Covid-19 closing sport and closing betting shops hastened William Hill’s (WMH) shift to more US and online punting. It will not reopen 119 betting shops in the UK, on top of the 713 closed last year, and has continued to focus on growth across the Atlantic.
The latest expansion is the Eldorado Resorts merger with the Caesar’s casino group, which will see William Hill adding 29 casino sports books to its portfolio. This takes its share of the US sports betting market to 29 per cent.
Debt remains a concern for the company because it asked for – and received – a covenant waiver from lenders for 2020. Borrowings were also helped by a £224m capital raise in June, bringing net debt down by over a third from the December year-end to £340m.
The gambling giant’s first-half adjusted operating profit plunged 85 per cent on last year to £12m, although its statutory result was far better thanks to a £202m tax refund from the government, which has been accounted for but not yet paid. This more than covered the £82m write-down on the value of the retail estate, after retail sales fell by almost two-thirds.
The online division was the only one to make an adjusted operating profit in the period, at £56m. This was on steady net revenue compared with last year at £367m, even with sport around the world suspended. Gaming income helped replace some of the lost online sports betting revenue. Non-UK revenue also rose and the company highlighted increased numbers of punters in Sweden and Denmark.
William Hill is combining the UK online and retail divisions this year, which it says will improve operational efficiency. This is just the latest corporate change: in the past 12 months, the company has brought in a new chief executive, financial and operating officers.
Peel Hunt forecasts full-year cash profits of £119m, a 56 per cent drop on last year, and no dividend until 2021.
| WILLIAM HILL (WMH) | ||||
| ORD PRICE: | 123p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 122.7-123p | 12-MONTH HIGH: | 207p | LOW: 29p |
| DIVIDEND YIELD: | na | PE RATIO: | 7 | |
| NET ASSET VALUE: | 65p* | NET DEBT: | 49% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 812 | -63.5 | -7.1 | 2.66 |
| 2020 | 554 | 141 | 13.2 | nil |
| % change | -32 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £1bn, or 99p a share | ||||
