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Summary
- 888 Holdings PLC reported a revenue growth of 37 percent year on year in H1 FY20.
- The performance was supported by improved customer acquisition and demand for online games during the pandemic.
- City Pub Group reported that the sales are at 80 percent level of the same period last year since reopening on 4 July 2020.
- The growth was supported by the government's Eat Out to Help Out scheme and cut in the VAT.
888 Holdings PLC (LON:888) touched its 52-week high of GBX 265.0 per share on 30 September 2020 after the Company reported strong performance in H1 FY20. Shares of 888 and City Pub Group PLC (LON:CPC) were up by around 22.30 percent and 7.62 percent, respectively from their last closing price (as on 30 September 2020, before the market close at 12:30 PM GMT+1).
888 Holdings PLC (LON:888) - Poker 8 would be launched in H2 FY20
888 Holdings PLC is a UK based online gaming company. It is headquartered in Gibraltar, and it has operation licenses in Gibraltar, the UK, Spain, Italy, Denmark, Ireland, Romania, Nevada, New Jersey and Delaware. The Company operates under the Business to Consumer (B2C) and Business to Business (B2B) channel.
888 Holdings Brands
(Source: Company website)
H1 FY2020 results (ended 30 June 2020) as reported on 30 September 2020
In H1 FY20, 888 Holdings revenue stood at USD 379.1 million, which increased by 37 percent year on year from USD 277.3 million a year ago. The gaming duty and taxes were USD 69.6 million that was up by 55 percent year on year mainly due to better revenue and increase in the remote gaming duty in the UK. The adjusted EBITDA improved by 56 percent year on year to USD 70.1 million in H1 FY20 from USD 44.9 million in H1 FY19. The adjusted profit before tax was USD 50.4 million in H1 FY20 better than USD 27.1 million reported in H1 FY19.
The basic earnings per share were 12.4 USD cents in H1 FY20. The Company announced the interim dividend of 6.0 USD cents per share for H1 FY20. The healthy performance in H1 FY20 was driven by demand for online games during the covid-19 and improved level of customer acquisition in H2 FY19. Amid the impact of the covid-19, the Company invested on the technological infrastructure and introduced new algorithms to monitor customer's activities such as deposits, withdrawals and bets that was an active attempt by the Company to promote safe gambling.
Performance by Operational Segment
(Source: Company website)
B2C generated revenue of USD 361.3 million in H1 FY20, which increased by 38 percent year on year from USD 262.5 million a year ago. B2B division revenue grew by 21 percent year on year to USD 17.8 million in H1 FY20. Based on the breakup of B2C revenue, Casino sales were up by 48 percent year on year to USD 260.0 million, Poker sales were USD 36.1 million, which increased by 56 percent year on year in H1 FY20. Bingo sales were up by 8 percent year on year in H1 FY20 to USD 21.1 million, whereas the Sports category revenue fell by 1 percent year on year to USD 44.1 million. Sports revenue was impacted due to the cancellation of the sporting events worldwide following the health crisis.
Share Price Performance Analysis
1-Year Chart as on September-30-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
888 Holdings PLC's shares were trading at GBX 255.00 and were up by close to 22.30 percent against the previous closing price (as on 30 September 2020, before the market close at 12:30 PM GMT+1). 888's 52-week High and Low were GBX 265.00 and GBX 68.40, respectively. 888 Holdings had a market capitalization of around £768.81 million.
Business Outlook
The Company had a significant customer acquisition based on year to date, which reflected in the business performance as the third quarter to date average daily revenue was 56 percent higher as compared to the same period last year. 888 Holdings plan to launch Poker 8 in H2 FY20 and roll-out Spectate, a sports book platform, in the UK in early 2021. The Company expects that given the strength of its financial position and resilient business model, it is poised to deliver growth.
City Pub Group PLC (LON:CPC) - Bought 14 percent stake in Mosaic Pub & Dining Group
City Pub Group PLC is a UK based company that runs pubs in the southern half of England and Wales. It has 48 free house pubs located in London and market towns. The pubs operated by the Company are premium estates and offer products as per the local market.
Target Market for City Pub Group
(Source: Company website)
Result for 26 weeks (ended 28 June 2020) as reported on 30 September 2020
(Source: Company website)
In H1 FY20, the Company reported revenue of £12.1 million, which fell from £27.1 million generated a year ago. The adjusted EBITDA loss was 0.2 million in H1 FY20 against a profit of £3.6 million in H1 FY19. The adjusted loss before tax stood at £3.6 million in H1 FY20, whereas the Company reported profit before tax of £1.9 million in the same period last year. In April 2020, City Pub Group raised £22 million through the placement of shares. The Company bought a 14 percent stake in Mosaic Pub & Dining Group that operates nine pubs.
Performance since reopening
The Company started phased reopening of its pubs from 4 July 2020, and it has 37 operational pubs out of 48 pubs. The sales have recovered slightly since reopening, and they are at 80 percent of the previous year's level in the same period. The Company took advantage of the Eat Out to Help Out scheme that was started by the UK government in August 2020 to support the outdoor eating businesses.
Share Price Performance Analysis
1-Year Chart as on September-30-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
City Pub Group PLC's shares were trading at GBX 61.88 and were up by close to 7.62 percent against the previous closing price (as on 30 September 2020, before the market close at 12:35 PM GMT+1). CPC's 52-week High and Low were GBX 214.66 and GBX 36.25, respectively. City Pub Group had a market capitalization of around £59.66 million.
Business Outlook
The pandemic has made the Company transform strategically to endure future challenges. It expects that the next six months would be challenging, but the focus would be to develop the brand. The Company is asset-backed, and it is a premium operator of the pubs which distinguishes it from the branded pubs. It has centralized the sales and booking system, which is supporting to generate more pre-booked business. The Winter Economy plan announced on 24 September 2020, the VAT cut of 15 percent for the hospitality and tourism sector is supportive; however, the replacement of the furlough scheme and 10 PM curfew would likely subside the business of restaurant and pubs.
