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UK – Cost of failed takeover stunts 888’s profit

By - 23 March 2016

888 Holdings failed takeover of Bwin.Party cost the company £10m which along with new taxes halved pre-tax profits in 2015 to £23m.

However with the number of active users increasing revenues, the company still managed to increase its revenues by 12 per cent to £357.2m.

Chairman Brian Mattingley said: “The online gaming market is dynamic and will continue to develop and grow globally. This will be driven primarily by marketing channels, new regulation, and the increasing adoption and sophistication of mobile devices, making our gaming entertainment ever more accessible and enjoyable.

“In line with our focused growth strategy we made strong progress in 2015 in regulated markets where we are able to leverage our full marketing expertise to grow the 888 brands. This included successful launches in the Danish market in the second half of the year where the 888 brands have performed very encouragingly to date. Revenue from regulated markets grew to account for 59 per cent of Group revenue aided by these launches as well as notably strong performances in the UK and Spain.”

“We carefully planned ahead of the introduction of the new point of consumption gaming tax in the UK to mitigate some of the financial impact on 888 whilst ensuring that we continued to provide the most enjoyable gaming experience to our customers. We have continued to take advantage of new opportunities created by regulatory change, such as in Denmark, Romania and Ireland. With our own gaming platforms and significant experience of launching successfully in newly regulated markets, we continue to see opportunities for 888 as more governments introduce regulatory frameworks for online gaming. Trading during the financial year to date has been strong with average daily revenue 20 per cent above the previous year. With strong operational momentum in the business our focus will continue to be on delivering a truly satisfying experience for our customers and delivering strong, sustainable long term earnings growth for our shareholders.”

Itai Frieberger, CEO of 888, added:”2015 was a very successful year for 888during which we maintained our excellent operational momentum. This strong performance reflects the continued execution of our focused growth strategy as well as the quality of our brands, best-in-class technology and CRM expertise and was achieved despite the significant external challenges that impacted the online gaming industry and our profitability. Like for like Group revenue increased 12 per cent driven by our core B2C business where we delivered an outstanding 13 per cent increase in active players. This again reflected an exceptional performance in Casino and impressive growth in Sport, where we continue to see exciting opportunities on which to further capitalise in 2016.”

“In line with our strategic focus, we made further progress across regulated markets with growth in Spain, aided by the launch of slots in the first half, Italy, where mobile continues to drive market penetration, and Denmark, where we have seen an encouraging performance following our successful launch in the second half of the year.”

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