888 Sales Down Mostly Due to Exchange Rates Swing
(Bloomberg) -- 888 Holdings Plc, the second-largest U.K. online gambling company, said sales weakened in September because of the global economic crisis and ``extreme volatility'' in exchange rates.
Revenue during September was lower than in August, the Gibraltar-based company said today. Third-quarter sales rose to $66 million from $53 million a year earlier after ``solid'' July and August sales, though the fourth quarter started ``slowly.''
The dollar strengthened about 14 percent against the British pound and 16 percent against the euro between August and the end of October, hurting sales once they were translated into dollars, 888 said in its statement. The currency swings accounted for about 95 percent of the slowdown in revenue, Chief Executive Officer Gigi Levy said in a telephone interview.
``The majority of the change we've seen in customer performance is exchange-rate driven,'' Levy said in the interview. ``We haven't seen a significant change'' in customer behavior, the CEO said, adding that online gambling was proving more resilient than wagering at betting shops and casinos.
888 fell 1.75 pence, or 2.2 percent, to 77.25 pence at 9:24 a.m. in London trading. The stock has slid 46 percent this year, less than the 60 percent drop by PartyGaming Plc, whose PartyPoker Web site competes with 888's Pacific Poker.
U.K. bookmaker Ladbrokes Plc and Dublin-based competitor Paddy Power Plc last week reported declines in wagers placed at betting shops as gamblers pared their spending.
Sports Bets
The number of gamblers making casino and poker wagers in the quarter, or so-called active customers, rose 3 percent from a year earlier, 888 said in the statement. Business in the first nine days of November was better than in October, mainly driven by casino and bingo sales, Levy said in the statement.
888 introduced sports-wager and bingo Web sites in the first half to spur demand, signed deals to add new games, and won a contract to provide betting under Sportech Plc's brand.
Sales from casino games, the main contributor, climbed 18 percent to $34 million in the third quarter, the statement shows. Poker sales were unchanged at $19 million, and revenue from so-called emerging games, mostly bingo and sports betting, rose 121 percent to $12 million.
