March 21, 2017 / 7:48 AM / in a year

Gaming firm 888 to pay special dividend for fifth year on profit surge

(Reuters) - British online gaming company 888 Holdings declared a special dividend for the fifth straight year as full-year pretax profit surged 82 percent, driven by strong performance in its sportsbetting and casino businesses.

The company’s shares rose as much as 7.6 percent in morning trade to hit their highest in nearly 11 years on the London Stock Exchange.

The group, which operates 888 casino, poker, sport and bingo brands, said it was recommending a final dividend of 5.1 cents per share along with an additional one-off 10.5 cents per share for 2016.

The additional payout would bring the total to 19.4 cents per share, including an interim dividend of 3.8 cents announced in August.

888 and casino operator Rank Group Plc pursued a deal last year to snap up William Hill as the gambling industry has been pressured by higher taxes and tighter regulation, while a series of mergers intensified competition. However, William Hill rejected the takeover proposals.

Investec analysts said consolidation in the sector is set to continue into 2017 and beyond.

“Given 888’s size and superior technology offering, as well as its growing Sport product vertical, we regard 888 as either a consolidator or key potential take-out target,” Investec analysts, who rate the stock a “buy”, wrote in a note.

The company said revenue at its casino division rose 21 percent, while the sports unit’s revenue grew 49 percent. Total group revenue rose 13 pct to $520.8 million.

Pretax profit rose to $59.2 million from $32.5 million a year earlier.

Shares in the company were up 5.9 percent at 248 pence at 0833 GMT.

Reporting by Rahul B in Bengaluru; Editing by Amrutha Gayathri

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