ease and convenience of playing online rather than having to visit a casino or other venue. Taking a seat at a live poker tournament or poker table in a casino, where there are likely to be plenty of experienced players and a variety of unwritten etiquette rules to follow can be an intimidating experience for the first time player, meaning many people who would enjoy the game were often too nervous to experience it. However, the advent of online poker rooms meant that anyone could join in without fear, often with facilities to practice and learn the game for pretend chips rather than putting in real money. There are an estimated 100 million online poker players in the world today, testament to the popularity of the medium. 

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888 Poker was well placed to take advantage of the recent boom in online poker playing, with an established service offering accessible internationally. The overall figures for 888 Holdings up to the 30th of June 2020 saw revenue increases of 37% YoY, with total revenue reaching $379.1 million. Poker was the biggest driver of growth, with a huge 104% increase in new player deposits in the first half of the year and revenue growth of 56%, taking it to $36.1 million. This represents the highest half-year revenue 888poker has experienced in the past three years. The before-tax profit of 888.com is expected to reach $50.9 million for the whole of 2020 – a YoY increase of 129.3%. 

The future of 888 

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The robust YoY growth for 888.com, and especially 888poker, looks set to continue in the second half of 2020 and beyond. New service offerings in the pipeline include a new-look poker product, a new safe-gambling feature called the Control Room and the launch of a proprietary sportsbook. Investors have demonstrated extreme confidence in the ongoing success of the 888 brands, with share prices leaping up following the H1 financial report announcement.  

888 Holdings shares were trading at 174.86p per share at the end of June 2020. By the end of September, they had reached 208.00p per share. At the end of trading on the 30th of September, the day of the announcement, share prices reached 250.50p each, and continued to rise to hit a peak of 264.00 per share on the 2nd of October. While share prices have dropped slightly since then, they are still trading at over 260.00p per share, valuing the company at £962 million. 

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Free play options and micro-stakes tables provide opportunities for learning the game, honing new skills, practicing strategies and more, without risking large amounts of money to do so. Online poker also offers opportunities to experience new variations of the game. Most players have one genre that they play, and for the majority that will be Texas Hold ‘Em. However, there are many poker variations out there and learning how to play a variety can help improve ability in the primary genre as well as developing new skills. Online tournaments allow determined players to slowly build their stack and potentially win huge prizes for a relatively small entry fee, especially when there are thousands of starting players in the tournament. There are also sit-and-go options, perfect for mobile gambling on the go. 

Mobile is one of the biggest growth markets in the online gambling sector. Recent statistics from the UK’s Gambling Commission found that 44% of online gamblers stated they had gambled via their smartphone or other mobile device within the four weeks prior to the survey. 888poker has a multi-platform offering accessible through home computers and mobile devices with a wide variety of game formats for players to choose from, appealing to a large percentage of the overall online gambling consumer demographic.  

In summary 

For players that prefer the thrill of a real-life games, 888poker is also known for hosting a series of live events exclusive to members. The figures from the first half of 2020 certainly seem to indicate that 888poker is becoming increasingly popular and, with the expanded service offerings expected to launch soon, has the potential to attract even higher revenues in the second half of the year.  

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