William Hill accelerates transformation after results
The bookmaker will close 119 betting shops in the UK.
UK.- Bookmaker William Hill has announced it is accelerating its corporate transformation as it reports a 31.7 per cent year-on-year drop in revenue for the first half of the year.
It will close 119 betting shops after its retail estate generated operating losses of £129million during 13 weeks of lockdown, with the bookmaker saying it did not expect longer term retail footfall in the UK to return to pre-Covid levels.
The decision speeds up the move of a greater proportion of business online and from international markets. Last month, William Hill announced it would merge its online and retail divisions.
Revenue for the six months ending June 30 fell to £554.4million owing to lockdown measures and sports disruption caused by the pandemic.
However, in comparison with losses of £63.5million in the first half of 2019, this year the bookmaker was able to report a net profit for H1 thanks to its £230.7million value added tax (VAT) refund from the government. The one-off payment allowed the company to post net profit of £115.6million.
The majority of revenue in the first half came from its online division, which saw revenue grow by 1 per cent year-on-year to £369.3million. A 13.1 per cent drop in the contribution from sports betting (£132.4million) was offset by growth of 10.2 per cent in gaming revenue to £236.9million.
The FTSE250 company said the implementation of its corporate transformation programme last year had helped it navigate the storm brought by the pandemic.
This includes the bookmaker’s objective to diversify internationally. The proportion of revenue generated outside the UK grew to 39 per cent, up from 35 per cent in the same period last year.
Online international net revenue increased by 10 per cent to £143.8million, aided by “Sweden returning to growth following the regulatory developments of the prior year and Denmark net revenue nearly doubling.”
Retail saw a 49 per cent fall in like-for-like revenue to £147million, down from £391million, due to the continued impact of the £2 stake limit on FOBTs and the reduction in retail units in 2019.
The company said the permanent closure of 119 betting shops would mean less than 20 job losses, with the majority of employees being redeployed. The company has also decided to repay the funds it received through the UK government furlough scheme.
CEO Ulrik Bengtsson said: “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.”
