888 ends year strongly
Ladbrokes takeover target announces strong end to financial year.
888 has ended the year strongly seeing its group total operating income for the fourth quarter rise 18% on the previous three months, the company that is currently in takeover talks with rival Ladbrokes, announced to the stock market this morning.
Group total operating income for the fourth quarter reached US$71m (£44m), 60% of which came from the group’s B2C division (a 17% rise) on the back of a “strong marketing campaign” and the release of 888 Casino 3D, the operator said in a statement.
Despite B2B total operating income for the year falling 21% (although it was up 4% on a pro-forma like-for-like basis), growth in the B2C side of operations saw group total operating income for 2010 rise by 6% to a total of $262m.
Poker has been a strong area for 888, with a sequential growth of 28% in Q4. Chief executive Gigi Levy (pictured) discussed the poker growth in a conference call given to city analysts this morning, citing the area as one where the company has focused on bringing in casual players.
He championed the success of the recent advertising campaign featuring Shane Warne, although he revealed that there is not a similar drive towards the casual player pool in other areas.
“The [Shane Warne advertising] campaign is not very attractive for professional players but it is very interesting for casual players, and we have seen numbers rise as a result,” said Levy.
“In poker, casual players bring professional players too as they want to play against them. There has been no shift in focus in other areas such as our casino though.
“The key is simply getting more players, and we have had a successful marketing campaign to bring in more players in poker and casino. Once you open the door you can bring in even more players.”
Following the success of the recent advertising campaign, the company has no plans to slow down on the marketing front, suggesting any cutbacks would represent short-termism.Levy was keen to stress the success enjoyed by 888 in the UK, the closest to a stand-out performance in a quarter which provided growth all round.
“People had been saying there was no room for further growth in the UK, but we have shown that is not the case, as we have managed to gain market share even when the market is not especially growing,” Levy revealed.
“Wish I could say there’s less competitors [in terms of marketing spend] but Pokerstars and Full Tilt are extremely strong, while William Hill have been marketing with a lot of energy.
“However, smaller players are becoming weaker, and to be small is almost a death penalty in this industry. A lot of growth may come with the disappearance of smaller players and this is positive trend for big companies in the industry.”
The next step for 888 could be determined by regulatory changes over the course of the year.
The regulation of the Italian market has been crucial to its Endemol and Dragonfish partnerships, and Levy expects this development will ensure 888’s costs remain under control.
And with the protracted takeover by Ladbrokes still on hold, the chief executive reassured analysts that negotiations are still ongoing and the deal is far from dead.