888 plans to cut costs

888 revealed that total operating income from its business-to-consumer activities for the first three months had increased 30 % from the same period in 2009 to us$ 59 million while it announced that it has ‘embarked on a cost cutting exercise across the group’ after ‘taking a prudent and pragmatic view of current trading’.

Total operating income from the firm’s business-to-consumer casino activities rose 23 % year-on-year to us$ 33 million while poker decreased 15 % compared to the first three months of 2009 to us$ 12 million.

In addition, the firm revealed that its total operating income from its business-to-consumer emerging offering activities increased 203 % year-on-year to us$ 14 million while the number of active casino and poker customers rose 30 % compared to the first quarter of 2009 to 218,000.

888 revealed that its Dragonfish business-to-business division reported total operating income of ten million dollars, which was a decrease of 13 % year-on-year but a 16 % increase on a pro-forma like-for like basis.

The firm said that trading for the second quarter had been ‘disappointing in casino, poker and bingo’ due, in part, to ‘historical seasonal trading patterns’. Over the first 25 days of the quarter, 888 revealed that daily average revenues had been approximately 13 % below their average for the first quarter of 2010.

“While the first quarter of 2010 saw improvement on a year-on-year basis, business-to-consumer trading remains challenging across our product range, partly influenced by the seasonal pattern,” said Gigi Levy, CEO for 888.

“Emerging offerings continues to outperform the core products and Dragonfish continues to win new deals, notably those in the newly regulated Italian market with Bwin Italia and Gioco Digitale. However, revenue from new deals is yet to gain significant volume. “We believe that the right steps are being taken to counter the current challenges we face and the board remains confident in 888's strategy.”