RE: Malta16 Mar 2013 13:17
The chief executive of 888 Holdings took the unusual step of welcoming a dip in the online gambling group’s share price, saying investor excitement at the potential liberalisation of the US market had been overdone and had led to his company being overvalued.
Brian Mattingley said he was “really not unhappy” at 888 suffering a more than 7 per cent drop in shares Wednesday.
“We were valued at 11 times ebitda – that’s far too much,” Mr Mattingley said. “I believe it’s good we are settling back to a share price valuing us sensibly.”
Shares in the group, which runs its own online gambling websites and offers software to other operators, reached a seven-year high last week on the back of a series of positive developments in the US.
Analysts see 888 as well-placed to take advantage of New Jersey’s decision earlier this month to pass a bill giving licences permitting internet betting in casino and poker to land-based casinos.
The group has a joint venture with Caesars Entertainment which has four casinos in Atlantic City.
It is also making progress in obtaining a licence from the Nevada Gaming Commission to become an interactive gaming service provider, and has signed a deal with Las Vegas resort operator Treasure Island to provide online poker in Nevada.
Its flurry of US deals included a strategic tie-up with WMS, which makes gaming machines predominantly for US land-based casinos. Also, 888 has set up a joint venture with investment firm Avenue Capital Group to launch 888 brands in the US market as and when regulation allows.
Mr Mattingley said its US opportunities “could be considerable,” before adding: “But they won’t be today, they won’t be in 2013 and it will not be significant in 2014. Hopefully, we can see something coming through that is influential in 2015. You’ve got to be very cautious about the US market. It is not the panacea.”
The chief executive added he was “slightly surprised” by comments from Gary Loveman, his Caesars’ counterpart, who suggested the Las Vegas-based operator might migrate eventually from 888’s platform to French company Barrière des Jeux.
“It wasn’t very helpful,” said Mr Mattingley.
Reporting a 13 per cent rise in full-year revenues, 888 said that 2012 earnings before interest, tax, depreciation and amortisation grew 20 per cent to $66.8m. Adjusted earnings per share were 13.9 cents, compared to 7.4 cents in 2011. Trading in the quarter to March 9 showed a 8 per cent rise in average daily revenues.
The dividend, which was reintroduced at the half year after a four-year absence, totalled 9 cents a share for the full year, including a one-off 2 cents per share dividend.
The shares closed down 12p at 149p.
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