Will Hill's Aussie profits take a dive in H1-2017

Australian business media reports indicate that William Hill plc is “disappointed” with the H1-2017 performance of its Australian subsidiary after operating profit plunged 85 percent year-on-year to just A$1.1 million.

The decline is all the more remarkable given a 28 percent rise in amounts wagered in the period to A$1.48 billion, a phenomenon which management attributed to “weaker gross win margins” which hampered revenue growth.

The numbers were also adversely impacted by new Northern Territory regulations outlawing the company’s lucrative “click to call” in-play online phone offering.

William Hill plc chief executive in London, Philip Bowcock, remains confident regarding Australian operations, however, commenting:

“We continue to see Australia as an attractive market and an important arm of the business. “We expect performance to improve, benefiting from the additional content and product innovations we launched in the first half. In the second half, we are also launching new products that gamify the betting experience and increase the frequency of betting opportunities.”

Costs for the Aussie business, which accounts for about 7.7 percent of William Hill’s global revenue, also increased as the subsidiary coughed up around A$5million-A$10 million for exclusive digital vision rights to NSW horse racing. Marketing expenses also rose due to the Australian Open Tennis sponsorship taken up by the company.

William Hill warned that a proposed federal law ending credit betting could have a severe business impact, revealing that some 30 percent of stakes in Australia originated from punters betting on credit.

The company is reportedly already studying tactics to mitigate the effects of such a measure, perhaps through alternative funding methods.