In-play surge powers William Hill profits
Strong online and in-play performance pushes William Hill full-year profits to a predicted £275m for 2010.
William Hill’s full-year profits will be at the top end of expectations due to a surge in online and in-play betting in 2010, Britain’s biggest bookmaker announced in a trading update to the stock exchange this morning.
The company said online had performed “strongly” due largely to increased awareness and advertising of its in-play products. Total online net revenue year-on-year grew 24% while its sportsbook performed strongly with turnover up 57% and in-play turnover up 114%.
The group, which has around 2,300 betting shops in Britain and Ireland, said it expected an operating profit of around £275m for its year to 28 December compared to £258.6m in 2009. Sportsbook gross win margin was at the top end of the group’s expected range at 8%.
Neil Cooper, group finance director at William Hill, revealed that even with the significant rise in in-play turnover, approximately only 35% of sportsbook revenue is generated from the piopular form of live bgetting. However, he attributed this to the fact that William Hill’s in-play provision for horse racing is yet to be launched.
“[The 35% figure] is probably lower than the norm at the moment but we probably have higher horse-racing betting online than some of our peers,” he said in a conference call given to city analysts this morning. “If you strip out the horse-racing then it is probably closer to 50-50 but we have not launched in-play on horse-racing yet,” he added.
Cooper also expressed his satisfaction with the overall progress of the group’s in-play results. “We have continued to advance our in-play platform with advertising during football on ITV and sky and we are seeing more traction there.”
Elsewhere, online gaming net revenues grew 5%, with a “good performance” in bingo helping to offset the adverse impact of its French closure, which resulted in a flat casino performance. It did not mention poker.
This resulted in an operating profit for William Hill Online 22% higher than the previous year and a non-controlling interest for Playtech of £5.9m for the fourth quarter and £26.3m for the year as a whole.
Cooper explained the performance of casino was a reflection of the company’s withdrawal from France, with the lack of revenue from that particular market proving the difference between the casino ending up or down in comparison with 2009’s figures.
He admitted that the UK had increased its contribution to William Hill’s online revenue “ partially as a result of developments in France “ but was reluctant to comment on whether any revenue had been brought in from Italy in 2010.
He did, however, reveal that “William Hill Online is making no revenue in France, but as for Italy, that’s a market we are excited about. We are going through pre-licence process before we can launch the casino there. It is a key priority for us in 2011″
William Hill saw a 3% increase in net revenue for the first half of 2010, boosted by its “best ever” World Cup and a strong performance in its online division, it said during its interim results announcement in August.
“This is a strong performance and our online business and the gaming machines in our shops continued to see encouraging revenue growth during Q4,” Ralph Topping, the group’s chief executive said.
“Our continuing technological developments in what is a fast changing industry have underpinned growth and the doubling of our turnover from in-play this year demonstrates that customers are welcoming these innovations,” he added.