William Hill’s profit to fall 15% on retail woes, US expansion costs


william-hill-2018-profit-declineUK-listed bookmaker William Hill expects its 2018 profits to come in 15% below the year before, despite its expanding US market opportunities.

On Monday, Hills issued an unaudited trading statement covering the 53 weeks ending January 1 that forecast the company’s adjusted operating profit from continuing operations to come in around £234m, a 15% decline from 2017’s annual result. The company will release its final audited report on March 1.

Hills noted that its profit projection was in line with its previous guidance, and claimed underlying operating profit would have risen by around 4% absent (a) the need to enhance its online customer due diligence measures to avoid further spankings by UK regulators and (b) the rise in costs driven by its US market expansion efforts.

Speaking of, the company celebrated “excellent growth” in its William Hill US division last year, which saw the company expand its presence outside its Nevada base to an additional seven states. Hills said its US operations “broadly broke even” despite those additional costs, which sounds suspiciously like a case of damning with faint praise.

Hills said its online operations “delivered a good underlying performance,” despite having recently announced a 3% fall in online sports betting handle and reviewing the future of up to 100 digital jobs. The company’s significant UK retail betting operations were “challenged by wider high street conditions” that will only get worse as the new year progresses.

All UK-centric operators are scheduled to take two major hits come April 1 thanks to the simultaneous slashing of fixed-odds betting terminal stakes from their current £100 maximum to just £2 and the rise in the online casino tax rate from its current 15% to 21%.

Hills CEO Philip Bowcock called 2018 “a pivotal year” for both his company and the industry at large. With “greater clarity” on the regulatory situation, Bowcock said Hills would “remodel our retail offer while building a digitally-led international business.”

Part of that new digitally-led business will involve the acquisition of Malta-licensed operator MRG (formerly Mr Green), which Hills announced last October. Bowcock said Monday that the deal was “nearing completion” and would enable the company to make “further progress” in its digital goals in 2019.