Fewer punters have been visiting William Hill's betting shops recently and, when they have, they've been placing more winning bets. So the bookie says that, after an especially trying July, it doesn't expect to meet full-year expectations.
As well as the impact of the economic downturn on gamblers' propensity for a flutter, William Hill suffered during the first half from the cancellation of horse-racing fixtures, especially at the Cheltenham Festival, and a number of unfavourable sporting results. So, despite a strong performance from its gaming machines, the retail division's profits fell 10 per cent to £111.5m, which accounted for 78 per cent of the overall operating profit (before central overheads and exceptionals).
The online division's performance was more convincing. It has been strengthened by the Playtech acquisition and it reported a 58 per cent rise in first-half net revenues. New accounts grew 30 per cent in the period and operating profit rose 13 per cent to £31.4m. The division's sports book is being moved to Gibraltar, which will confer upon the operation with the same tax advantages as the majority of its rivals.
Following Hill's warning, KBC Peel Hunt expects a full-year pre-tax profit of £200m (£216.7m in 2008) and EPS of 20.5p (31.8p in 2008).
| WILLIAM HILL (WMH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 166p | MARKET VALUE: | £1,162m | |
| TOUCH: | 166-167p | 12-MONTH HIGH: | 243p | LOW: 106p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 4 | |
| NET ASSET VALUE: | 107p* | NET DEBT: | 84% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 489 | 111 | 16.1 | 7.75 |
| 2009 | 516 | 91.50 | 10.0 | 2.50 |
| % change | +6 | -18 | -38 | -68 |
Ex-div: 28 Oct Payment: 7 Dec *Includes intangible assets of £1.5bn, or 213p a share | ||||
