UK-listed bookmaker William Hill‘s profits fell 7% in the fourth quarter of 2014. Hills issued a trading update on Tuesday saying the final three months of the year had been laid low by unfavorable results in football and horseracing. The results also endured an unfortunate comparison with Q4 2013, which saw good revenue gains across all verticals.
Q4 saw sports betting revenue fall at both retail and online thanks to the aforementioned rash of favorites cashing. But while OTC handle fell 1%, online turnover rose 16%, with in-play rising 27% and pre-match up 8%. Mobile accounted for over 50% of online wagering and 38% of online gaming revenue, the latter figure an 86% improvement over the same period last year. Retail gaming machine revenue win per week rose nearly 6% to £974.
William Hill Australia thoroughly enjoyed Q4 thanks to favorable results during the important Spring Carnival period. A revised marketing strategy helped reduce cost per acquisition by 25% and the resulting “reshaping of the customer base” helped push net revenue up 15% despite a 13% decline in turnover. William Hill US continues to grow like a weed, with turnover up 20%, revenue up 18% and profit up 14%.
For 2014 as a whole, Hills expects revenue to come in 8% higher and operating profit up 11% to £375m, handily beating analysts’ forecasts of £357m. Hills CEO James Henderson called it the company’s “best ever full-year operating profit result” thanks to markets from outside the UK rising to 18% of total revenue. Australian revenue was up 41% and the US was up 30%, while poor old telephone wagering fell 28%.
Looking forward to 2015, Hills says the year got off to “a difficult start” with yet another streak of “highly unfavorable” results. Hills also warned that the European Union’s new policy of applying VAT to electronic services could cost the company an extra £5m in 2015. Regardless, optimism abounds thanks to Hills’ online operations being “very well positioned” to absorb the impact of the UK’s new 15% point-of-consumption tax.
AUSTRALIAN CONSOLIDATION COMING
Hills confirmed that it intends to consolidate its Australian brands under the William Hill Australia moniker – and this time they mean it. Hills originally claimed there would be no rebranding of its Aussie acquisitions – Sportingbet, Centrebet and Tom Waterhouse.com – then said it would scrap the other brands, then went back to keeping the original names, and now the brands are back on the chopping block. Seriously, this time it’s going to happen.
Sportingbet will be first to ride off into the sunset in time for February’s Autumn Racing Carnival and the start of the 2015 National Rugby League and Australian Football League seasons. The Centrebet brand will follow later in 2015 while Tom Waterhouse (the brand) will survive until early 2016. Hills plans to increase its down under marketing budget by a further £5m in order to make sure punters know whose URL to type into their browser.
In other Hills’ developments, last week saw company general counsel and head of business systems Thomas Murphy depart the company after a seven-year tenure. Murphy is leaving to take up a position with online travel technology firm Travelport. Hills has selected Michael Leadbeater as its new general counsel. Leadbeater is a six-year Hills veteran who previously held down the role of director of group legal services.
