William Hill gaming drives 12% online revenue growth
Online gaming revenues rise 18% year-on-year as online contributes 52% of Group profit
William Hill posted a 12% year-on-year increase in H1 2014 online net revenues this morning after a strong performance from its mobile gaming business and a “record-breaking” World Cup.
Online revenues for the six months ended 30 June increased to £261.1m, up from £233.9m during the same period last year, while the Gibraltar-licensed firm’s online operating profit slightly increased by 1% to £81.1m.
Net revenues from online gaming increased 18% year-on-year to £139.7m, following 146% growth in mobile gaming, with revenues from its gaming business now outstripping William Hill’s sportsbook by nearly £18m.
Online casino revenues were up 25% year-on-year while bingo and poker revenues fell 6% and 17% respectively.
William Hill also reported a successful World Cup with online wagers during the tournament 211% higher than the 2010 competition.
Total sportsbook wagers during the six-month period increased 41% year-on-year, contributing to a 5% growth in online revenues from its sports betting arm of £121.4m.
William Hill Australia, which the company described as its second home earlier this year, reported a 7% year-on-year increase in revenues and a substantial “near doubling” in operating profit after launching a new Sportingbet site and integrating tomwaterhouse.com onto the proprietary William Hill platform.
The operator also said growth in Italy and Spain had been strong, with net revenues up 44% and 101% respectively although still posted a combined operating loss of £2.8m.
During the period, 82% of total online revenues were derived from the operator’s core markets of UK, Australia, Italy, Spain and the US.
And in his first set of results since replacing long-serving CEO Ralph Topping, William Hill’s new chief executive James Henderson highlighted the importance of the company’s international business for long-term growth to help “diversify” the company.
“We have already strengthened our global reach with two home markets and evolving opportunities in Spain, Italy and the US,” he said.
“I believe this is the right strategy and I will be looking hard at how we can continue to create shareholder value in developing a focused but internationally oriented gambling group,” Henderson added.
Ivor Jones, analyst at Numis, said the results were “impressive on top but rather less elegant when you look underneath” although added the operator was in a good position to generate future growth and noted the online channel’s profit contribution.
“52% of EBIT came from online channels and online sportsbook turnover was up 41% indicating a much stronger business base on which to capitalise once margins normalise,” Jones said.
Overall group revenue also increased 7% year-on-year to £805.2m, up from £751.6m in H1 2013, although operating profit fell slightly to £176.9m, a 2% decrease from £181.4m.
William Hill’s share price was down 4p to 348.50p on the London Stock Exchange after early morning trading.