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888 Holdings and its stock in 2017

  • 888 Holdings, originally called Virtual Holdings, was founded in 1997
  • It’s been listed on the London Stock Exchange since 2005
  • So far in 2017 its share price has risen from 250p to 264p as revenues have risen
  • Business to consumer venue is up 6% to $242.6 million, with the casino business unit driving over 60% of it
A snapshot of the varying 888 stock from 2007 to 2017
A snapshot of the varying 888 stock from 2007 to 2017

 

888 Holdings plc is one of the world’s most popular providers of online gaming entertainment with a 20 year history of success driven both by innovative, strategic thinking and the successful acquisitions of companies along the way.

The company was founded back in 1997 by two sets of brothers from Israel – Avi and Aaron Shaked and Shay and Ron Ben-Yizhak. It was originally called Virtual Holdings Ltd and its first administrative centre was in Antigua in the West Indies. However this moved to Gibraltar in 2003, where it remains today.

The company was first listed on the London Stock Exchange in 2005 and a year later the 888 brand started to be introduced across its range of different products.

Over the two decades that 888 Holdings have been in operation it has seen many peaks in its share price with one particularly notable year being 2007 when its profits rose from $157 million to $213 million. Over 60% of which was generated by their online casino site, the success of the online casino is partly due to the huge range of entertaining games that can be found at the renowned 888casino. Five years later, in 2012, when it was announced that Facebook was going to use 888 games on its site, the share price also saw a distinct rise as a result.

 

The Casino Business unit is responsible for over 60% of the total revenues.
The Casino Business unit is responsible for over 60% of the total revenues.

 

A strong start to 2017

More recently, when the continuing strong performance of the various 888 Holdings brands was announced in the half-yearly report this had a similar effect with the share price, rising from around 250p up to 264p in a very short space of time.

And it’s no surprise that investors of all kinds have been quick to want a piece of the action. In every single area, with the exception of the company’s business to business operations, revenues have increased significantly. Overall they’ve increased by 3%. Compared with $262 million for the same period in 2016, they’re up to $270.1 in 2017.

Looking at specifics, the business to consumer revenue increased by 6% to $242.6 million up from $229.5 million with 888casino revenue increasing by the same percentage to $146.0 million from $137.4 million. The casino brand is now driving over 60% of all 888 Holdings revenue.

But the real star performer was sports revenue, which increased by an impressive 35% to $33.7 million for the 2016 figure of $25 million – a testament to the huge effort that’s going into boosting this fast-emerging revenue stream in online gaming.

As Itai Frieburger, CEO of 888 Holdings put it in his introduction to the half year report:

“888 has delivered further revenue growth and operational progress in the first half of 2017 resulting in a 9% increase in revenue at constant currency. This pleasing outcome was driven by continued growth in 888’s core Casino vertical, strong momentum in the fast-growing 888Sport and a good performance in Poker. The Group’s strong strategic momentum continued as 888 developed its positions in regulated geographies, achieved greater diversification across products and markets and further enhanced operational efficiencies. Our progress was driven by 888’s technology, leading CRM capabilities and cutting-edge marketing expertise.”

As a result of this strong performance, there was even an interim dividend declaration made on 5th September of this year.

 

888sport performed particularly well in 2016
888sport performed particularly well in 2016

 

Keeping investors in the loop

As a company, 888 Holdings is acutely aware of the importance of not only continuing to achieve great results and offering a sound investment opportunity. They also know how vital it is to give investors ready access to a great deal of information about the company’s financial affairs.

On the Investor Relations section of their corporate website is a wealth of information including the share price that is updated every 15 minutes as well as a dynamic price chart where you can overlay comparative data like share movement for the whole travel and leisure sector and shareholder returns.

It’s also where you can find a full index of company reports, directors’ profiles, regulatory information and details of the AGM.

Going public with the Shakeds’ exit

Of an even broader interest, 888 Holdings also make all of their most relevant press releases available online and over the last 11 months these have covered a range of topics. One of the most recent brought the news that Itai Pazner has recently been appointed to the role of Chief Operating Officer – a promotion from the position as a Senior Vice President that he has held for the last six years and one which will put him in charge of the everyday operations of the business including marketing, product and technology development and HR.

The other key piece of news to have been recently announced that the fact the O Shaked Shares Trust has sold 100% of its holding in the company, reputedly raising over $100 million. The Trust represents the family of the late Aaron Shaked – but his brother Avi still maintains the largest single shareholder of the company representing around 24% of its full worth. Incidentally, the other founding brothers, Shay and Ron Ben-Yizhak, still maintain a 3% holding and have done since 2016.

Not surprisingly, news of the sale by The O Shaked Share Trust had a rapid effect on the share price taking 6% off its value but, as the situation stabilises, it should regain its value.

The outlook for 888 Holdings

As to what the future holds, the strong financial position and high standing of 888 Holdings bodes well. In the past it has been involved in a couple of takeover attempts with the aim of creating an even stronger and more competitive presence in the marketplace. In the first case the company was courted by William Hill back in 2015 but, after a lengthy process, rejected the £700 million offer that was made.

A year later the tables were turned when 888 joined forces with Rank to try and take over William Hill. Again, the bid which was for £3 billion this time, was firmly rejected and all plans were abandoned.

Whether there will be any approaches either by or towards 888 Holdings remains to be seen. Judging by its strong recent financial performance, the company would obviously be a very attractive prospect for any other competitors hoping to consolidate their position in the market.

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