888Holdings Sees 71% Surge in Active Players
888 updated the markets yesterday with their trading update for the final quarter of 2010 and cumulative results for the year ending 31/12/2010 .
Amongst the highlights was a 71% increase in active Casino and Poker players in the quarter compared to the third quarter at 283 000 and a strong performance from the Wink Bingo brand which 888 acquired in December 2009 . Annual EBITDA from Wink Bingo is expected to reach close to £10M and this now looks like a very good acquisition from 888 although some doubts remain as to exactly how the company will pay for the business as the final cost is based on an earn out of the 2010 figures .
Wink Bingo now accounts for almost half of 888’s profits and Paul Leyland an analyst at Investec wondered : “888 has got about $30m of its own money in the bank and generates around $30m of EBITDA… so where is it going to find this money from? ”
In a conference call with analysts after the results announcement CEO Gigi Levy also confirmed that discussions with Ladbrokes regarding a takeover were still on-going . Levy said “We have seen the speculation that the negotiations are off, but we can confirm that this is not the case ” however Levy admitted that talks could not continue indefinitely saying “For the benefit of everyone we wouldn’t want it to stretch for many more months.”
888Holdings is currently valued at around £160M after it’s share price more than halved during 2010 .