Online operations boost William Hill results

On Friday British land and online gambling giant William Hill plc announced its interim results for the 26 weeks ended 2 July 2013 (H1 2013), comparing them with the first 26 weeks in H1 2012.

CEO Ralph Topping was able to boast significant strategic progress and continued momentum, with online and mobile operations delivering double-digit operating profit growth, expansion investment around the GBP 900 million mark…and new acquisitions worth GBP 459 million in Australia following the deal with Sportingbet.

The betting firm reported group net revenue up 20 percent to GBP 751.6 million, with retail net revenue contributing GBP 463.6 million, and overall operating profit up eight percent to GBP 181.4 million.

The group’s online gaming business continued to prosper, thanks mainly to a 44 percent rise in online sports book revenues which boosted revenue growth to almost GBP 234 million – up 18 percent.

Topping revealed that future plans include innovation and investment in mobile gaming; rolling out the next generation gaming machine in it’s 2,400 plus betting shops; and maximising the value of acquisitions for the long-term benefit of the business.

He said that the group sees strong potential in its move into the Australian market. “We are excited by the opportunity we see to develop William Hill Australia by improving our digital offer and targeting the recreational customer,” he said.

Addressing the acquisition of Playtech‘s shareholding in the William Hill Online venture, Topping commented: “Taking control of online is giving us more freedom both to invest and to use that expertise across the group, including in Australia.”

He added that the group currently has a team in Australia helping to optimise online offerings in that region.

Shares in the group have risen in value by 70 percent over the past year, ensuring happy investors in a company that can now boast a market cap of GBP 4.2 billion.

Highlights of the first half report included:

• Gained full control of rapidly growing online business through GBP 424 million acquisition of 29 percent outstanding stake in William Hill Online – a joint venture with Playtech .

• Balance sheet transformation with GBP 373 million rights issue completed on 5 April 2013 and GBP 375 million corporate bond issued on 5 June 2013.

• Outstanding growth in online sportsbook net revenue, up over 44 percent, driving overall online net revenue growth up 18 percent and operating profit growth, up 16 percent.

• Continued strong growth in mobile with mobile Sportsbook amounts wagered up 112 percent and mobile gaming net revenue up an outstanding 198 percent.

• Strong over-the-counter (OTC) gross win margin growth driving growth in Retail net revenue. Operating profit down only GBP 2.2 million despite an additional GBP 5 million taxation charge following change to Machines Games Duty in February 2013.

• Basic adjusted earnings per share +16 percent and dividend +16 percent.

• Net debt increased to GBP 821 million (2 January 2013: GBP 339 million) with impact of acquisitions offset by GBP 373 million rights issue

Topping said that the industry shift to mobile gaming is an important development and consequently the group has invested significant resources in getting the business fully prepared to accelerate this important opportunity.

With almost 200 percent growth in mobile gaming net revenue in the first half, this decision is clearly justified.

“Looking forward, we are continuing to innovate and to invest, developing mobile gaming, rolling out the next generation gaming machine in the shops and with a clear plan for maximising the value of our acquisitions for the long-term benefit of the business,” he concluded.

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