William Hill is 'well positioned for growth' despite fall in profits

William Hill today said it was well positioned for growth as it expands rapidly in the US market, despite suffering a fall in adjusted half year operating profit.
William Hill has published its half year results Picture: PAWilliam Hill has published its half year results Picture: PA
William Hill has published its half year results Picture: PA

The group, which has a large base in Leeds, said its half year results were in line with expectations during a period of transition.

Over the half year, group net revenue was up 1 per cent to £811.7m. William Hill said its performance was affected by the £2 stake limit on gaming machines in betting shops and the acquisition of Mr Green, the online gambling company.

Hide Ad
Hide Ad

The company's adjusted operating profit was down by 33 per cent to £76.2m. William Hill also faced exceptional charge and adjustments of £114.3m, including £97.1m relating to mitigation measures following the £2 stake change, including the proposed closure of around 700 betting shops. This led to a statutory loss before tax of £63.5m.

William Hill said it was building a scale business in US sports betting with $1bn of amounts wagered. It has secured 27 per cent market share across seven states in the first half of the year. The company said it was also on track to launch a "market-leading and proprietary" sports betting technology platform ahead of the NFL season.

It is now live with sports betting in eight US states,and two more are to go live imminently

Philip Bowcock, chief executive officer of William Hill, commented: "We are making good progress against the five-year strategy we outlined last year, delivering strong revenue growth in the US and other international markets and positioning William Hill well for future growth.

Hide Ad
Hide Ad

"We continue to expand rapidly in the US, both in Nevada and in the new states, with over $1bn wagered with us in the first half. We are now live in eight states and will expand into at least two more states in H2.

"Online International revenues have grown strongly, up 66 per cent, with the acquisition of Mr Green. We are becoming more diversified with non-UK markets now contributing a third of Online's revenues, up from just 24 per cent last year. In the UK, performance has improved through the half, up 7 per cent in Q2, as we manage the tax and regulatory impacts.

He added: "In retail we took the tough decision to announce a consultation process over the proposed closure of around 700 shops to protect the long-term future of the business following the introduction of the £2 stake limit. The response of our colleagues has been incredibly professional during this difficult time and I would like to thank each and every one of them for that.

"Underpinning William Hill's progress is our sustainability strategy and long-term ambition that nobody is harmed by gambling. The voluntary whistle-to-whistle ban has begun and we have, together with other leading operators, committed to a significant increase in funding for safer gambling measures, including for treatment. We continue to work on additional measures to protect our customers and lead the regulatory agenda."

Hide Ad
Hide Ad

In a statement to accompany the results, William Hill said : "We were pleased to see our US strategic partner, Eldorado Resorts, Inc., announce their proposed merger with Caesars Entertainment, Inc., on 24 June. Should the transaction complete, William Hill would be the combined entity's exclusive partner for retail sports betting in the US through the terms of our deal with Eldorado, as well as having first refusal on the first skin to grant access for online betting and options on any second skin for casino and poker.

"This combination would create the largest gambling company in the US and would provide William Hill US with market access to an additional five states, including California and New York, as well as a further 34 casinos, of which 29 are in states that have passed sports betting legislation. We anticipate that the annual EBITDA contribution from retail operations at Caesars casinos would be around $20-35m within three years. This, together with profits from the US existing business and current US expansion retail operations, would see William Hill US generating c$100m of EBITDA before any investment in digital expansion states, which represents strong early progress towards our $300m EBITDA target and contribute to our investment in the US digital betting opportunity."

I.

Related topics: