Fresh from William Hill rejection, online gamer 888 reports soaring revenue and profits

William Turvill and Francesca Washtell
The online gambling website of 888 holdi
888 Holdings bid for bookmaker William Hill along with Rank Group (Source: Getty)

Online gaming giant 888 Holdings has ruled out a merger with rival Rank Group for the foreseeable future.

The company's share price rose today after it announced double-digit profit growth.

The figures

Revenue came in at $262m (£200m), up 19 per cent in the first half of 2016, with strong performances in the casino and sports divisions driving a record turnover.

Sport revenue was up 63 per cent to $25m, while casino revenue was 31 per cent up to $137.4m.

Read more: 888 to expand Eastern Europe service week after failed Will Hill bid

Pre-tax profit for the period hit $27.8m, up 39 per cent, and the company announced an interim dividend of 3.8 cents, up from 3.5 cents.

Shares were up 0.9 per cent at 217p in lunchtime trading.

Why it’s interesting

The booming interim results came shortly after 888 and Rank Group abandoned their takeover pursuit of William Hill.

A consortium formed by Grosvenor Casinos operator Rank and 888 Holdings had submitted two bids, but both were rejected.

Read more: William Hill shares shoot up after Rank and 888 deal falters

Chief executive Itai Frieberger told City A.M. 888 is still pursuing an "organic growth strategy" but that the group does not have "an M&A obsession", and a tie-up with Rank Group is "off the radar".

"Realistically, we have an M&A agenda but this is not a driving agenda when our business is performing so well," Frieberger said.

"The only reason we would takeover or merge would be to gain incremental value. If the right deal presents itself, if the industrial logic is there, then we will go ahead and do it, but not if we don't get there."

Frieberger also acknowledged the attempted takeover of William Hill was "complicated", but said this was less to do with the structure of the deal and more to do with the difficulty of getting three companies to engage simultaneously.

"Dialogue is the most important thing when conducting M&A and we didn't even get a chance to speak to anyone. When there are three companies it creates a time lag and the leak we experienced before announcing our offer was also unfortunate," he added.

What the company said

Frieberger added:

888's continued success is built on our first class technology and core expertise in CRM, marketing and analytics.

These strengths, along with the fantastic efforts of our highly skilled and dynamic team, mean that the business is in excellent shape to deliver long term sustainable growth.

Trading in the third quarter has started well with average daily revenue until 27 August, 15 per cent above strong previous year comparatives and 22 per cent higher on a like-for-like basis. With this strong momentum the board remains confident of delivering against expectations for the full year.

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