William Hill cautions on £10m credit card hit after ‘year of transition’

Adjusted operating profit at William Hill has plunged 37 per cent during 2019, ahead of management expectations, as the firm warns of a potential £10m hit due to an impending UK credit card ban.

Net revenue for the firm slipped two percentage points to £1.58bn, as William Hill labelled the year “transformative” amid restructuring of its online, retail and US divisions.

The performance of online gaming operator Mr Green is said to have been “in line with expectations,” with cost synergies of £4m achieved in the first year following the £242m aquisiton.

Lauding an online performance which has grown “in line with the market for three consecutive quarters,” the newly purchased company helped gaming net revenue to a 36 per cent increase.

Group-wide net-debt rose to £535m, reflecting its group restructuring costs, US expansions, the impact on adjusted operating profit of the £2 FOBT stake limit and the aforementioned acquisition of Mr Green.   

Ulrik Bengtsson, chief executive officer, commented: “2019 was a year of transition during which we executed on our ambition to diversify internationally with the acquisition of Mr Green and the continued strong growth of our US business. The group delivered a strong operating performance, ahead of our expectations and against a challenging regulatory backdrop.”

William Hill posted a net loss of £37.6m for the period ending December 31, 2019, compared to the prior year’s £720m when bookmaker began its transformation programme, resulting in the closure 700 UK betting shops. It was said that this was due to an exceptional charge and adjustments of £134.1m, primarily in relation to the closure of shops and redundancies.

Bengtsson added: “We move into 2020 in a stronger position. Almost a quarter of revenue is now generated outside the UK compared to 15 per cent in 2018. We made positive progress with our digital platform, launching our purpose-built platform in the US and product developments in the online business in 2019. 

“We will invest in our proprietary technology as we continue to improve the competitiveness of our customer offering. We have also made great progress embedding a culture of safer gambling across the group.

“This is an exciting time to be William Hill’s CEO. Our industry is evolving and this brings great opportunities, underlining the importance of our efforts to reposition the business. We look forward to building on these foundations with a renewed focus on customer, team and execution.”