11th May 2016 13:55
LONDON (Alliance News) - William Hill PLC on Wednesday said a weak online performance and the disappointing Cheltenham festival results have delivered a hit to trading, as net revenue decreased in the 17 weeks to April 26 year-on-year.
Shares in William Hill were trading down 5.9% at 305.17 pence on Wednesday afternoon, the worst performer in the FTSE 250.
The betting company said group net revenue was down by 3% in the 17-week period, as gross win margins benefited from English Premier League football results but were harmed by unfavourable European football results and a "disappointing" Cheltenham festival.
In March, William Hill warned the "worst Cheltenham results in recent history" and a weaker-than-expected online performance would drag on its operating profit for 2016, bringing it down to between GBP260 million and GBP280 million, from GBP291.4 million in 2015. It maintained this guidance on Wednesday.
On Wednesday, the company said that although wagering in online core markets continues to grow, it is still slower than expected, leading to a 9% net revenue decline in core markets in the 17 weeks. Other markets in the online category experienced a fall in wagering and 23% drop in net revenue, meaning overall online net revenue decreased by 11%.
William Hill added that the online business continues to be hit by a decrease in the level of activity among players due to regulatory changes relating to time-outs and self-exclusions, which it had warned in March were harming its results.
Self-exclusions are a feature required by law to be offered by bookmakers where punters can exclude themselves from betting with a particular operator for a set period of time. During that time, which can range from 24 hours to five years or permanently, customers will not be able to participate in any betting at all.
Time-outs are a similar feature which came into force at the end of 2015. These allow punters to limit the amount of time they spend on a betting site in a single session or day and are mainly used for games, slots and casino.
William Hill said in March that if the trends seen in self-exclusions and time-outs persist, the subsequent lower revenue will reduce profit in the online business by between GBP20 million and GBP25 million in 2016. On Wednesday, the company said the trends remain unchanged.
Meanwhile in retail, 2% growth in net revenue in the 17 weeks was achieved thanks to an improved performance in gaming machines. Gaming machine net revenue was up 4% in the period.
William Hill said it is on track to have more than 500 proprietary self-service betting terminals in its shops before the start of the Euro 2016 football tournament and a minimum of 2,000 by the year-end.
Geographically, William Hill said trading in Australia continues to be encouraging, with active customers up 1% and new accounts up 46%, while the US business performed strongly with net revenue growing by 46% boosted by a positive Super Bowl result in February.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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