Net Bet Blog

888.com issues a management statement earlier today. Revenue growth was healthy at 38% driven by 888ladies the Bingo offering as 888 attempt to diversify away from their core offerings.

888 is an interesting company with a great and well known brand. They also have a large war chest of over $100million to make acquisitions.

If I were advising the management I would suggest spending this sooner rather than later and could suggest a couple of excellent targets for around that price.

Here are the highlights:

Management Statement [ADVFN]

Highlights

* Net Gaming Revenue ("NGR") up 38% to US$64 million (Q1 2007: US$47 million)

* Total Operating Income up 41% to US$66 million (Q1 2007: US$47 million)

* NGR from casino up 35% to US$35 million (Q1 2007: US$26 million)

* NGR from poker up 5% to US$22 million (Q1 2007: US$21 million)

* 27% increase in real money registered customer accounts to 4.9 million
as at 31 March 2008

* Further growth at start of Q2 driven primarily by casino and bingo

Key performance Indicators

Q1 2008

* NGR up 38% to US$64 million (Q1 2007: US$47 million) and 3% above the
previous quarter

* Total Operating Income up 41% to US$66 million (Q1 2007: US$47
million), a 2% increase above previous quarter

* Net Gaming Revenue from casino up 35% to US$35 million (Q1 2007: US$26
million), in line with the previous quarter given the exceptionally high
Casino performance in Q4 2007

* Net Gaming Revenue from poker up 5% to US$22 million (Q1 2007: US$21
million) and 2% increase above previous quarter

* Net Gaming Revenue from Emerging Offering reached US$8 million (Q1 2007: nil)
and 23% increase above previous quarter

* Number of active customers in casino and poker reached 213,115 an increase
of 3.5% compared to Q1 2007 and 2% above previous quarter

* Number of Casino active customers reached 77,370 an increase of 9%
compared to Q1 2007 and 5% above previous quarter

* Number of Poker active customers reached 170,988 an increase of 2%
compared to Q1 2007 and 0.3% increase above previous quarter

* Quarterly NGR per active Casino and Poker customer reached US$267, an
increase of 17% compared to Q1 2007 a 1% decline from previous quarter as a
result of slightly faster increase in active players than NGR increase during
the period

* Casino quarterly NGR per active customer reached US$453, an increase of 23%
compared to Q1 2007 and a 5% decline from previous quarter as a result of
the exceptionally high Q4 2007

* Poker quarterly NGR per active customer reached US$128, an increase of
3% compared to Q1 2007 and 2% above previous quarter

* As at 31 March 2008, 888 had 4.9 million real money registered customer
accounts, representing an increase of 27% in real money customer
accounts since 31 March 2007

There are a number of interesting observations for sector watchers who I imagine regular readers of netbetblog must be.

This is the issue of declining or slowing Poker revenues. This is an issue we need to get to the bottom of. Is it just 888.com? No it isn't. PRTY have seen similar numbers.

True PKR are doing well (the favorite of this blog - search for Netbet on PKR and lets have a game of poker). Equally, Pokerstars and TitanPoker are using their US honed marketing intelligence to clean up (but they are also seeing slowing revenue growth).

Is the boom over? Have all the fish been cleaned out leaving only sharks to feed on each other?

I am still optimistic - internet penetration can only grow and poker is the best game in town.

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