William Hill announces a fall in full-year operating profits

by Luke Andrews, 1 March 2019

UK bookmaker William Hill has released its final trading results for 2018. The operator reported a record loss of £721 in 2018, something which it has attributed to exceptional costs and a difficult regulatory landscape in the UK.

Profits are down at Hills as the tough regulatory UK landscape has a big impact. © Pexels.

These “exceptional charge and adjustments” totalled £922.1m, and included an £882.8m non-cash impairment to retail after the triennial review decision, along with increased customer due diligence measures. That meant a loss of £721.9m before tax, while challenging UK high-street conditions and preparations for the fall of fixed-odds betting terminals (FOBTs) stakes also had a big effect.

Group net revenue rose 2% to £1,621.3m, although adjusted operating profit fell 3% to £266.8m, which was in line with expectations. The operator ended the year with a dividend of 12p per share.

The digital division performed strongly, both in the UK and internationally. Active accounts were up 25%, underlying net revenue 6%, and operating profit up 11%, although that was before accounting for an approximately £17m cost due to enhanced customer due diligence measures. The bookmaker also completed its acquisition of Mr Green for £242m in January 2019.

The US business is going from strength to strength. Momentum continues, with 42% growth in net revenue and 91% adjusted operating profit in the US, where Hills is currently active in six states. The bookmaker has secured access to a further 17 US states and currently holds a 34% market share in terms of revenue in the seven regulated US states.

In the UK, the operator continues preparations for the implementation of the new maximum £2 stake across B2 Gaming products in its retail outlets, commonly known as FOBTs. Additionally, it will cut down on its advertising in the UK, after voluntarily agreeing to the whistle-to-whistle advertising ban, due to be implemented in August.

Speaking about the firm’s performance, Philip Bowcock, chief executive officer of William Hill, said:

2018 was a busy and decisive year for us. Key regulatory decisions in the UK and US gave us much needed clarity to set a new five-year strategy and a goal to double profits by 2023. We have three businesses at different stages, with Online growing in the UK and diversifying internationally, Retail being remodelled in response to the new £2 stake limit, and rapid expansion in the US sports betting market. Underpinning this, we have taken a clear leadership stance around safer gambling with our Nobody Harmed ambition.– Philip Bowcock, William Hill chief executive officer .

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