Aug 3, 2018
No luck for William Hill as betting terminals review hits profits
UK bookmaker William Hill reported a loss before tax on Friday following the UK government's clamp down on fixed odds betting terminals, but announced plans to expand further into the US. In the six months to June 27, the FTSE 250 company said exceptional charges of £916m had pushed it to a pre-tax loss of £820m, compared to a £93m profit in the same period last year. These charges included £883m associated with the government's decision in May to cut the maximum bet for fixed odds betting terminals from £100 to £2, which William Hill said on Friday would have "Long-term consequences" for the business. Adjusting for these charges, William Hill said pre-tax profit fell 13 per cent to £96m, while earnings per share fell 18 per cent to 9.1p. However, adjusted operating profit on existing operations, which strips out £17.2m associated with the group's expansion into the US market and additional restructuring costs, rose 1 per cent, and revenue rose 3 per cent to £803m, helped by the football World Cup tournament. The group's online business performed particularly well, with sales growth of 11 per cent, although sales were down 3 per cent in brick-and-mortar stores amid a "Challenging" high street environment in the UK. Also on Friday William Hill announced plans for expanding its US presence, including opening 11 casinos in Mississippi and partnering with a casino in West Virginia, pending regulatory approval. As a result of the ruling on fixed odds betting terminals, the group said it planned to remodel its retail business in the UK. In May, William Hill said early estimates suggested just under 40 per cent of its existing retail stores could become lossmaking as a result of the change in rules, with "a proportion of these . . . at risk of being closed within a relatively short time of the proposed staking change being implemented", and the rest being monitored.
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