23rd Mar 2016 07:31
LONDON (Alliance News) - William Hill PLC on Wednesday issued a profit warning for 2016 due to a weaker-than-expected online performance in the year so far.
The betting company said in the period to March 20, the online business has been hit by two main factors.
First, from a regulatory perspective, the level of active players has decreased due to an acceleration in the number of time-outs and automatic self-exclusions. If this trend persists, lower revenue will reduce online's profit by between GBP20 million and GBP25 million in 2016.
Second, gross win margins in online are 1.9 percentage points below expectations in the period, as a result of unfavourable European football results and the "worst Cheltenham results in recent history".
William Hill said the broader business continues to trade well and is overall in line with its expectations.
However, taking the disappointing online performance into account, the group's overall operating profit for 2016 is now expected to be in the range of GBP260 million to GBP280 million.
William Hill confirmed that it is in advanced discussions with a partner which would see it invest in gaming software company OpenBet.
"Today's statement reflects the combined effect of our assessment of the impact of recent regulatory changes and unfavourable sporting results including the worst results at Cheltenham in our recent history. We are also experiencing softer UK growth as a consequence of acquiring lower value customers. While the rest of the group is performing in line with our expectations, we continue to focus on improving online's performance so that we can, once again, outperform the market," Chief Executive James Henderson said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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