Football favourites impact William Hill profits

Ralph Topping

Two weekends of winning favourites on the football has severely impacted William Hill’s Q1 figures, with the bookmaker announcing a 14% drop in operating profit for the period.

The two weekends of ‘unfavourable sporting results’ saw a 25% drop in operating profit for the firm’s retail business and a 6% drop in its online sportsbook. However the firm also marked continued ‘outstanding growth’ in online sportsbook turnover, which was up 30% with mobile up 78%.

Chief Executive Ralph Topping commented: “Our focus on combining a broad and deep product range with outstanding user experiences and scale investment in marketing continues to deliver tangible benefits across the Group: Sportsbook betting continues to grow rapidly, mobile gaming is much improved and we’re seeing positive trends in the key performance indicators for Australia and the US.

“Whilst the outstanding gross win margin in Q1 2013 sets a very high bar, meaning we are facing tough comparative figures, two substantial loss making weeks in this quarter (weeks 2 and 12) – with major wins for the football punters – impacted profit progression despite good growth in wagering in both Online and Retail and significantly improved gaming performance in both channels. As ever, it is important to look through short-term sporting results to the underlying strength of the business. Mobile, for instance, continues to go from strength to strength, increasing to 45% of Online Sportsbook amounts wagered and 27% of Online gaming net revenue in the period.

“We are also progressing successful diversification of the business both online and internationally, including delivering further good growth in Italy, Spain and the US. With most of the major components of the digital Australian platform now in place, we will be driving further improvements in that business’s performance as well.”

Topping suggested that online had absorbed the first set of poor football results, before being blindsided by the second: “Looking ahead to the rest of 2014, it is positive to note online had recouped much of its shortfall against internal expectations following week 2 before we were hit again in week 12. While there is no guarantee we can make up the difference, we continue to believe the increased customer confidence from such wins should be good for business, especially in this World Cup year.”

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