William Hill results: sluggish growth, WHO booming
William Hill has announced sluggish group net revenue growth in its 2009 year-end results. The company's egaming division, however, significantly outperformed the group, prompting chief executive Ralph Topping to describe William Hill Online's as "almost unrecognisable" from 2008...
WILLIAM Hill announced sluggish group net revenue growth today in its 2009 year-end results. The company’s egaming division, however, significantly outperformed the group, prompting chief executive Ralph Topping to describe William Hill Online’s (WHO) as an “almost unrecognisable” business from 2008.
Group net revenue grew 4% to hit £997.9m (1.09bn, $1.48m) from £963.7m, with a 4% dip in the retail division reducing the impact of a blast in revenue at WHO of 63% to £203.5m.
The company’s earnings before interest tax and amortisation (EBITA) fell 7% to £258.5m, from £278m in 2008.
The company blamed “significant volatility in sporting results and tough economic conditions” for the middling results. The sports volatility included a particularly bad run of trading on football bets in the third quarter that also hit arch-rival Ladbrokes, after the first 66 Premier League matches saw just four draws, compared with a five-year season average of 25% of games being drawn.
However Topping added that: “The scale and breadth of our business ensured that we were well-placed to ride out the extra volatility in sporting results and the areas affected by the economy were counteracted by good growth in gaming machines and our improving online performance.
The chief executive continued that the company “transformed” key parts of the business in 2009 including its egaming arm. “William Hill Online is almost unrecognisable from a year ago, with highly competitive gaming products, proven marketing expertise and a sportsbook that has more pre-match and live betting products,” he said.
The performance was clearly signposted, with some analysts having predicted worse. James Hollins at Daniel Stewart described the results as “marginal outperformance” against expectation with “the results already well flagged”.
Analyst Paul Leyland of brokerage Collins Stewart concluded: “William Hill has done much during 2009 to strengthen its operations and balance sheet. However, a difficult macro environment and, in particular, volatile sports results, has largely masked this transformation from a financial perspective.”
The results also compare favourably with those of Ladbrokes, which re-launched its sportsbook in January and recorded 2009 pre-tax profit down more than a quarter.