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William Hill responds to remote gaming duty increase

The bookie has set itself three goals to deal with recent regulatory changes
November 7, 2018

Management at William Hill (WMH) has set itself three main tasks: to grow the digital business, increase scale in the US and remodel UK retail. Judging by the bookie’s trading update, this seems prudent. Online net revenue increased by 4 per cent during the 43 weeks to 23 October, while retail net sales fell 4 per cent, and in the US net revenue improved by 36 per cent in local currency. The group is now trading in four states, with access secured to a further 17 as part of a partnership with Eldorado Resorts. It’s further diversified digitally and internationally with the recent acquisition of Mr Green, which is forecast to contribute around £25m in cash profits in 2019. Synergies of around £6m are expected by 2021.

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But regulatory and tax changes will act as a headwind for the online business. Increased customer due diligence and the increase in remote gaming duty from 15 per cent to 21 per cent is expected to wipe £20m off profits in 2018 and a further £25m in 2019, after which the online business is expected to return to “strong profit growth”. This hasn’t stopped the company from setting targets of £1bn in online sales, doubled digital profit and $300m US cash profits, all by 2023.