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William Hill counters the trend with upturn in bets
Britain’s biggest bookmaker William Hill saw an upturn in bets placed over-the-counter in its shops and money taken by its gambling machines at the end of 2011.
The company, which has main offices in Leeds and London, takes more than a million bets a day. It reported 11 per cent growth in over-the-counter bets for the fourth quarter compared with the year before and a seven per cent rise in gross win – total bets minus payouts – from its gambling machines.
William Hill said it was in good shape despite challenging conditions and a run of success for punters betting on football.
Chief executive Ralph Topping described the company’s performance in 2011 as “very positive” and said there were good opportunities for the business beyond its traditional roots as more governments open up to regulated gambling.
He said: “Going into 2011, we were, like many businesses with a strong presence in the UK, predicted to face a challenging consumer backdrop, but our overall performance shows we’ve seen the benefit of being a predominantly low ticket leisure activity.”
The company has around 3,000 staff in Yorkshire, including more than 1,100 in Leeds, its original home and now the location of its retail operational office and online operations.
William Hill’s performance contrasted with weak performances from British retailers who have struggled to negotiate tough trading conditions.
Mark Brumby, an analyst at Langton Capital, said: “The group’s exposure to the ‘low ticket leisure activity’ of sports betting has helped it to perform steadily in a tough year and it will continue to invest for the future.”
Growth in over-the-counter betting has generally lagged that of online in recent years leading some to doubt the long-term viability of betting shops.
However, Investec analyst Paul Leyland said William Hill’s performance offered a rebuttal to that theory.
“We see this as a highly encouraging result, especially the Q4 OTC volume growth of 11 per cent,” he said. “Most significantly, we see continued OTC volume growth undermining the ‘structural decline’ thesis, potentially driving a re-rating as well as upgrades.”
For the year as a whole, William Hill said it would meet market expectations with net revenue expected to be up six per cent and operating profit expected to be around £274m, compared to £276.8m in the year before, which was boosted by the World Cup.
Mr Topping said: “This is a very positive performance, particularly in a year without a significant international football tournament and with a £9m rise in VAT payments as a result of the rate change.”
William Hill said its over-the-counter gross win margin was 17 per cent in the fourth quarter, down two percentage points on the same period the year before.
That reflected a high number of favourites winning in Premier League football and customers taking advantage through wins on accumulator bets.
The company said William Hill Online, its joint venture with Playtech, had achieved net revenue growth for the year of 28 per cent, benefiting from a 51 per cent rise in sports betting.
William Hill also said yesterday that it had awarded an exclusive contract to Inspired Gaming to supply machines to its shops.
Machines have been an important driver of growth to betting shops in recent years. The company has been trialling a three-screen version of its gaming machines in 100 betting shops, enabling it to boost its marketing and rewards offer.
These cabinets will now be rolled out as part of the agreement with Inspired Gaming, which currently supplies 79 per cent of the William Hill estate with high-definition, 22-inch dual screen technology.
Yesterday’s update showed machines generated an average of £924 for William Hill each week in the final quarter of 2011.
Numis analyst Ivor Jones said: “These are excellent results.”
lizzie.murphy@ypn.co.uk
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