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William Hill signs US deal

The bookie announced a sports betting deal with casinos in the US alongside its half-year results
August 6, 2018

Since a ban on sports betting was overturned in June, the stakes in US gambling got higher. Alongside half-year results, William Hill (WMH) announced a new sports betting agreement with 11 casinos in Mississippi and another casino partner in West Virginia, to provide technology and risk management services. Chief executive Philip Bowcock said the company is also in advanced negotiations with casino businesses across a further 14 states. But while the US may be the land of opportunity, the same can’t be said for William's Hill's retail business in the UK: first-half net revenues fell 3 per cent during the first half.

IC TIP: Hold at 270.2p

Even worse, a £916m exceptional charge wiped out half-year statutory profits, leading to a significant pre-tax loss. Most of this is related to a non-cash impairment on the value of the domestic retail business after the British government cut maximum stakes on fixed odds betting terminals (FOBTs) from £100 to £2. Mr Bowcock said he plans to overhaul the retail division once there’s a clearer idea of the FOBT impact, including whether customers take up another form of gambling. The online business continues to do well, meanwhile, with net revenue up 11 per cent. 

Analysts at Peel Hunt expect pre-tax profit of £244m during 2018, giving EPS of 24.3p, compared with £255m and 27.5p in 2017.

WILLIAM HILL (WMH)   
ORD PRICE:270.2pMARKET VALUE:£2.33bn
TOUCH:270.1-270.4p12-MONTH HIGH:345pLOW: 239p
DIVIDEND YIELD:4.9%PE RATIO:na
NET ASSET VALUE:28p*NET DEBT:114%
Half-year to 27 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20177791099.44.26
2018803-802-93.54.26
% change+3---
Ex-div:25 Oct   
Payment:28 Nov   
*Includes intangible assets of £665m, or 77p a share