888 Posted Impressive Growth in 2020 but Net Profit Sank
888 Holdings released its 2020 full-year financial report Thursday posting 51.6% growth in revenues across all verticals and even topped expectations published by the company in its post-close trading update.
Impressive Revenue Growth
Revenues for the Gibraltar-based gaming group reached the impressive $849.7 million for the full year ended December 31, 2020, a significant increase from the $560.3 million in the year before. More than 95% of it, $814.3 million was generated from B2C operations, leaving the remaining $35.4 million attributed to the company’s B2B business, which grew by 18.9%.
“2020 was a landmark year for 888, with our team navigating the many challenges presented by a global pandemic to deliver record financial results, and significant progress against our strategic priorities.”
Itai Pazner, CEO, 888 Holdings
The 54.5% increase in B2C revenues was spearheaded by 888’s casino games which accounted for $586.8 million to post an impressive 63.3% growth. Another $122.1 million was generated through sports betting, an increase of 35.7% compared to the year prior.
Traditional for the group poker vertical rose 47.8% year-over-year, to $63.1 million, while revenue from bingo operations accounted for $42.3 million, 9.9% increase compared to the 2019 figure.
“Our product-leadership strategy delivered outstanding results in 2020, with the launch of our ground-breaking Control Centre, our first ever in-house sportsbook, and a totally new poker platform.”
Itai Pazner, CEO, 888 Holdings
Considered geographically, the performance of the London Stock Exchange-listed group in its home market, the UK, remained strong, accounting for $333.5 million, or 39% of total revenue, followed by the EMEA region which generated $253.4 million, or 30% of the total.
The remaining share of revenue came from the US and Americas which contributed to 11% of the total, $93.7 million, while operations in Italy, Spain, and the rest of the world accounted for 10%, 8%, and 2%, respectively.
“Our focus on delivering safe, intuitive, content-rich and entertaining products is helping us to deliver a differentiated customer experience and supporting our market share gains in key regulated markets.”
Itai Pazner, CEO, 888 Holdings
Net Profit Down to a Third
The gambling group saw its marketing expenses jump to $237.1 million and operating costs to $170.1 million, which, plus the $151.8 million paid in gaming taxes and $135.1 million in costs related to sales, resulted into adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $155.6 million, a significant growth from the $92.1 million 888 Holdings reported in the year before.
The company’s bottom line was further impacted by another $11 million in share-based benefit charges, $33.6 million in depreciation and amortization, $78.2 million of impairment costs related to its bingo vertical, and $15.4 million in tax, leaving a net profit of just $11.3 million, 72.8% slump compared to the net profit in 2019.
Speaking about the company’s future outlook, CEO Itai Pazner expressed his optimism for 2021 and beyond, outlining the strong momentum, the record level of customers and the positive reaction to the company’s new suite of products.
“As a result, as well as the group’s strengths as a product-centric, responsible, and diversified operator, the board believes that 888 has an outstanding platform to deliver continued strategic progress during 2021 and beyond.”
Itai Pazner, CEO, 888 Holdings
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