Mixed Results For William Hill In First Half of 2018

William Hill see strong growth online, but brace for a huge hit in retail due to upcoming FOBT limits.

British sports betting giant William Hill today published half-year results, noting ‘solid progress,’ though experiencing a major loss because of £900+ million adjustment.

The FTSE listed bookmaker has accounted for a huge £916 million adjustment, including a “£882 million non-cash impairment” to adjust to the new realities after UK governments controversial Triennial Judgement slashed maximum wagers on FOBTs to just £2.

Company Financials:

  • Group net revenue up 3% to £802.6m
  • Adjusted operating profit from existing operations1 up 1% to £130.8m
  • Exceptional charge and adjustments of £915.9m including £882.8m non-cash impairment to Retail following Triennial Review decision leading to a statutory loss before tax of £819.6m
  • Proceeds of £241.7m received from disposal of Australian business and investments in NYX
  • Balance sheet remains strong and flexible with net debt for covenant purposes6 of £272.4m, 0.8x EBITDA
  • Interim dividend in line with prior year at 4.26p per share

Online:

  • Total online net revenue growth of 11%
  • Online sportsbook net revenue growth of 18% and new accounts growth of 16%
  • Online gaming revenue grew 4%

Retail:

  • Revenue down 3%, in part due to horseracing cancellations

USA:

  • Net revenue in US business up 50% and adjusted operating profit up 132%
  • First bet in New Jersey accepted at Monmouth Park in June
  • New sportsbook launched at Ocean Casino in Atlantic City
  • Expansion in Delaware as risk manager for state lottery
  • Deal signed to run sportsbooks at 11 casinos in Mississippi and 1 in West Virginia

Though William Hill is obviously facing some major challenges with its retail high street operations in the UK, online operations are experiencing strong growth, and the bookies had a good FIFA World Cup, with more than one million actives across the tournament.

William Hill have positioned themselves to be one of the strongest sports betting operators in the post-PASPA US market and are responding rapidly to opportunities as they present themselves, boding well for their long-term success.

The bookmaker has also made considerable efforts to put in place an industry-leading socially responsible gambling strategy aimed at significantly reducing gambling-related harm – another astute business move to ensure sustainability in an increasingly scrutinised industry.

Philip Bowcock, Chief Executive Officer of William Hill, commented:

“William Hill has performed well during the first half of 2018 and, following major regulatory decisions in the UK and US, we now have greater clarity over the challenges and opportunities that lie before us.

“During the first half, our Online business continued to deliver double-digit growth. In Retail, we are beginning to put in place plans to mitigate the impact of the Triennial Review. In the US, we have moved quickly following the repeal of PASPA as we grow into newly regulating states. We will continue to invest in the US to ensure we are well placed to capture the substantial potential available to us.

“Fundamental to delivering over the long term will be our sustainability strategy, which marks a significant cultural change for the company. Gambling-related harm is a serious issue and it is important that we face up to this challenge. We have set ourselves the ambition that nobody is harmed by gambling and set out a detailed programme of actions as we start out on this journey.”

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