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William Hill hit by online squeeze

The gambling company still hasn't appointed a permanent chief executive despite a terrible year's trading
February 24, 2017

Just because William Hill (WMH) warned investors about poor results back in January doesn't mean the market will be quick to forgive such a difficult year. A 10 per cent drop in adjusted operating profit was the result of significantly lower profit from the online business and a slightly less dramatic 5 per cent squeeze in retail profit. Matters weren't helped by 'customer-friendly' racing results in the final quarter.

IC TIP: Hold at 265.8p

Chief executive Philip Bowcock has identified a number of different strategic priorities for 2017, which includes growing UK market share and the group's international footprint simultaneously, although he has yet to be appointed to the top role on a permanent basis.

There's better news from current trading: UK sportsbook wagering is up 10 per cent during the seven weeks ended 14 February 2017, while UK gaming net revenue rose 8 per cent. As far as sporting results go, the group says these have been favourable in the UK so far, but less so in the US and Australia.

Analysts at Numis expect adjusted operating profit of £282m for the year ending December 2017, and EPS of 26.1p, compared with £262m and 22.3p in 2016.

 

WILLIAM HILL (WMH)

ORD PRICE:265.8pMARKET VALUE:£2.28bn
TOUCH:265.4-265.8p12-MONTH HIGH:416pLOW: 236p
DIVIDEND YIELD:4.7%PE RATIO:14
NET ASSET VALUE:143p*NET DEBT:50%

Year to 27 DecTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20121.2827825.010.4
20131.4925725.211.6
20141.6123423.612.2
20151.5918521.612.5
20161.6018118.912.5
% change+1-2-13-

Ex-div: 27 Apr

Payment: 8 Jun

*Includes intangible assets of £1.81bn, or 210p a share