28th Feb 2014 09:55
LONDON (Alliance News) - Betting company William Hill PLC Friday reported lower 2013 profits due to higher finance and acquisition costs and investments it made in its online business, but revenues grew strongly, it raised its dividend, and said trading had turned around in February this year after a difficult January.
The results showed William Hill's continued outperformance compared with big rival Ladbrokes, after the FTSE 250-listed company earlier in the week reported a huge drop in profits and only a slight increase in revenues as its efforts to build a bigger online business continued to stumble.
William Hill said its online net revenue was up 12% in its last financial year, while revenues from its traditional retail stores also rose 10%, with total net revenue up 18% to GBP1.49 billion in the 52 weeks to December 31, 2013, from GBP1.25 billion in a comparative period in 2012. The rise was 16% over a 53 week comparative period.
However, pretax profit fell to GBP257 million, from GBP274.2 million, over the 52 week period, as acquisition and finance costs rose and it invested in the online business.
During the year, the company built an Australian business by buying Sportingbet and tomwaterhouse.com in the country, and took full control of its online operation as it bought back a 29% stake held by Playtech.
"Online's Sportsbook performance continues to be sparkling, with staking levels up around 400% over the five years since the start of 2009. Mobile Sportsbook represents 39% of Sportsbook wagering in 2013," William Hill said.
"Our product range is vastly expanded and the customer experience is greatly enhanced, with more improvements to come in 2014. The results reflect this, with mobile gaming net revenue growing by 175% on a 52 week basis," it said.
William Hill said it will pay a final dividend of 7.9 pence a share for 2013, bringing the total dividend to 11.6 pence, up from 10.4 pence in 2012.
In January, both William Hill and Ladbrokes warned that they had been hit by a weekend when an unusually high number of favourites won their football matches, meaning bookmakers paid out large amounts on so-called accumulator bets, where punters get a payout if all their match result predictions prove correct.
Friday, William Hill said gross win margins had stayed unfavourable during January, but have been more positive in February. Over the first seven weeks of 2014, the gross win margin in its retail operations was 16.8%, down from 21.7% in the same period of 2013, and 6.6% in its online sportsbook, down from 11.0%.
However, it said wagering volumes had continued to improve, while it had also benefited from a lack of snow that kept punters out of its shops in early 2013.
It said over the counter net revenues were down 20% over the seven week period due to the hit on margins from the unfavourable sporting results, but group net revenues were up 5% as gaming machine net revenues rose, and online revenues were also rescued by a rise in gaming sales.
"At this early stage in the year, the board is confident in the underlying growth trends of the Group's trading performance, particularly with further outstanding growth in Sportsbook amounts wagered and stronger growth rates in online gaming," it said.
"Though there is no certainty that we can recoup the shortfall against internal expectations from sporting results in January, we remain hopeful of a positive benefit from increased customer confidence, particularly with so much of the football season ahead and with the 2014 World Cup to come," William Hill added.
William Hill shares were up 2.6% at 384.5 pence Friday morning, the third-biggest percentage gain on the FTSE 100.
By Steve McGrath; [email protected]; @SteveMcGrath1
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