888 Holdings, the online gambling operator, on Tuesday revealed a 36 percent rise in net revenue across 2007, a growth rate which Gigi Levy, the group's chief executive, is "bullish" on pushing into this financial year.
"Current run rate indicates 20 percent (overall revenue growth), and we are bullish on pushing this," Mr. Levy told Reuters.
"Do I think 30 percent is too much? No, I don't think 30 is too much."
Net revenue totaled $213.41 million versus $157 million the previous year.
Profits before taxes came in at $45.8 million, up 106 percent against $22.2 million in 2006.
However, net income -- or income a firm has after deducting costs and expenses from total revenue -- was down 54 percent to $34.2 million from $74.5 million in 2006.
888 said in its annual report that an estimated 85 percent of its 2006 profits derived from businesses, notably those in the United States, that are no longer active.
Mr. Levy called 2007 a "year of transformation" for the company, which in 2006 cut jobs at Random Logic, its Israel-based subsidiary, and nearly sold to Ladbrokes, the high street bookmaker, for $958.9 million.
Casino revenue -- 888's core business -- was up 33 percent to $118.1 million against $88.8 million in 2006, with poker revenue up 18 percent to $80.8 million from $68.2 million.
In 2007, 888 completed its first-ever acquisition, the bingo business of Globalcom Ltd., the Belize-based online bingo operator, and launched its new bingo brand, 888Ladies.com, which Mr. Levy said is "doing dramatically above anything we expected."
"The run rate is currently where we expected to get by the end of the year: It's that good," he said.
Mr. Levy said that the recent launch of 888Sport.com, the company's online sports book, "is already generating revenues," adding he expects the offering to remain "one of the main growth drivers of our business."
888 said it now derives 85 percent of its business from the United Kingdom and other countries in Europe.
When asked about the impacts of slowing consumer spend and rising inflation in its target markets, Mr. Levy told Bloomberg that the group "has never been impacted."
"It's (gambling) actually something people don't tend to give up in tough times."
Indeed, Simon Holliday, partner with Global Betting & Gaming Consultants, said in an e-mail last month that GBGC data from the fourth quarter of 2007 did not evince any impact from an economic recession.
"The 2007 Q4 data set was too early to pick up any impact of the recession," wrote Mr. Holliday, whose consultancy monitors the Internet gambling industry.
"I also think our 2008 Q1 data . . . will not pick it up. The early Easter and higher bonuses have boosted activity in Q1. The key issue for us is the level of drop off in activity during Q2 -- the slowest of the year."
Regarding 2008 trading, 888 said it had started "well" but did not provide metrics.
Research from Daniel Stewart & Co., the London-based brokerage, calls 888's annual report "solid but unexciting," and James Hollins, an analyst with the firm, maintains his "hold" rating on the shares and 155p target price.
"There is limited data on current trading," wrote Mr. Hollins, "and we see no reason to change our forecasts at this stage."
However, Richard Carter, an analyst with Numis Securities Ltd., said Numis feels "comfortable about nudging up [its] 2008 forecast," and is calling for profits before taxes of $63.8 million.
888 said it will pay dividends of 5 cents per share.
On the London Stock Exchange, shares in 888 closed up 3.25p, or 2.21 percent, at 150.00.
Mr. Levy could not be reached for comment.