William Hill profits up on the back on WHO performance

TAGs: Playtech, Ralph Topping, Sporting Bet, William Hill, William Hill Online

william-hillBritish bookmaker William Hill reported strong online performance in a full year trading update as group net revenue rose 10 percent year-on-year. Operating profit for the company as a whole is expected to be £330million for 2012 – comparing favorably with the £274m posted at this point last year. Much of this is down to the firm’s William Hill Online (WHO) joint venture with Playtech that is bearing considerable fruit and contributed £104m to the group’s operating profit.

“It was a pleasing end to an important year for William Hill, a year in which we have made substantial strategic progress.  With both the acquisition of Sportingbet’s online business in Australia and the current Playtech call option process expected to conclude during early 2013, the Group continues to enhance its already strong platform for the continued development of the business,” said chief executive Ralph Topping.

Online was where Topping will have been most impressed with net revenue up by 27 percent as a 50 percent increase in sportsbook net revenue continued to show just how important sport is in WHO’s key markets. The rise in sportsbook net revenue was due to amounts staked increasing by 36 percent and a gross win margin of 7.9 percent – up on the 7 percent last year. Mobile sportsbook turnover increased by 260 percent compared to 2011 and as of Dec. it now accounts for a third of sportsbook turnover. Gaming net revenue also experienced an increase with net revenue up 14 percent as a result of “good performance” from Playtech Casino and Vegas Casino.

Playtech’s part of WHO was worth £41.2m for the full year and it could one of the last times we include them in a WHO full year roundup and there was news on the process surrounding the call option Hills has on the stake. The valuation process will be complete at some point in February when Hills gets a small window to decide on the acquisition. If the option isn’t taken there will be another chance in two years time.

The acquisition of Sportingbet is a more pressing matter and they expect to complete an acquisition by the end of the current quarter. Regulatory developments may have an adverse effect on the company over the coming year with Hills estimating that a closure of business in Germany would cost them c£6m of operating profit.

There was also news on William Hill US, the firm’s land-based sportsbook operating in Nevada, with performance impacted by weak sporting results that included the sportsbook stink-out that was the NFL in November.

The land-based part of William Hill’s business saw an increase in net revenue of 6 percent and this was even with over-the-counter amounts wagered falling 1 percent. Machine net revenue was up 5 percent with the much-derided FOBTs likely to have had much to do with it. Cue Daily Mail follow-up article.

As we mentioned earlier, the full year results will come out on Mar. 1, when the company hopes to have tied up a deal for Sportingbet and Playtech’s stake in WHO. Exciting times ahead for Captain Birds Eye and his shipmates.


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