Although William Hill (WMH) failed to take over online rival 888 (888) at the start of the year, management says it is committed to looking for "further M&A opportunities". This is the latest in a string of strategic changes at the high-street bookie, which is trying to future-proof its business against regulatory change and rising taxes. In 2015, profits will come under pressure from the new point of consumption tax, an increase in machine games duty (MGD), and higher fees in Australia.
Last year, online net revenue climbed 18 per cent to £527m and mobile revenues more than doubled. This contributed to a 20 per cent increase in online operating profits to £178m and an 11 per cent improvement in group operating profits to £372m. The retail business held up decently. Revenues were flat at £911m and operating profits fell 2 per cent to £193m, but this was slightly better than forecast. The group also spent time reshaping its Australian business, bringing the Sportingbet acquisition over to the William Hill brand.
Brokerage Numis expects adjusted pre-tax profits of £259m this year, giving EPS of 23.8p, down from £317m and 29.9p, respectively.
| WILLIAM HILL (WMH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 379p | MARKET VALUE: | £3.32bn | |
| TOUCH: | 378-379p | 12-MONTH HIGH: | 398p | LOW: 315p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 132p* | NET DEBT: | 52% | |
| Year to 30 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.07 | 193 | 18.6 | 8.3 |
| 2011 | 1.14 | 187 | 16.5 | 9.6 |
| 2012 | 1.28 | 278 | 25.0 | 10.4 |
| 2013** | 1.49 | 257 | 25.2 | 11.6 |
| 2014 | 1.61 | 234 | 23.6 | 12.2 |
| % change | +8 | -9 | -6 | +5 |
Ex-div: 30 Apr Payment: 5 Jun *Includes intangible assets of £1.82bn, or 207p a share **Period to 31 Dec | ||||
