William Hill bounces back from football; WHO on track
William Hill has recovered from the string of football match draws that hit profit previously, the British bookmaker's fourth quarter results reveal, while William Hill Online (WHO)'s contribution has remained stable despite difficult trading conditions and heavy investment...
WILLIAM HILL HAS recovered from the string of football match draws that hit its profit margin, the British bookmaker’s fourth quarter results reveal.
The company’s sportsbook experienced a recovery in football in the final quarter of 2009, with gross win margin returning to its 17-18% after a particularly bad run of trading on football bets due to an unusually high number of draws combined with a run of wins by racing favourites saw it dip in the previous quarter.
Net revenue for the fourth-quarter was up 6%.
William Hill said it expected net revenue for the full-year to be around 4% higher than in 2008, with an operating profit of around £250m ($408m, 287.2m) for the full-year. Its preliminary announcement of the 2009 results will be made late next month.
William Hill Online (WHO) earnings before interest and tax (EBIT) for the full year was approximately 35% higher due to the William Hill Online-Playtech deal, which included the launch of the new Playtech casino suite into William Hill in October, although down 1% on a like-for-like basis.
Analyst Paul Leyland of brokerage Collins Stewart said: “Online revenue growth… can be implied from the -1% pro-forma EBIT contribution – in budget despite a very difficult first three quarters in terms of trading as well as marketing and infrastructure investment. We are anticipating a significant turnaround in WHO performance, led by normalising margins as well as significantly improved product and infrastructure (revenue +40%).”
James Hollins, an analyst at brokerage Daniel Stewart said: “We expect the online gaming business to have continued strongly into 2010, with the completed integration of the Playtech casino suite during Q4 2009. Given the margin outperformance in 2009, there is marginal upside pressure on our FY10E forecasts and we remain confident that the group can achieve our existing +4% net revenue growth in FY10.” This will be driven by 12% growth “from strength of the Playtech- and Orbis-supported platforms,” he said.
William Hill also announced today that chairman Charles Scott, a group director since 1999 and its chairman since 2004, will stand down by the end of 2010, and that it has appointed Investec Bank as its corporate broker alongside existing adviser Citi.
In common with other bookmakers, the wave of abandonments in UK racing in December and January may set sportsbook take back in the next quarter.