The odds of these William Hill (WMH) results prompting a share price rise were probably as long as those of Leicester City winning the league at the start of the season. But, even though adjusted operating profit fell by more than a fifth, all hell didn't break loose. The damage, as expected, came from additional point-of-consumption taxes being levied on the gambling industry by HM Revenue & Customs. Without these extra tariffs, profit would have risen 2 per cent to £291m.
The company also announced a £200m share buyback to be completed in the next 12 months, and has altered its dividend policy to increase the payout ratio to roughly 50 per cent of adjusted earnings, from 40 per cent previously.
But there's more to these numbers than giveaways. Operating profit in its online business, which delivers a third of revenue, would have risen 9 per cent but for an additional £66.4m tax bill. The retail business didn't perform quite so well, though. Its adjusted operating profit fell 1 per cent, even with additional taxes excluded, due to fewer shops and less over-the-counter betting.
Analysts at Peel Hunt expect pre-tax profit of £273m in the 2016 financial year, leading to EPS of 24.9p, up from £252m and 24.7p in 2015.
| WILLIAM HILL (WMH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 391p | MARKET VALUE: | £3.46bn | |
| TOUCH: | 390.7-391p | 12-MONTH HIGH: | 432p | LOW: 312p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 137p* | NET DEBT: | 40% | |
| Year to 29 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2015 | 1.59 | 185 | 21.6 | 12.5 |
| % change | -1 | -21 | -8 | +2 |
Ex-div: 28 Apr Payment: 3 Jun *Includes intangible assets of £1.73bn, or 196p a share | ||||
