William Hill presents its global future prospects amid UK woes

Publishing its latest trading update (17-43 week period ending 28 October), FTSE250 William Hill Plc details ‘rapid US progress’, however, the betting group cannot escape its UK woes.

Despite progress on its digital agenda, William Hill’s 2018 trading has been impacted by negative sporting results and further group-wide adjustments undertaken to counter a tougher UK regulatory environment.

Continuing its digital transformation programme, William Hill reports that year-to-date online net revenues have increased by 4%. Nevertheless, the bookmaker cannot reverse its well documented UK retail declines of  YTD – 4%.

“We have benefited from the later stages of the World Cup but otherwise football and racing margins have been weaker than expected, including three loss-making weeks on horseracing during the summer and customer-friendly football results during the international break in October,” said William Hill Group Chief Executive Phillip Bowcock.

“Retail continues to be challenged by the wider high street conditions and we have seen gaming as well as sportsbook revenues decline in the period.”

At present, William Hill governance anticipates a full-year operating profit to be delivered at £225–245 million range (below 2018 expectations), assuming normalised gross win margins are maintained in the remaining weeks of the year.

Despite its UK woes, William Hill highlights significant future prospects, emphasising its ‘US agenda’, in which the firm’s existing Nevada operations have recorded a 36% increase in net revenues.

During the opening months of a liberalised US betting market post-PASPA, William Hill records a betting volume of around $200 million wagered, with the company now taking bets Delaware, New Jersey, Mississippi and West Virginia.

“Our goal is to be in every state,” Bowcock added. “Supported by the extensive experience of our US Existing business in Nevada, we’re building a network of market access agreements, including our strategic partnership with Eldorado, expanding our relationship with Golden Entertainment and exclusively partnering with IGT for sports lottery opportunities.

“We’ve opened 18 new sports books and launched our initial mobile offering in New Jersey. We’re also progressing a new technology solution to go live in 2019, incorporating the newest elements of the Group’s existing platform and a bespoke Player Account Management system from NeoGames, whose solution is more feature-rich than any sports betting platform currently live in the US.”

The trading update, sees William Hill leadership detail further insights on its proposed £242 million acquisition of Stockholm-listed MRG Group, as William Hill governance moves to strengthen the firm’s European digital profile by acquiring a ‘proven multi-market asset’.

“We are continuing to experience a period of significant change for our industry and have already made important changes over the last two years to transform our digital business, broaden the management team and enhance our financial flexibility ahead of key regulatory changes,” said Bowcock.

“The proposed acquisition of Mr Green will accelerate the diversification of William Hill into a more digital and international business. At today’s Capital Markets Day, we will lay out our medium- and long-term strategy to respond to the latest challenges and opportunities and to successfully build William Hill into a digitally-led, diversified and sustainable gambling business.”

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