William Hill's Q4 online profits drop 6%
Digital net revenues rise 3% thanks to growth in Australia where it confirms single-brand strategy
William Hill’s online profit dipped 6% in the final three months of 2014 despite a bumper quarter for gaming and a boost from its Australian business, the company announced this morning.
A tricky Q4 in terms of sports betting results meant a frustrating end to 2014, however Hills posted rises in full-year group revenues and profit of 8% and 11% respectively, the latter representing a company record of £371m.
Net revenues from online gaming grew 11% and mobile revenues 86% in Q4 to account for 38% of the total egaming business.
But while online sportsbook wagers – excluding Australia – increased 16% in the three-month period at a margin of 6.8%, revenues were hit by unfavourable football and horseracing results.
William Hill CEO James Henderson cited Boxing Day in particular as a “very good day for the customer” with all but one of the top 10 football favourites winning that day.
Mobile now accounts for 50% of online sportsbook wagering, the company said, a huge rise from the 23% quoted this time last year.
Henderson praised the operator’s recent geographic diversification and said 18% of revenues are now derived from outside of the UK – a fact he said left it “very well positioned” to cope with the country’s new PoC tax.
Meanwhile the company also announced that it is to rebrand its entire Australian operations – made up of Tom Waterhouse, Centrebet and Sportingbet – to the William Hill brand.
Operating profit from the country increased by 59% in Q4 as net revenues rose 9% despite a 19% fall in amounts wagered.
“William Hill Australia’s potential has been significantly improved as a result of our management changes, the restructuring of our operations, increased marketing effectiveness, enhanced user experience and the ongoing expansion of the product range,” Henderson said.
“Using the William Hill brand in Italy, Spain and the US, alongside the UK, has already proved highly successful. I believe now is the right time to adopt the William Hill brand in Australia.”
Barclays analyst Patrick Coffey said this brand integration is “the right long-term approach” but highlighted downside risk in the short term from customer migration.