888 Holdings (888 Ladies Bingo) have been grabbing the headlines recently AND making changes. The latest news is that 888 Holdings are now going on a cost cutting exercise: Primarily because their trading results for the second quarter of this year; with regards to their casino, poker and bingo investments; are down – It is a fact, during the first twenty five days of the second quarter average daily revenue went down by around 13% in comparison to previous averages during the first quarter of this year.
It is understood, downturns are fairly normal in relation to trading patterns for this time of year. According to research by Bloomberg – who are an independent financial data, software and research company – The cost cutting exercise by 888 will not only include reducing the wages of their current employees by around 20%: Affecting around 900 ‘ground troops’ – The top ten managers at 888 will also be asked to accept a reduction of 10%.
CEO for 888 Holdings, Gigi Levy said: “While Q1 saw improvement on a year-on-year basis, B2C trading remains challenging across our product range, partly influenced by the seasonal pattern.” Indeed, the figures for the first quarter of this year revealed a 21% increase in income for 888: From $57Million last year to $69Million this year.
As of March 31st this year 888 Holdings had just over seven and a half million Poker, casino and Sports betting accounts: Twenty four percent up on the year before: So why the cutbacks? According to Levy: “Emerging Offering continues to out-perform the core products, and Dragonfish continues to win new deals; notably those in the newly regulated Italian market with bwin Italia and Gioco Digitale”. – However, “revenue from the new deals is yet to gain significant volume.”…. Indeed, there is great speculation…
888 Holdings do have ‘room to play with’ – they have around $93Million on the table of which $36Million is liable to players: Therefore NO debt. 888 Holdings have already stated that they will fully utilise M&A opportunities as soon as, and when they are available. According to reports Levy is intent on acquiring two more acquisitions – a small private gambling company and another small yet valid online gambling company: Regardless!
888 remain optimistic and continue to seek expansion yet according to TimesOnline, Barclay Capital believes the downturn clearly reveals “a company-specific problem as well”. Is it a case of running before they can walk? Without doubt, the answer will be revealed – And soon….
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