888 Bullish Over Its Online Poker Business

Online gaming operator, 888.com, has issued a pre-close trading update stating that, “Further to the Q3 KPIs and Interim Management Statement announced on 1st November, trading remains very strong especially in casino and poker.”

The company went on to say it expected its earnings before interest, depreciation, tax and amortisation to be “significantly ahead of market expectations.”

Also that, “2012 is set to be a year of major opportunity for 888, with the opening of several newly-regulated markets across Europe. The Group intends to invest in these markets in order to establish and build market share. “

However after a conference call with the company analysts Daniel Stewart & Co. issued a hold recommendation on the stock with a target price of 36p (the price at the time of writing was 36p), saying, “The company guided FY12E EBITDA toward $45m, which implies profits are in decline.

“This is as a result of increased betting taxes in newly regulated markets such as Italy, Spain and Denmark combined with the need to invest in these newly regulated markets in the shape of increased marketing spend.”

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