William Hill warns of profit hit as more UK betting shops close
Growth in the US and online was not enough to avoid the impact of European retail shutdowns on Q3 profits.
UK.- British bookmaker William Hill has warned profits will continue to be hit by Covid-19 retail lockdowns as one in 10 of its UK betting shops close under new restrictions.
The firm, which is being bought by US casino giant Caesars for £2.9bn, has warned it expects around £2m to be wiped from underlying earnings if 100 betting shops remained closed for four weeks.
Around 10 per cent of its 1,414 betting shops are located in regions affected by the new lockdown measures mandated by the UK government.
Areas including Manchester and Liverpool have been placed in Tier 3 of the new three-tier system, meaning that non-essential businesses must close.
Around 8 per cent of William Hill’s UK betting shops are located in and around Liverpool.
The £2m estimate does not include any wage support that may be offered by the government. Around 900 staff work at William Hill’s affected betting shops.
Company revenues has been seeing a recovery before the latest measures. The numbers for Q3 showed an improvement on the first half in which revenues fell by 32 per cent year-on-year.
The 13 weeks to September 13 saw a considerable recovery although revenue was still down by 9 per cent year-on-year despite growth in the US and online.
Like-for-like betting shop sales recovered from a 49 per cent fall in H1 to a 2 per cent decline in Q3 as numbers approached pre-pandemic levels.
Online revenues increased by 4 per cent in the UK and 6 per cent overseas.
The group also decided to repay the £24.5m it received from the government furlough scheme due to the strong recovery.
It is expected that Caesars will sell off William Hill’s European retail estate when it completes its acquisition of the company.
Betfred and 888 Holdings have been mentioned as possible buyers.
William Hill said: “As governments vary their response to the Covid-19 pandemic, we will continue to mitigate the impact on our business through careful cost control and cash management.”
