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(Bloomberg) -- 888 Holdings Plc, the online gambling company that supplies services for Harrah's Entertainment Inc., fell the most in a year in London trading after saying the second quarter has been "disappointing."
888 dropped as much as 11 percent, the most since April 3, 2009. Second-quarter trading to date "has been disappointing in casino, poker and bingo," the Gibraltar-based company said in a statement today.
The company will cut expenses, including up to 20 percent of payroll costs at the 900-worker company, Chief Executive Officer Gigi Levy said in a telephone interview. The company's top 10 managers will be asked to take 10 percent pay reductions, he said.
Competitors such as PartyGaming Plc and Playtech Ltd. "have been exhibiting stronger casino revenue growth, and the weak start to Q2 strengthens the case that the group is suffering competitive losses," wrote Alistair Macdonald and Geetanjali Sharma, analysts with Execution Noble who have a "hold" rating on 888.
The industry's typical seasonal slump as weather improves in spring was "slightly more" than last year, perhaps due to weak economies in countries such as Greece and Spain, Levy said. Average daily sales were 13 percent below the first quarter in the first 25 days of the second, the company said.
Playtech and PartyGaming also fell, with Playtech dropping the most since Aug. 3, 2009. 888 declined as much as 10.2 pence to 83.6 pence, and traded at 86 pence as of 11:03 a.m. in London. The shares have fallen 23 percent this year, giving the company a market value of 298.3 million pounds ($452.7 million).
Playtech Declines
Playtech declined as much as 6.4 percent, while PartyGaming decreased as much as 4.8 percent.
888'S first-quarter operating income rose 21 percent as it added new casino and poker customers. Operating income rose to $69 million, from $57 million in the year-earlier period, the Gibraltar-based company said.
By July, 888 expects to agree on two small acquisitions, one of a consumer gambling company, and one with both consumers and businesses as customers, Levy said.
