UK-listed bookmakers William Hill hailed a “positive start” to the year despite a flat performance at its mainstay UK retail operations.
Hills released a trading update on Tuesday covering the first 17 weeks of 2017, during which group revenue rose 9% from the same period last year. Most of the group’s divisions reported strong double-digit revenue gains while the core retail business managed only a 1% year-on-year rise.
Total online revenue was up 16%, with gaming revenue up 8% and sportsbook revenue surging 26%. Sportsbook handle improved 9% and margins rose 1.2 points to 7.5%, primarily due to punters backing the wrong horses.
The sportsbook benefited from a new Android app and a 24% rise in new customer signups during the Cheltenham and Aintree racing meets. The Vegas gaming product got a new front-end in March and single-wallet functionality in February, and Hills has hired 75 additional developers to accelerate the pace of product development.
Hill’s retail operations reported over the counter wagering up 2% thanks to a packed racing calendar, but margins dipped nearly a full point to 18%. Machine gaming revenue was up 4%. Hills launched its new Bet Tracker mobile web app during the period, allowing retail punters to access previously online-only services such as Cash In, and Hills claims early adoption rates are “encouraging.”
While racing loomed large in the update’s ‘win’ column, Hills warned that last month’s formal introduction of the UK’s new uniform 10% levy on both online and land-based race betting revenue will likely cost the company an additional £5m through the rest of the year.
William Hill Australia reported revenue up 41% (19% in local currency) despite lower margins. Betting handle was up 53% (local currency; 29%) even though the company was forced to curtail online in-play wagering after the government changed the rules last fall.
William Hill US performed strongly but also suffered from lower margins, which meant a 29% rise in betting handle (local currency: 12%) resulted in net revenue rising a more modest 19% (local currency: 3%).
The results hopefully signal a turnaround from Hills’ “challenging” 2016 performance and CEO Philip Bowcock reported that the company’s efforts to build a global technology platform were “progressing well.” The company expects to realize £40m in annual savings from its transformation program by the end of 2017, most of which will be reinvested in product, marketing and omni-channel expansion.