Downhill Recovery: William Hill profits down but ahead of predicted results
UK-based online casino, sports betting, and betting shop giant William Hill has reported a steep decline in profit across 2019. Pre-tax profits were down to £96.5 million—52% on 2018’s figure—and overall group revenues fell 2% to £1.58 billion ($1.22 billion).
The year saw the company close 700 stores in the UK. The company claims this was a result of legislation the limiting maximum £2 bet on Fixed Odds Betting Terminals that previous Prime Minister Theresa May’s administration brought in.
Previously, the limit had been £100 per stake, giving a total cut of 98%. The new law didn’t just hit William Hill, as UK bookmakers (many of whom also run online casinos) collectively closed nearly 3,000 physical or ‘high street’ stores across the year.
The company is also concerned about a potential £20 million hit this year, as Boris Johnson’s government will ban credit card deposits from UK players at online casinos starting April 2020.
Debts might also be of some concern as they rose significantly in 2019, up to £535 million. This was impacted by the acquisition of European online casino Mr. Green and its expansion into the growing legal markets in the US.
Ahead of the Curve?
However, it’s not all doom and gloom for the well-known UK bookmaker. Adjusted for the cost of acquisitions, the company would have made £145 million—ahead of most predictions of £130 million.
Actual profits were also ahead of the predictions, which were set at about £50 million.
The acquisition of the consistently profitable Mr. Green helped offset some of the losses from store closures and increased regulation.
The £242 million purchase reportedly helped online gaming revenues across the William Hill portfolio gain 36% on the previous year.
Similarly, the group’s US expansion may also pay off this year, with many newly legal markets showing record revenues and profits. The firm’s US division saw a 38% increase in revenues year-on-year from 2018.
The move marked a drive to diversify William Hill’s business outside of the UK, where revenues fell by 13% with Brexit and the possibility of regulatory tightening on the horizon.
In 2018, only 15% of William Hill’s revenue was made outside of the UK, but this rose to 25% in 2019.
Chief Executive Officer Ulrik Bengtsson was keen to point out that “2019 was a year of transition for the company” and that “performance was ahead of expectations against a challenging regulatory backdrop.”
Mr. Bengtsson is a fairly new appointment to the role, having joined William Hill from Swedish firm Bettson in 2018. He took over the top job at the company in September 2019.
Last year, the group also parted ways with its chief financial officer, Ruth Prior, in a move that asset managers reportedly called “disappointing.”
Whatever the future for William Hill this financial year, we’ll keep you updated on this, along with many other stories.