William Hill Posts Half-Year Results, Reveals a Profit Hit
The leading bookmaker William Hill posted its financial results for the first half of this year, revealing a significant profit hit. The company has cited retail gaming declines, struggles in the U.K. online market, and the ongoing sports betting expansion in the U.S. as factors that had the biggest impact on the latest figures.
William Hill generated £811.7 million in revenue during the six-month period that ended on June 30, which represents a 1% increase when compared to the same period of 2018. At the same time, its adjusted operating profit dropped by more than 30% to £76.2 million, while its pre-tax profit also went down, falling by 47% to £50.8 million.
Some Numbers Surged, Some Went Up
The stake reduction on the fixed-odds betting terminals in the U.K. was cited as probably the most important factor behind these results, along with the increasing costs of the company’s expansion into U.S. states that have made sports betting legal.
The renowned bookmaker recorded a 14% improvement in online revenue – £367.3 million – impacted by the purchase of MRG (operator of Mr. Green). And while international online revenue jumped to £122.4 million, its online figures in the U.K. Dropped by 1% to £244.9 million.
Betting turnover in the U.K. decreased by 5%, leading to an overall online betting revenue drop of 7% to £152.4 million. The good news is gaming surged by 37% to £215 million, although that wasn’t enough to prevent the overall segment’s operating profit to go down by 9% from H1 2018 to £54.3 million.
An even bigger reason for concern are the company’s customer-related figures in the U.K. The number of active players dropped by 11%, with the number of new sign-ups also falling, by 9%. These figures could have been much worse, but thanks to an 8% increase in average revenue per user they do not seem so awful.
U.S. Division Split into Two
William Hill also revealed its retail revenue had dropped by 12% to £391.5 million, while at the same time operating profit fell by 43% to £42.7 million. The British bookmaking giant saw its gaming revenue decrease by 25% to £186 million, with betting rising by 4% to £205.4 million.
According to available information, the company still plans to close its 700 betting shops. The majority of then will go out of business by the fourth quarter of this year, while there are no plans to increase that number… at least not at this moment.
William Hill has decided to split its U.S. division into two, for reporting purposes. So now we have U.S. Existing (Nevada) and U.S. Expansion (all other states). Existing saw its revenue rise by 4% to £38.4 million, while wagers recorded an increase of 23% from the same period of last year.
On the other hand, Expansion generated £14.5 million in H1 2019, which is quite an improvement from last year’s £900,000. At this moment, William Hill operates in 8 U.S. states, claiming a total of 27% of the country regulated sports betting market. The Expansion also recorded a sports betting handle of more than $500 million in the first half of 2019, around $250 million less than Nevada.