Online gambling firm 888 boosted by increased dividend
LONDON, March 25
LONDON, March 25 (Reuters) - Shares in 888 Holdings rose more than six percent on Tuesday after the online gambling company beat annual profit forecasts and raised its dividend payout to shareholders.
888 offers casino, poker and bingo games and is expanding its sports betting business. It is the only online gaming company that has operations in three U.S. states where gambling rules have been relaxed - New Jersey, Nevada and Delaware.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 13 percent to $76 million in 2013, boosted by operations in Italy and Spain moving into profit.
888 raised its total dividend payout for the year to 14 cents per share, up by 56 percent on last year.
"We have started 2014 well, with average daily revenue up more than eight percent in the year to date, and look forward to the year ahead with continued confidence," Chief Executive Brian Mattingley said in a statement.
888 shares traded 6.3 percent higher at 143.5 pence by 0830 GMT, valuing the firm at about 475 million pounds ($783 million).
One cloud on the horizon is a new British tax on online gambling that is set to be introduced from December, closing a loophole that had allowed companies to cut their tax bill by basing their operations offshore in places like Gibraltar.
Mattingley declined to quantify the likely effect on 888's results should the tax be introduced as planned.
Analyst Ivor Jones of Numis said the tax would cut 888's earnings by around 30 percent but Jones believes the government plan could still be derailed by legal challenge.