The online casino provided a trading update for the third quarter of 2006 and cumulative results for the nine months ended 30 September 2006.
Third quarter non-US net gaming revenue was up 20% to $38m, casino revenue was up 5% to $23m and poker revenue was up 54% to $16m on the same period 2005.
The number of active non-US members increased by 5% over the second quarter 2006, nearly reaching 180,000. Number of active casino members decreased by 4% to 46,444, while the number of active poker members reached 132,995, an increase of 9% compared to Q2 2006.
Quarterly net gaming revenue per active non-US member was $214 compared to $228 in Q2 2006. In casino quarterly net gaming revenue per active member was $488 compared to $465 in Q2 2006. In poker quarterly net gaming revenue per active member was $118 compared to $134 in Q2 2006.
As at 30 September 2006, 888 had 3.4 million real money registered member accounts from non-US regions, representing an increase of 40% in real money member accounts since 30 September 2005.
For the nine months ended 30 September 2006, non-US net gaming revenue was up 34% to $117m, casino revenue rose 5% to $67m and poker revenue rose 115% to $50m on the nine month period ended 30 September 2005.
888 said that since suspending real money services to US based customers in October 2006, no negative impact on the non-US business has been observed in either casino or in poker revenues. Facing the new business environment the group has completed a review of its operations and fixed cost base. Existing marketing resources have been re-deployed and re-focused on non-US markets and a headcount reduction plan, believed to involve about 200 of the company\’s 940 staff, is being implemented across the group.
As a result of the restructuring plan and suspension of real money gaming operations in the US, 888 expects to incur in the second half of the year a one-off expense of approximately $6 million.
Commenting on the results, CEO John Anderson said: “The results released today demonstrate the resilience of our business model and are a direct result of careful implementation of our long standing strategy to diversify our product offering and geographical spread. We are pleased with these results in, what is typically the slowest quarter of the year. Despite the suspension of our real money gaming operations in the US, following the enactment of the Safe Ports Act in October 2006, our business continues to be sound and exhibit healthy growth in non-US regions. As a result of the significant change to our business environment we have embarked on a cost optimization programme across the group including a modest reduction in marketing and R&D which are key to our future accelerated growth. As expected, despite this action our margins will suffer in the medium term until business volumes increase. 888 is debt free and has ample liquid resources to both fund our operations and participate in attractive opportunities for market consolidation.”
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