SBC News Tax costs & unfavourable January results impact William Hill Q1 2015 performance

Tax costs & unfavourable January results impact William Hill Q1 2015 performance

williamhill-jameshenderson
James Henderson – William Hill

Reporting on its opening 2015 quarter (period ending 1 April), William Hill recorded a 19% decline in operating profits of £16 million on 2014 performance, as the operator was impacted by increased tax charges and a set of unfriendly football results.

In its trading update William Hill governance noted that the new POC tax charge combined with the additional tax duty on its retail machine games, had resulted in the company incurring £20 million in additional operational costs.

Further performance impacts saw the operator pay-out £14 million in its highest loss-making week ever in January. Alike its competitor Ladbrokes plc, the company had been hit by adverse football results which saw a high number of favourites win their matches.

William Hill governance who had expected increased tax costs during the period, highlighted positive metric performances in the company’s digital division. Although impacted by unfriendly football results, its online sports betting division saw a 16% increase in player wagering and with an improved net revenue of 11%.

iGaming revenues for the operator grew 8%, powered by improved online casino and bingo performance. William Hill further highlighted its continued strong growth in mobile gaming, up 48%, to 37% of gaming net revenue.

The operator’s retail division saw a tough opening to 2015, reporting retail betting wagering down 2% with a further 2% dip in retail betting gross win margins. Machine game revenue grew 4% during the period, but earnings were offset by new tax duties.

Retail operating costs were 4% lower, reflecting the staffing model changes applied to approximately two-thirds of the estate from April 2014 and benefiting from the shop closures. The average number of shops was 2,361 (Q1 2014: 2,431), with one shop opened and two closed in the period.

James Henderson, Chief Executive Officer of William Hill, commented on Q1 2015 performance:

“After a weak January, we saw improved wagering trends over the remainder of the quarter. Online wagering grew 20% in February and March, and 29% for the Cheltenham festival. Gross win margins were below our expected trading range for what is typically a stronger quarter, impacted by – amongst other things – our largest ever loss-making week in Week 3.

“As expected, Group operating profit was impacted by a £20m increase in gambling duties following the introduction of POCT in December 2014 and the increase in the MGD rate in March 2015. However, we are well positioned to benefit as the UK online market evolves following the introduction of POCT, with our ongoing technology investments expected to benefit both product and customer experience and with a substantial marketing commitment.

“Looking forward, as the end of the football season draws closer, we have not as yet made up the shortfall arising from the £14m loss in Week 3 given the relatively weak first quarter sports betting margin. Outwith sporting results, we are making good progress on our key projects for the year, including in-house development of our responsive design front-end through Project Trafalgar, an enhanced bonus engine to further increase the competitiveness of our proprietary Vegas casino platform and the completion of our Eclipse machine roll-out in Retail.”

William Hill Q1 Performance Overview

q1wills

 

Check Also

Per Widerström, 888 CEO

888 narrows 2023 losses as Widerström Evokes new vision 

888 Holdings declares that it has established the foundations for future sustainable growth under new …

William Hill and PA Betting Services renew racing data deal

William Hill welcomed back as Lincoln Handicap sponsor

William Hill has been announced as the sponsor of the Lincoln Handicap at Doncaster Racecourse. …

SBC News William Hill introduces four new horseracing ambassadors

William Hill introduces four new horseracing ambassadors

William Hill has added four new horse racing representatives to its ambassador portfolio. The British …