William Hill retail challenge in YTD trading statement

William Hill delivered a mixed bag of results in a trading update for the H2 to date and year-to-date periods.

Key performance indicators include:

·    Total Online net revenue, up 4 percent YTD, with Sportsbook growth of 8 percent and gaming of 1 percent.

·    Retail net revenue was down 4 percent YTD, with Sportsbook declining 6 percent and gaming 2 percent.

·    US existing business continues to deliver strong growth in Nevada, with net revenue YTD up 36 percent in local currency.

·    US Expansion shows good volumes in early months with approximately $200m wagered, in line with the company’s expectations.  Sportsbook amounts wagered increased 15 percent.

·    Market access secured in 17 U.S. states with partnership deals signed with Eldorado Resorts, Golden Entertainment and IGT

·     Full-year operating profit expected to be in the range of GBP 225 million to GBP 245 million, assuming normalised gross win margins in the remaining weeks of the year.

Philip Bowcock, CEO, commented:

“In our existing markets, Online continues to deliver good underlying KPIs. Our greater mass market focus is successfully driving new accounts growth, up 11% YTD. As expected average revenue per user is 19% lower, reflecting the more sustainable customer base we are building, with mass market actives up 28% YTD.”

Looking ahead, the company will launch a new technology solution in 2019 incorporating the newest elements of the Group’s existing platform and a bespoke Player Account Management system from NeoGames.  The solution “is more feature-rich than any sports betting platform currently live in the US”, the update reads.

On the proposed acquisition of MRG (Mr Green) (see previous reports), Bowcock said the company’s strategy is to “build a digitally led, geographically diverse gambling business.”

The acquisition will provide William Hill with an enlarged pan-European footprint in faster growing digital markets, an established Malta hub from which to expand Online internationally and a team with a proven track record of consistently strong revenue growth.

Bowcock warned of the negative impact to online profit growth in 2018 of GBP 20 million and in 2019 of GBP 25 million directly attributed to the increase in the UK gambling commission’s remote gaming duty and more stringent KYC processes.