A year-on from implementing its corporate transformation programme, William Hill Plc has praised the execution of its new strategy which has helped the company navigate Covid complexities and further industry headwinds.
Publishing its half-year results for the six months ended 30 June 2020, the COVID-19 disruptions to live sport were a key factor in the 32% decline in net revenues, which fell from £811.7 million to £554.4 million.
The bookmaker noted that this was ‘partially offset by favourable sports results and a resilient gaming performance’, with online gaming increasing by 1% from £367.3 million to £369.3 million.
Online activity, which accounts for 67% of William Hill’s operations, appeared to withstand the effects of the pandemic. While a decline in staking levels as a result of live sport impacted UK net revenues – which dropped by 8% from £244.9 million in 2019 to £225.5 million in 2020 – international net revenues grew.
Stating that this was ‘in line with the ambition to diversify internationally’, William Hill reported that 39% of revenue was generated outside the UK compared to 35% during the same period last year.
Online international net revenue increased by 10%, up from £122.4 million in 2019 to £143.8 million. William Hill attributed this to ‘increasing traction from product developments launched late in 2019, a shift from retail to online and some substitution from sports betting’.
This was compounded by ‘strong progress with Sweden returning to growth following the regulatory developments of the prior year and Denmark net revenue nearly doubling’.
Pre-tax profit for the six month period amounted to £141.1 million, compared to losses of £63.5m in the comparative period last year, which was largely due to a one-off £201.6 million value-added tax refund.
The FTSE250 betting group continues to ‘remodel its retail estate’, which recorded a 49% drop in like-for-like revenues to £147 million, down from £391 million in H1 2019, citing a number of continued market adjustments to the FOBTs £2 stake reduction and the company significantly reducing its shop units in 2019.
Forced by Covid to place its retail estate in hibernation for 13-weeks’, William Hill retail segment recorded operating losses of £129 million. The bookmaker states that it does not anticipate ‘longer term retail footfall’ to return to pre-Covid levels, with 119 betting shops remaining permanently closed.
This July, William Hill confirmed the merger of online and retail divisions as ‘the next logical step to create value and drive growth’ as the company plans to deliver a ‘smart retail offering with the best of retail and the power of online’.
Ulrik Bengtsson, Chief Executive Officer, commented: “I am delighted with William Hill’s performance in these extraordinary times. Our team has been remarkable, supporting each other and our customers throughout the pandemic, and I would like to thank them for their continuing efforts.
“We are pleased with the moves we have taken to further strengthen customer protection, sending over 1.2 million player safety messages, and we are fully supportive of an evidence-based approach to the review of the Gambling Act, as suggested by the recent House of Lords report.
“We have clear proof that our strategy of focusing on Customer, Team and Execution is working. Our trading was strong before COVID-19, we controlled costs effectively during lockdown and we have recovered well post-lockdown with good performances in our online businesses throughout the first half.
“The furlough scheme provided welcome and timely support and meant we could protect the jobs of our 7,000 UK retail colleagues. Therefore, given the strength of our recovery post-lockdown, we have decided to repay the furlough funds.
“We have continued to develop both our technology platform and our product offerings, with more significant enhancements to come in the second half. The balance sheet has been strengthened by the prompt actions we took to keep cash in the business, the successful placing, and the recognition of the VAT refund.
“As a result, we have the financial strength to confidently pursue our growth agenda, taking advantage of our market leading position in sports betting in the US, and the terrific opportunity that Eldorado’s merger with Caesars brings.”