William Hill pre-tax profits fall 7 percent in H1-2017
News on 2 Aug 2017
News on 2 Aug 2017
Online operations for H1-2017 at William Hill plc significantly outperformed the retail side of the business in terms of revenue growth, according to the company’s interim report released Wednesday.
Online, which now accounts for 35 percent of group revenue, saw betting amounts go up 11 percent compared to just two percent in the group’s high street retail shops, where revenues declined 2 percent year-on-year to GBP 460.1 million as sales costs rose.
Retail wagers rose 2 percent y-o-y to GBP 1.2 billion, but punters are placing bets worth twice as much in the group’s online operations, where mobile growth boosted the digital division performance. 81 percent of Sportsbook net revenue was generated through the mobile channel, up from 70 percent in the corresponding period last year.
Online activity delivered improvements in amounts wagered, gaming net revenue, new accounts and active customers, the company reported.
Gaming proved to be the fastest growing segment, with revenue up 10 percent at GBP 150.9 million.
Overall, group pre-tax profits slipped 7 percent y-o-y to GBP 93.5 million, despite revenues increasing 3 percent at GBP 837 million. Operating profit was down 1 percent at GBP 129.5 million.
The dip in profit did not discourage shareholders and investors, with the share price topping 10 percent in early morning trading.
Observers noted the similarity in the pattern of results (declines in retail action) between William Hill and its main rival, Ladbrokes Coral.
William Hill CEO Philip Bowcock reported that the company had made good progress on strategic objectives that included product improvements, better marketing and growth in new customers, with momentum building in the digital division a result.
He said that a priority is now to grow UK market share, noting that adjusted operating profit in this sector had declined 14 percent year-on-year to GBP 80.9 million, primarily due to increased staff costs and weak sporting results.
Bowcock sounded a cautionary note on Fixed Odds Betting Terminals in the company’s retail betting shops, saying that whilst revenues were up 3 percent in H1 at GBP 250.1 million (54 percent of retail shop revenues), this source of income was under threat by media and political pressure for lower staking limits.
Turning to transformation strategies, Bowcock said that he was confident that the promised GBP 40 million in annualised savings would be achieved by year-end, helping the company to turn in good results at the end of the year.
