UK betting operator William Hill reported record operating profit in 2014 thanks to continued strengths in its digital division.
Revenue rose 8% last year to £1.6b while operating profit rose 11% to £372m. However, exceptional items dragged net profit after tax down 9% to £206.3m. Results were buoyed by the 2014 FIFA World Cup, which generated nearly £227m in wagers, of which Hills kept £40.5m. Compared to the 2010 footie fest, retail wagering declined £4m while online grew by £108m.
William Hill Online revenue rose 18% to £527.4m, representing 32% of the overall revenue pie. Digital sportsbook revenue rose 19% to £253m thanks largely to mobile wagering, which rose 48%, representing 56% of digital sports revenue. Mobile stakes grew 55% while desktop stakes grew by a comparatively paltry 11%. Mobile win margin (9%) also outpaced desktop (6.2%). Pre-match handle rose 23% to £2.1b while in-play handle rose 36% to £1.6b.
Digital gaming revenue rose 17% to £274m, with casino up 23% to £235m. Bingo fell 2% to £23.7m while the poker vertical fell 18% to £14.9m. As with sports, mobile gaming was the star performer, with revenue up 117%, representing 32% of total gaming, while desktop gaming revenue fell 3%.
Revenue from outside the UK accounted for 18% of the total, up from 15% in 2013 and twice 2012’s 9%. In Italy, revenue rose 39% thanks to an increased range of sports betting products on offer and the launch of mobile gaming and sports products. In Spain, revenue was up 64%. Hills had a 9% share of the 2014 Italian sports betting market and a 19% share in Spain. Combined, the two markets generated a net loss of £6m but Hills hopes to break even in both markets in 2015.
William Hill Australia generated 8% of group revenue, with stakes up 18%, revenue up 41% to £122m and profit up 106% to £24.7m. William Hill US betting handle rose 21% and revenue rose 31% to £29.7m. Hills’ telephone wagering business saw handle fall 16% and revenue was down 28% to £11.8m, resulting in a net loss of £800k for the division.
Hills retail operations continued to account for the bulk (57%) of revenue. OTC wagering handle grew slightly but OTC revenue fell 5% to £450m thanks to punter-friendly results and a bad comparison with 2013’s high win rate. Gaming machine revenue rose 6% to £462m. Hills had 2,362 shops at the end of 2014.
The first eight weeks of 2015 have started on a positive note, outside of a single week of punter-friendly results that cost the company a hefty £13m. The company said the popularity of accumulator bets means that such volatility is now “a normal part of the Group’s trading” and thus it remains confident it will hit its 2015 targets.
Over half of Hills’ online customers also patronize betting shops, while one-third of retail customers also use Hills’ digital services. To take advantage of this cross-pollination, Hills plans to emphasize a “one customer” push to ensure a more consistent product line across all channels.
