26th Feb 2020 08:42
(Alliance News) - Bookmaker William Hill PLC on Wednesday posted a fall in revenue but its loss narrowed sharply following the non-repeat of impairments on retail stores.
In 2019, net revenue was down 2.4% to GBP1.58 billion from GBP1.62 billion. The pretax loss slimmed to GBP37.6 million from GBP721.9 million.
In the year prior, William Hill booked GBP922.1 million in impairments largely related to its retail segment, after the UK government cut the maximum stake in fixed-odds gaming terminals to GBP2 from GBP100.
One-off costs in 2019 were trimmed to GBP134.1 million, due to the company remodelling its retail estate and closing 713 stores as a result of the maximum stake reduction.
The revenue decline in 2019 was also attributed to the maximum stake limit being implemented, though this was partially offset by growth in its US and Online divisions, the FTSE 250 firm added.
"A regulatory change of this nature is unprecedented and although the group now has nine months of trading since implementation to aid estimation of the future cash flows, the full impact of this change will not be fully known until some years after implementation," the company added.
The company cut its dividend by a third to 8.0 pence from 12.0p the year prior.
Chief Executive Officer Ulrik Bengtsson said: "2019 was a year of transition during which we executed on our ambition to diversify internationally with the acquisition of Mr Green and the continued strong growth of our US business. The group delivered a strong operating performance, ahead of our expectations and against a challenging regulatory backdrop."
The CEO added almost a quarter of William Hill's revenue is now generated from outside of the UK, compared to 15% at the previous year end.
The company hailed the US as its "biggest opportunity" and added a quarter of bets in the country are made through William Hill.
"Following the Supreme Court's decision to overturn the Professional & Amateur Sports Person Act in May 2018, the opportunity for William Hill US is significant. By the end of 2019, 14 states were live and we are in nine of them, more than any other sports betting operator," the company added.
More recently, the Gambling Commission, the UK's regulator, said it will ban online betting through credit cards, on April 14. William Hill anticipates adjusted operating profit to take a hit in the range of GBP5 million and GBP10 million as a result.
In 2019, Online sportsbook wagers were down 3.7% to GBP4.53 billion, with Retail shrinking by 1.6% to GBP2.16 billion.
The company expects its Online unit to return to growth in 2020, helped by this summer's UEFA European Football Championship.
William Hill added: "2019 was a year of transition during which we laid the foundations to deliver our long term ambition to be a digitally led, internationally diverse business underpinned by our commitment to safer gambling. We are on track to perform in line with our expectations for 2020."
Shares in the company were down 5.2% to 167.45 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
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