PoC dents William Hill Online H1 profits
UK operator's profits tumble 20% year-on-year after taking a £35m hit from the Point of Consumption taxation regime
William Hill this morning reported a 20% year-on-year fall in H1 online profits, despite a 7% rise in revenues, as the operator took a £35m hit from the UK’s new taxation regime.
The operator’s online cost of sales, which included the Point of Consumption tax, soared 154% year-on-year to £63m as profit fell by £16.2m to £64.9m, however, underlying metrics remained positive with online revenues up 7% to £279.9m overall and 16% in its core UK market.
Online sportsbook revenues during the six month period ended 30 June were up 11% year-on-year to £134.3m and sports wagers increased 10% to £2.1bn, boosted by strong growth in mobile which accounted for 54% of amounts wagered.
The operator’s gaming arm also reported a slight rise in revenues, up 4% year-on-year with a resilient performance from its core UK, Italy and Spain markets offsetting a 26% decline in other markets.
William Hill CEO James Henderson said he was pleased with the operator’s overall performance in the face of increased external pressures.
“We have delivered a good operational performance in the past six months during a period of significant regulatory and taxation change for the industry,” Henderson said.
“Whilst factors such as the Point of Consumption tax and the increase in the Machine Games Duty rate have impacted our cost base as we expected, we continue to progress our strategy and invest in our long-term growth drivers,” he added.
Meanwhile, the operator’s Australian business reported a 10% fall in net revenues as it continued to migrate four brands into one, while revenues from Italy were up 23% and in Spain down 13% compared to the same period last year.
Overall group revenues, including William Hill’s retail arm, grew marginally from £805.2m to £808.1m while operating profit was down 12%.
In other news, the operator announced it had acquired a 29.4% stake in predominantly US-facing NeoGames for $25m (£16m), the operator’s first major expansion into the online lottery sector.
“I am particularly pleased with our move into the emerging online lotteries market, which will support our international diversification and gives us exposure to an exciting growth market in a gambling vertical which is new to us,” Henderson said.
William Hill’s share price on the London stock exchange was 390.2p at the time of writing, down 5% in early morning trading.