16th Mar 2020 15:49
(Alliance News) - Bookmaker William Hill PLC on Monday decided against the final dividend for 2019 and warned on a major impact on earnings due to Covid-19.
The pandemic has led to major sporting events around the world being cancelled or postponed. Some 53% of William Hill's revenue in 2109 came from sports betting.
William Hill is making forecasts assuming the European Football Championships this summer will be postponed, UK retail shops being forced to close for a month, as well as the Grand National and Royal Ascot horse racing events being cancelled.
If this happens, William Hill sees earnings before interest, tax, depreciation, and amortisation being knocked by GBP100 million to GBP110 million. If retail shops have to close, it would hurt Ebitda by GBP25 million to GBP30 million a month.
Earlier on Monday, rival GVC Holdings PLC, the owner of Ladbrokes, warned Ebitda could be hit by as much as GBP150 million.
As a result, retaining cash will be a priority, and the dividend has now been suspended until further notice. Late February, William Hill proposed a 5.34 pence final dividend for 2019, but this will now be withdrawn.
The company has a GBP425 million revolving credit facility which remains undrawn, it added.
Before the recent cancellations, William Hill said trading had been ahead of expectations due to strong performance in both sports betting and in-store.
Chief Executive Ulrik Bengtsson said: "These are truly unprecedented times but William Hill has been around for 86 years and over that time we have gained huge experience and understanding of our customers.
"People want to place sports bets and they will continue to do so where possible. In recent days we have seen betting on horses, greyhounds, international football and our well-established virtual sports."
"We are taking action to maintain our operational capability, to secure and enhance our liquidity and to ensure we are in a strong position to resume full operations when the sporting calendar returns to normal. We have been quick to initiate our business continuity plans, which have been in place for some weeks, with our colleague's and customer's welfare highest on the agenda. Large parts of the business continue to operate on a 'business as usual' basis," he added.
Shares fell 32% on Monday to 60.54p each in London.
By George Collard; [email protected]
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