William Hill has continued to feel the hit from the £2m FOBT maximum stake limit, as increased investment across the US also reflect the group’s period of transition.
Stressing that the firm hit the $1bn wagered mark during 2019’s first half of the year, as well as enjoying 27 per cent market share across seven states, performance during the period was in line with expectations, with full year financials also set to fall in line with previous guidance.
Adjusted operating profit for the period fell 33 per cent to £76.2m (2018: £113.6m), with the firm stressing that the major contributing factor was a increase in start-up costs associated with manoeuvres made in various regions of America.
Lauding its US moves, where William Hill currently enjoys a presence in eight states, with two more to go live imminently, developments concerning the proposed Caesars Entertainment and Eldorado Resorts merger were also addressed.
If completed, the deal would provide access to 34 additional casinos which it’s anticipated would generate in the region of $20m-35m additional retail EBITDA within three years, and to five incremental states including New York.
Philip Bowcock, CEO of William Hill, commented: “We are making good progress against the five-year strategy we outlined last year, delivering strong revenue growth in the US and other international markets and positioning William Hill well for future growth.
“We continue to expand rapidly in the US, both in Nevada and in the new states, with over $1bn wagered with us in the first half. We are now live in eight states and will expand into at least two more states in H2.”
Online international revenues for the firm grew 66 per cent in the period, driven by the acquisition of Mr Green, with online UK net revenue down 1% reflecting weaker sports results year on year.
“Online International revenues have grown strongly, up 66 per cent, with the acquisition of Mr Green. We are becoming more diversified with non-UK markets now contributing a third of online’s revenues, up from just 24 per cent last year. In the UK, performance has improved through the half, up seven per cent in Q2, as we manage the tax and regulatory impacts,” noted Bowcock.
Total group net revenue for H1 grew one per cent to $811.7m, impacted by the £2 stake limit on gaming machines in betting shops and reflecting the acquisition of Mr Green.
Furthermore, the group also revealed exceptional charge and adjustments of £114.3m, including £97.1m relating to mitigation measures following the £2 stake change, including the proposed closure of approximately 700 betting shops, leading to a statutory loss before tax of £63.5m.
Bowcock concluded: “In retail we took the tough decision to announce a consultation process over the proposed closure of around 700 shops to protect the long-term future of the business following the introduction of the £2 stake limit.
“The response of our colleagues has been incredibly professional during this difficult time and I would like to thank each and every one of them for that.
“Underpinning William Hill’s progress is our sustainability strategy and long-term ambition that nobody is harmed by gambling. The voluntary whistle-to-whistle ban has begun and we have, together with other leading operators, committed to a significant increase in funding for safer gambling measures, including for treatment. We continue to work on additional measures to protect our customers and lead the regulatory agenda.”