Operating profit falls for William Hill in ‘challenging year’
William Hill posted a 10% fall in its annual operating profit as the UK bookmaker cited challenging trading conditions and unfavourable football results.
The company’s profit for the 12 months through to December 27 fell to £261.5m (€310m/$328m) from £291m, while earnings per share fell by 13% year-on-year.
Revenue increased slightly to nearly £1.6bn despite a 3% fall in online business revenues.
William Hill highlighted “positive trends” in all four of the company’s divisions in the seven weeks through to mid-February, including encouraging improvement in online, with UK sportsbook wagering up 10% and UK gaming net revenue up 8%.
The company added that it would aim to boost UK market share with increased investment in product, marketing and omni-channel, and would also continue its international revenue growth and diversification with “focused investment”.
William Hill also embarked on “a transformation programme that, by increasing efficiencies, will provide about £40m of capital to reinvest in product, marketing and technology; and a programme with OpenBet to build a global technology platform for the group over three years”.
Interim chief executive Philip Bowcock said that 2016 was a “challenging year”, but added that William Hill had made “considerable operational progress, leaving us well-placed to drive the business forward in 2017”.
He added: “We have delivered extensive product, user experience and marketing improvements in online, modernised our retail management structure to focus more on the customer and continued to grow in our key international markets. There are now encouraging signs in all our divisions, in particular online's UK business, which is now delivering sustained growth.
“Looking forward, we want to keep improving the customer experience. This means making it both fast and easy, as well as enjoyable and personal, to bet with William Hill. To do this, we are expanding our product range, increasing our marketing investment and deploying our technology assets and expertise in key areas. At the same time, we expect our transformation programme to continue delivering important efficiency savings that we can reinvest to deliver an even better customer experience and faster growth.
“We have a clear strategy to take the business forward and grow market share in the UK, while expanding our revenues internationally.”
Barclays analysts said in a note that the company showed positive momentum and that there were “early signs the online division is turning a corner”. The analysts said: “Going forward, the key to WMH delivering upgrades or a re-rating will be the performance of [the] European Online division.”
There was no mention in William Hill's publication of the results of Bowcock’s future, with the Financial Times having reported earlier this week that he was due to be appointed as chief executive on a permanent basis imminently.
Related article: Bowcock set for full-time William Hill CEO role – report