William Hill Online H1 profits plummet 33%

William Hill’s sluggish online performance continued in H1 2016, with the operator this morning reporting a 33% fall in profits following a 3% decline in revenues and higher marketing costs.

The bookmaker recorded a £43.4m operating profit for the six months ended 30 June, down from £64.6m in the corresponding period last year, while online net revenue fell from £286.6m to £277.2m.

Online revenues during H1 were hurt on a comparative basis by the closure of five international markets during mid-2015, lower gross win margins and a large number of customers using the new time-out/automatic self-exclusion tools.

The acceleration in the number of time-outs and self-exclusions led to a 6% year-on-year decline in gaming net revenues, down from £145.6m to £137.3m, with core markets down 5% and non-core markets down 9%.

Sportsbook revenues fell 1% year-on-year to £139.9m, despite generating a better-than-expected £16.5m from Euro 2016 and increasing its marketing by 12% to approximately 25% of net revenue.

However, the operator reported strong mobile growth during the six-month period, with revenues from the channel increasing from 63% of sportsbook net revenue in H1 2015 to 70% this year.

And William Hill’s interim chief executive, Philip Bowcock, said the operator had taken “considerable steps” during H1 2016 to improve the company’s overall digital performance.

“The refocused team has delivered substantial upgrades to the mobile sportsbook customer experience, which is now back to competitive levels,” he said.

“Our recent investment in NYX/OpenBet and acquisition of Grand Parade further accelerate our ability to innovate at speed and enhance the customer experience moving forward.

“Looking ahead, our immediate priorities are to continue the recovery in Online, to leverage our technology improvements across the business and to advance a focused approach to international growth.”

The operator’s international business saw net revenues from Italy and Spain increase 19% year-on-year, helping the two markets record a £0.5m operating profit, while revenues from non-core markets declined 10%.

Meanwhile, the William Hill’s Australian business reported a 10% fall in net revenues on a local currency basis, despite a 13% increase in amounts wagered, as poor horseracing results led to lower than expected gross win margins.

Overall group revenues, including William Hill’s retail arm, grew marginally from £808.1m to £814.4m, while operating profit was down 16%.

William Hill’s share price was up 0.41% to 314.60p on the London Stock Exchange at the time of writing.