10 Nov 2009 07:00
10 November 2009
888 Holdings Public Limited Company
("888")
Interim Management Statement
Q3 2009 Key Performance Indicators and Trading Update*
888, one of the world's most popular online gaming entertainment companies, is pleased to provide the following trading update for the first quarter of 2009.
Financial Highlights
Total Operating Income US$61million (Q2 2009: US$61 million), demonstrating resilient trading during the historical seasonally quiet summer period
Total Operating Income B2B at US$13 million (Q2 2009: US$12 million), a quarter on quarter increase of 2%
Total Operating Income B2C at US$48 million (Q2 2009: US$48 million), resilient trading driven by casino
Total Operating Income B2C Emerging Offering at US$6 million (Q2 2009: US$7 million), a 44% increase compared to Q3 2008
Total Operating Income B2C Emerging Offering during the first three quarters of the year at US$18 million (2008: US$9 million), a 99% increase
Total Operating Income B2B during the first nine months of the year of US$37 million (2008: US$28 million), a 32% increase
Quarterly Total Operating Income B2C per active Casino and Poker customer was US$248, a quarter on quarter increase of 7%
Growth continued into Q4 with more than 8% increase in average daily revenue compared to Q2
* All percentages in this release are calculated without rounding.
Operational Highlights
Pioneering £8,888,888 Pirates Millionaire free spin slot machine launched in UK, coupled with TV campaign
Ground breaking Dragonfish B2B deal with Harrah's announced in September, progressing on track to launch the WSOP and Caesars online casino and poker brands by next week
Dragonfish launched poker and casino in the Balkans and signed an agreement with Tsogo Sun Gaming Group in South Africa
Moon Bingo launched as a new standalone bingo network following the success of the skin on the Dragonfish network
Investment in 888's offering continues across all product areas
Commenting on today's announcement, Gigi Levy, Chief Executive Officer, said:
"We are pleased with the results achieved during the third quarter. Our B2C business showed resilience during the historical seasonally weak summer period and Dragonfish has continued its impressive growth. With Harrah's set to launch in coming days and a strong pipeline, we remain confident of reaching our targets.
We are particularly pleased with the 99% growth achieved in our B2C emerging segment during the first three quarters of the year. Whilst Poker remains challenging the B2C business showed resilience during the third quarter. The fourth quarter started well and given that our various business initiatives are progressing as planned we expect to grow the business further during the year."
Set out below are 888's results for Q3 and cumulative results for the first nine months of the year.
Key Performance Indicators
Third Quarter 2009
Group
Total Operating Income US$61million (Q2 2009: US$61 million), stable compared to Q2 2009 and a 10% decrease compared to Q3 2008
As at 30 September 2009, 888 had 6.8 million Casino, Poker and Sport real money registered customer accounts, representing an increase of 23% since 30 September 2008
B2C
Total Operating Income B2C at US$48 million (Q2 2009: US$48 million), virtually the same as Q2 2009 and a 15% decrease compared to Q3 2008
Total Operating Income B2C Casino at US$29 million (Q2 2009: US$29 million), flat compared to Q2 2009 and a 16% decrease compared to Q3 2008
Total Operating Income B2C Poker at US$12million (Q2 2009: US$13 million), stable compared to Q2 2009 and a 28% decrease compared to Q3 2008
Total Operating Income B2C Emerging Offering at US$6 million (Q2 2009: US$7 million), a decrease of 5% from Q2 2009, mainly due to unfavorable sport trading results in August, and a 44% increase compared to Q3 2008
Number of active customers B2C Casino and Poker at 169,000, a seasonal decrease of 6% compared to Q2 2009
Number of active customers B2C Casino at 62,000, a seasonal decrease of 6% compared to Q2 2009
Number of active customers B2C Poker at 134,000, a seasonal decrease of 6% compared to Q2 2009
Quarterly Total Operating Income B2C per active Casino and Poker customer was US$248, an increase of 7% compared to Q2 2009
Quarterly Total Operating Income B2C per active Casino customer was US$471, an increase of 7% compared to Q2 2009
Quarterly Total Operating Income B2C per active Poker customer was US$93, an increase of 6% compared to Q2 2009
B2B
Total Operating Income B2B at US$13 million (Q2 2009: US$12 million), an increase of 2% on Q2 2009 and a 15% increase compared to Q3 2008
Nine Months ended 30 September 2009
Group
Total Operating Income US$179million (2008: US$203 million), a decrease of 12%
B2C
Total Operating Income B2C at US$142 million (2008: US$175 million), a decrease of 19%
Total Operating Income B2C Casino at US$85 million (2008: US$107 million), a decrease of 20%
Total Operating Income B2C Poker at US$39million (2008: US$59 million), a decrease of 34%
Total Operating Income B2C Emerging Offering at US$18 million (2008: US$9 million), a 99% increase
B2B
Total Operating Income B2B at US$37 million ( 2008: US$28 million), a 32% increase
Current Trading
Trading in the fourth quarter has begun well. During the first five weeks of the quarter daily average revenue as well as new customer recruitment increased by more than 8% compared to average during Q3.
Investment in 888's offering continues: The Casino client was released in three new languages, a new no-download Casino was introduced integrating, for the first time, the successful live dealer offering. In addition, 20 new games were added including the branded Cluedo, Cleopatra and Hulk Games. In Bingo 888 completed a new integration platform allowing rapid game deployment with 11 new side games already integrated, including the successful "X-Factor" product.
The group's financial position remains strong with approximately US$105* million cash equivalents (of which approximately US$35 million represent liabilities to customers) and with no debt leaving the group in a sound position to exploit M&A opportunities as and when they become available. As such, the board remains confident about further progress during the year.
Material Events, Transactions and Financial Position
There have been no material events, transactions or changes in the financial position of 888 since the year end other than as set out above.
* Following payment of interim dividend in October.
Analyst and Investor Conference Call
Gigi Levy, Chief Executive Officer and Aviad Kobrine, Chief Financial Officer, will be hosting an analyst and investor conference call at 9.30am (BST) today.
Dial-in number: +44 (0)20 7138 0816
Passcode: 6477869
Replay number: +44 (0)20 7111 1244 [available for 1 week]
Replay passcode: 6477869
Contacts and enquiries
| 888 |
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| Gigi Levi, Chief Executive Officer | +350 200 49800 |
| Aviad Kobrine, Chief Financial Officer | +350 200 49800 |
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| Bell Pottinger Corporate & Financial |
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| Nick Lambert | +44 (0)20 7861 3232 |
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". By their nature, forward-looking statements involve risk and uncertainty since they relate to future events and circumstances. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement reflect 888's view with respect to future events as at the date of this announcement. Save as required by law or by the Listing Rules of the UK Listing Authority, 888 undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.
Appendix
| US$m* | 2008 | 2009 | |||||
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| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
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| B2C TOI |
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| Casino | 35.8 | 36.3 | 34.8 | 29.6 | 26.7 | 29.2 | 29.4 |
| Poker | 21.9 | 19.7 | 17.4 | 14.5 | 13.7 | 12.5 | 12.5 |
| Emerging Offering | 1.0 | 3.6 | 4.4 | 4.8 | 4.8 | 6.7 | 6.4 |
| Total Operating Income B2C | 58.7 | 59.6 | 56.7 | 49.0 | 45.1 | 48.4 | 48.2 |
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| B2C KPI |
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| TOI Casino US$m | 35.8 | 36.3 | 34.8 | 29.6 | 26.7 | 29.2 | 29.4 |
| Active Players Casino (000) | 74.3 | 74.0 | 72.5 | 66.9 | 62.1 | 66.5 | 62.4 |
| TOI Casino per active player US$ | $ 482 | $ 491 | $ 480 | $ 443 | $ 429 | $ 439 | $ 471 |
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| TOI Poker US$m | 21.9 | 19.7 | 17.4 | 14.5 | 13.7 | 12.5 | 12.5 |
| Active Players Poker (000) | 158.4 | 153.0 | 149.3 | 136.7 | 133.1 | 142.4 | 133.8 |
| TOI Poker per active player US$ | $ 138 | $ 129 | $ 117 | $ 106 | $ 103 | $ 88 | $ 93 |
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| TOI Casino & Poker US$m | 57.7 | 56.0 | 52.3 | 44.2 | 40.4 | 41.8 | 41.8 |
| Active Players Casino & Poker (000) | 199.1 | 195.9 | 193.7 | 176.5 | 167.7 | 179.7 | 168.5 |
| TOI Casino & Poker per active player US$ | $ 290 | $ 286 | $ 270 | $ 250 | $ 241 | $ 232 | $ 248 |
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| B2B TOI |
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| Total B2B Operating Income | 7.4 | 9.7 | 11.0 | 10.5 | 11.9 | 12.4 | 12.7 |
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| Total Operating Income | 66.1 | 69.2 | 67.7 | 59.5 | 57.0 | 60.9 | 60.9 |
* Rounded