Australian operational woes weigh heavily on William Hill results

Despite a solid operational performance and positive revenue numbers in FY 2017, online and land gambling group William Hill plc slid into a loss of GBP 74.6 million – down year over year from a GBP 181.3 million profit achieved in 2016.

The cause was primarily the need for a write-down of GBP238.3 million as a “goodwill impairment” following “adverse tax and regulatory changes” in the increasingly tough Australian market.

A GBP 6.2 million settlement with the UK Gambling Commission over regulatory issues (see previous reports) and charges related to a group-wide transformation program did little to help the negative situation.

The group delivered FY revenues up 7 percent year-on-year at GBP 1.7 billion, with adjusted operating profit up 11 percent y-o-y at GBP 291.3 million, mainly due to a 13 percent year-on-year growth in the digital divisions of the company.

The company claimed that it is gaining market-share in both the retail and online sectors of the UK market, and that its online and retail businesses are growing at or above market growth rates

The gambling group is currently conducting a review of its Australian business, a course it committed to late last year as legislative changes continued to make viable operations in the country more difficult.

In his report, CEO Philip Bowcock observed:

‘William Hill begins 2018 in a stronger position after a year of significant change for the business.

‘We continue to gain ground in the UK where customers are responding to our improved Online and omni-channel offers.

‘We are a leader in sports betting in the US and are well positioned to benefit should more states start to regulate if the pending Supreme Court decision is positive.

‘Looking ahead, we will invest in more innovation in online and our omni-channel platform, as well as in the US to ensure we can unlock its full potential at the right moment.

‘A key pillar of our strategy moving forward will be to act in a sustainable way. While it is imperative that the gambling sector as a whole embraces this, there is no doubt that leading brands like William Hill must play a key role in setting the right standards and taking greater account of all our stakeholders.’

The board of directors recommended a final dividend up by six percent to 13.2p per share.