BUSINESS

William Hill revenue up, profit down in H1 despite cost savings

TAGs: William Hill

william-hill-revenue-up-profit-downUK bookmaker William Hill is celebrating modest growth across all four of its divisions in the first half of 2017, although profits failed to keep pace with revenue.

Figures released Wednesday show Hills’ overall revenue rising 3% year-on-year to £837m in the 26 weeks ending June 27, while adjusted operating profit dipped 1% to £129.5m and pre-tax profits slipped 7% to £93.5m.

While Hills CEO Philip Bowcock was keen to point out that the revenue gains came despite the previous comparable period containing the bulk of the Euro 2016 football tournament, the profit shortfall is all the more alarming given that the company says it remains on track to reap £40m in savings this year via “marketing efficiencies” and “substantial” cuts in external spending after renegotiating certain contracts.

Overall online revenue was up 5% to £290m. Sports betting revenue fell 1% to £139m despite an 11% bump in betting turnover and free bet offers rising more than one-third. Gaming revenue rode to the rescue, rising 10% to £151m. Mobile channels accounted for 81% of sports revenue (+11 points) and 61% of gaming (+10).

The ‘core’ markets of UK, Italy and Spain accounted for 86% of online sports bets. The latter two markets reported combined betting turnover up 9%, but poor margins pushed sports revenue 15% lower. Gaming revenue improved 8%, resulting in a overall revenue decline of 5% in these two markets.

In Australia, online betting turnover jumped 28% to £887m but margins fell nearly two points, limiting revenue growth to 5% (£58.5m). Double-digit rises in both sales and operating costs resulted in the Australian division’s operating profit falling 85% to a mere £600k.

In the United States, betting turnover was up 30% and revenue grew by one-third (17% in US dollars) to £24.6m. The first half of 2017 saw Hills US launch another sportsbook in Nevada as well as a new racebook in Iowa for Caesars Entertainment.

Hill’s mainstay UK retail operations reported overall revenue falling 2% to £460m as punter-friendly results pushed sports revenue down 7% to £210m despite a modest rise in turnover. Machine gaming revenue improved 3% to £250m. Increased staffing and content costs dragged retail operating profit down 14% to £81m.

Hills continues to push its UK omni-channel integration, including the first phase launch in H2 of a new ‘omni wallet’ that will allow customers greater flexibility in using their online funds in retail shops. The company also plans to have at least one proprietary self-service betting terminal in each of its retail shops by year’s end.

Bowcock said Hills will boost its marketing in the second half of the year. The promotional push will include deals with BT Sport, The Sun and The Mirror, but will also spread via social media platforms due to their audiences skewing younger. Bowcock said the launch of Hills’ #YourOdds social media-based personalized odds service had proved “extremely popular,” generating over 2m bets to date.

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