Gambling firm 888 forecasts upbeat earnings as sports events return; shares jump
(Reuters) - Online gambling firm 888 Holdings <888.L> on Friday forecast full-year adjusted core earnings significantly ahead of expectations as more users came on board, sports events returned and its poker business performed well.
Shares in the FTSE-250 company jumped 15.6% by 0837 GMT to a seven-month high of 174.4 pence and topped the midcap leaderboard.
Gambling companies have seen a mixed impact from the coronavirus pandemic, which shut down one big cash cow - competitive sport - globally but encouraged customers to play more poker and bingo to relieve boredom.
The company said its average daily revenue so far this year has been 34% higher than last year, adding that it has benefited from a structural shift towards online services.
"Lockdown has been negative for gambling revenue overall, but it has clearly accelerated the lane change to online. 888, in the race-tuned online casino, has been well-placed to push down on the marketing accelerator and take the lead," Peel Hunt analysts said.
Bookmakers, including 888 and William Hill <WMH.L>, have also been helped by the return of horseracing as well as UK's Premier League and Germany's Bundesliga in recent weeks.
"We have seen a better-than-expected customer reaction to the gradual return of sports events during recent weeks and, during June so far, our sport revenue run-rate has been ahead of June 2019," 888 Chief Executive Officer Itai Pazner said.
The company had flagged growing risks of gambling-related harm in May as more stuck-at-home Europeans were betting online amid nationwide lockdowns to curb the spread of the coronavirus.
(Reporting by Tanishaa Nadkar in Bengaluru; editing by Uttaresh.V and Anil D'Silva)