Online revenues rise but exceptional costs hit William Hill
UK bookmaker William Hill has reported a £819.6m statutory loss before tax in the first half (H1) of 2018, down from a £93.6m profit a year ago.
The bookmaker has blamed the UK Government’s ruling to slash fixed odds betting terminals (FOBT) stakes from £100 to £2, which has resulted in exceptional charges of £916m for H1 2018.
Shares in the company fell 7% this morning in reaction to the news.
Retail operations also continue to struggle outside of the impact of the triennial review. Net revenue fell 3% across the retail business, which was another direct result of the decision to cap FOBT stakes. The operator was also fined £6.2m in February by the UK Gambling Commission for failures relating to customer protection and preventing money laundering.
In March, Hill announced that it would be pulling out of the Australian market and it unloaded its operation there to CrownBet, in what was a costly foray.
Despite the loss and exceptional costs, Hill’s financial report for the midway point in the year was not all doom and gloom.
Online revenues were up 11% on the year as the operator continues to perform strongly online. Net revenue was £320.9m for the period, which was up from £290m last year. Sports betting helped to power this increase, with sports betting revenue up 18% on the year, helped largely by the summer’s FIFA World Cup.
Gross win margins increased to 8.3%, a rise of 1.4% on the year, although this had a negative impact on recycling, with amounts wagered down to £2.4bn, a fall of 5%.
Philip Bowcock, chief executive officer at William Hill, said:
William Hill has performed well during the first half of 2018 and, following major regulatory decisions in the UK and US, we now have greater clarity over the challenges and opportunities that lie before us. During the first half, our Online business continued to deliver double-digit growth. In Retail, we are beginning to put in place plans to mitigate the impact of the Triennial Review.– Philip Bowcock, William Hill chief executive officer
Further positives lie on the horizon in the US. William Hill is leading the charge in taking advantage of the newly open sports betting market in the US, signing deals with multiple casino and resort operators to offer sports betting.
Hill also took its first sports bets at its Monmouth Park racetrack outlet in New Jersey and announced yesterday it has signed more deals with casinos in Mississippi and West Virginia.