William Hill (WMH) has finally confirmed that it will pay £424m for Playtech's 29 per cent share of William Hill Online. The group is raising £375m towards the cost, through a two-for-nine rights issue at 245p, with the remainder coming from a £50m bridging loan. The company will pay 9.3 times cash profits for Playtech's share, and these full-year results reminded investors of just how important the online business is to the bookmaker's future.
Quite simply, growth at William Hill's online division was exceptional. Mobile phone betting and in-play markets are fuelling that, but Hill is winning in the battle to attract individual punters. For example, the number of active online users grew 27 per cent to 1.8m, driving a 36 per cent rise in divisional operating profit to £145m, when the better-than-average win margin of 7.9 per cent is included. The higher win margin had a more significant effect at the retail division - it helped offset a 3 per cent fall in bet numbers and operating profit here rose 7 per cent to £211m. Machine gaming, however, struggled and Hill's weekly gross win per machine of £911 was well behind Ladbrokes' £946 equivalent.
Broker Peel Hunt expects adjusted full-year pre-tax profit for 2013 of £271m, giving EPS of 26.6p (from £293m and 28.9p in 2012).
WILLIAM HILL (WMH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 434.9p | MARKET VALUE: | £3.07bn | |
| TOUCH: | 434.8-435p | 12-MONTH HIGH: | 437p | LOW: 221p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 147p* | NET DEBT: | 33% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 0.96 | 293 | 47.5 | 5.50 |
| 2009 | 0.99 | 121 | 9.50 | 7.50 |
| 2010 | 1.07 | 193 | 18.6 | 8.30 |
| 2011 | 1.14 | 187 | 16.5 | 9.60 |
| 2012 | 1.28 | 278 | 27.0 | 11.2 |
| % change | +12 | +49 | +64 | +17 |
Ex-div: 13 Mar Payment: 7 Jun *Includes intangible assets of £1.43bn, or 203p a share | ||||
