William Hill revenue largely stagnant in 2022

The tumultuous year saw the large decline in William Hill’s online segment largely offset by a resurgence in retail. The company’s retail revenue rose 52.7% year-on-year to £514.2m. The operator said this resulted from the return to normal trading levels in the aftermath of the Covid-19 pandemic.

In contrast, William Hill’s UK online business saw a 19.0% decline in revenue to £509.1m. The operator put this down to both the return of retail and enhanced customer safety checks in anticipation of the government’s gambling reform white paper.

The imposition of regulatory measures and the company’s exit from the Dutch market also hit the operator’s international online business. Revenue from these activities fell 23.1% to £212.0m.  

Despite its overall reduced revenue, the business reported a rise in its adjusted earnings before interest, taxes, depreciation or amortisation (EBITDA), almost entirely resulting from the operator’s recovery in the retail segment.

The company reported a total operating loss of £31.0m for 2022. Despite this, the group announced a profit of £168.4m, largely a consequence of a one-off foreign exchange gain.

William Hill attempts to cut costs

William Hill made a concerted effort to cut costs in 2022. While the business’ cost of sales remained broadly similar at £383.7m, the company saw reductions in its other expenses.

Its marketing expenses fell by 30.5% to £151.1m. The operator also reduced its operating expenses by another 6.7% to £583.5m. 

However, the costs of the deal – in addition to the increase in legal costs for 2022 – led to a rise in exceptional costs from £99.4m to £148.7m.

In July 2022, 888 finalised its purchase of William Hill’s non-US business. Following the completion of the £1.95bn transaction, 888 has attempted to integrate the two businesses into a single entity.

William Hill says there are now plans to migrate the business to a single technology platform for the delivery of the group’s content. William Hill said Satty Bhens, chief technology and product officer, is responsible for this work.  

888 difficulties

Following the completion of the deal, rising interest rates made it harder for 888 to service the debt it took on in order to get the acquisition over the line.  

As such, the company announced in December 2022 it would be tapping into the debt capital markets to finance €200m of acquisition debt.

These financial difficulties were followed in January with regulatory issues, when the business suspended its Middle Eastern VIP account pending an investigation into the company’s failure to follow anti-money laundering procedures.

The incident also led to the resignation of 888 CEO Itai Pazner.

As a result, 888’s share price fell nearly 70% from July 2022 to a nadir of £52 per share in late March 2023.

Since then, 888 shares have experienced a resurgence, largely driven by last month’s news that a number of former GVC executives – including former CEO Kenny Alexander – would be investing in the business through their FS Group vehicle.