888 Sees 2011 Profits Surge
888 Holdings is about to end 2011 with a bang thanks to four consecutive successful quarters. Revenues soared 58% in the second quarter, and 888 is about to finish the fiscal year with EBIT (earnings before interest and taxes) between $35 and $51 million. This marks another good year as the firm’s profits seem to be moving in the right direction.
Ironically, 888’s good fortune may be due to the same economic environment that plagues other businesses in the UK. As fears of a new recession loom over UK’s economy, many Britons are choosing to stay at home. Although consumers suddenly cutting spending prompted concerns for many other businesses, those same consumers increased the amount of time they spent gambling online.
Over the next year, 888 Holdings intends to expand its operations. A number of countries in the European Union have recently passed regulations for online gambling. 888 intends to penetrate these markets, which produced about €80 billion euros last year. Therefore, they will be investing more heavily in advertising and marketing as they seek to reach their goals.
888 Holdings issued a statement to their shareholders that they are going to be investing a significant amount of capital as they expand into mainland Europe. However, they still expect EBIT at the end of 2012 to be above market expectations.
Despite the company’s performance, investors have not been overly impressed with 888 Holdings. Shares have not been trading well and lost almost half of their value since the beginning of the year. However, Ivor Jones, Director of Numis Securities, feels that investor sentiment and the share price of 888 Holdings will change in reflection of these recent earnings statements.
The earnings announcements from 888 Holdings are encouraging for the online gaming industry. This may be an indication that online gaming firms may be able to shrug off any doubts raised by the possibility of a global recession.
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