1st Aug 2014 11:52
LONDON (Alliance News) - William Hill PLC said Friday that World Cup wagering drove operating profit higher in its second quarter, though this was not enough to boost its half-year results as the group recorded a drop in pretax profit.
The UK betting firm said the recent World Cup, which started in June and ended mid-July, provided it with a much need boost, but it was still not enough to make up losses from big pay-outs earlier in the year, when an unusually high number of favourites won their football matches.
William Hill shares were down 2.5% Friday early afternoon, trading at 343.90 pence.
The company said its pretax profit was GBP98.6 million in the 26 weeks to July 1, down 26% from GBP133.7 million in the first half of last year. Revenue rose 7% to GBP805.2 million, from GBP751.6 million.
"Positively, this performance reflects good profit growth in the second quarter, with underlying business progress more than offsetting the quarter's year-on-year sports betting margin declines," the company said.
William Hill increased its dividend for the half-year to 4.0 pence per share, up 8% on the 3.7 pence per share paid last year.
The company did not break out second quarter results, but said the football World cup drove trading in the second quarter. William Hill reported a "record-breaking" performance for the tournament with online wagering up 211% on 2010.
William Hill took GBP172.5 million of wagers on the World Cup, and GBP27.8 million of gross win at a margin of 16.1% from the results. Across the tournament as a whole, wagering from retail, online and telephone was GBP208 million, up GBP93 million or 80% compared with the last World Cup tournament in 2010. Gross win margin in these three channels was down 18.4%, versus 27.9%, but absolute gross win was up given the strong growth in wagering, said the company.
The adoption of mobile betting has continued at pace during the quarter, said William Hill, which said that 52% of operating profit came from online and William Hill Australia, and that international markets account for 17% of net revenue.
The FTSE 250 bookmaker has said that it plans to drive the business forward online and abroad, having now established a good presence in Australia, the US and continental Europe.
The move to drive the business further outside the UK comes at a challenging time for the UK gambling sector, as the government has tightened controls on betting shops and raised duty on high-stake gambling machines to 25% from 20%, a hike effective from March next year. Point-of-consumption tax is also being introduced at the end of this year.
Back in April, William Hill said it was planning to close 109 loss-making betting shops before the end of the year, in a bid to maintain profits in response to the UK's government tax hike on fixed-odd betting machines.
William Hill said Friday that it closed 82 shops between July and August.
Newly-appointed Chief Executive James Henderson took on the role from Ralph Topping with immediate effect Friday following his appointment at the bookmaker in July.
Looking ahead, the company said that it remains confident in its expectations for the full-year, "assuming normalised sporting results."
By Rowena Harris-Doughty and Alice Attwood; [email protected]; @rharrisdoughty; [email protected]; @AliceAtAlliance
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