UPDATE 2-888 profit down 43 pct, sees return to growth in Q4

Published 08/27/2009, 06:17 AM
Updated 08/27/2009, 06:21 AM
CASP
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* H1 pretax profit $14.9 million vs $26.3 million

* Sees flat Q3, return to growth in Q4

* Shares down 7.3 percent at 1010 GMT

(Adds company, analyst comment, shares, details)

By Rhys Jones

LONDON, Aug 27 (Reuters) - Online gaming firm 888 reported a 43 percent fall in first half profit, sending its shares down, but said it expected its casino, bingo and sports betting websites to return to growth in the fourth quarter.

The company on Thursday reported a pretax profit of $14.9 million on revenue 10 percent lower at $117.9 million for the six months to the end of June, while earnings before interest, taxes, depreciation and amortisation (EBITDA) fell a quarter to $20.6 million.

Shares in 888 were down 7.3 percent at 87.5 pence at 1010 GMT, valuing the company at around 320 million pounds ($523 million).

"The sector look-through is encouraging relative to fears of further trading deterioration, but 888's new consensus EBITDA of $45 million represents a 20 percent reduction on 2008 and a 27 percent reduction on consensus at the beginning of the year," Collins Stewart analyst Paul Leyland said.

888's casino income was $55.9 million, down 20 percent on the same period last year, while its newer business products, which include bingo and sports betting, had income of $11.4 million, up almost a third.

The company said it expected trade to stabilise further in the second half.

"Consumer behaviour has gone back to normal, and we think the third quarter is going to be okay, with the fourth quarter showing nice growth," Chief Executive Gigi Levy told Reuters in an interview.

Levy also said the company was close to completing "a few big deals" with European media companies and casino operators.

UK peer PartyGaming reports its latest trading figures on Friday. (Editing by David Jones, editing by Will Waterman) ($1=.6115 Pound)

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