William Hill eyes Australian and US growth

William Hill eyes Australian and US growth

Wednesday, August 2, 2017 Posted by Andy McCarron
International expansion a key priority for bookmaking group

Bookmaker William Hill has pledged to drive international growth as one of its three strategic priorities.

Presenting its financial results for the first half of 2017, which saw adjusted operating profit flat with a 1% decline to £129.5m, CEO Philip Bowcock saw plenty to be positive about: "The first half of 2017 has seen good progress against our three strategic priorities and wagering growth across all four divisions. Our product improvements combined with improved marketing have seen both existing customers respond positively and the number of new customers start growing again during the period. As a result we are seeing good momentum building in Online's performance. In Retail we made market share gains, with growth in both sports betting, despite the lack of a major international football tournament, and gaming revenues.

“Internationally, our US business continues to perform well and in Australia, with the upcoming Spring Carnival key to the full-year results, we are competing hard and diversifying our product range.”

For H1 2017 the company has delivered improved wagering growth in Australia, up 28% in local currency. The company revealed that it is focusing on the core racing product to help offset reduced volumes from in-play following changes to Northern Territory licensing conditions.

However it did concede that the overall profit performance was disappointing as weaker gross win margins meant the wagering growth did not translate into the expected revenue growth. Costs also increased as the firm invested in additional and exclusive streaming content to support the racing product.

In fact operating costs were 10% higher, primarily due to increased investment in content, notably exclusive streaming rights to New South Wales Racing vision to support a focus on the horseracing product. The marketing spend and volume of free bets were weighted to the first half to support its Australian Open sponsorship; these will be lower in the second half, supporting an improved profit performance. Given the weaker gross win margin and additional costs, adjusted operating profit decreased by 85%.

William Hill added: “We expect performance to improve, benefiting from the additional content and product innovations we launched in the first half. These include Price Pump, which gives customers daily personalised enhanced odds, and William Hill Rewards, redeemable as bonus bets and Velocity frequent flyer points. In the second half, we are also launching new products that gamify the betting experience and increase the frequency of betting opportunities.”

In comparison William Hill US again delivered double-digit top-line growth, up 13% in local currency, driven by mobile and new locations. The firm opened a new sportsbook in Nevada and, for Caesars Entertainment, a race book in Iowa. This helped its market share in Nevada increase to 26% of gross win and the firm now operates 56% of the state's casino-based sportsbooks, all branded William Hill.

The company said: “We continue to be actively involved in efforts to change regulations restricting sports betting, including working with the American Gaming Association, who have made overturning the federal ban on sports betting a significant focus.”

Italy and Spain continue to perform well with amounts wagered up 9% and gaming net revenue up 8% in local currency terms.

Totally Gaming says: While it says international growth is one of its three key objectives, the company has also conceded that the UK is the firm’s ‘near-term priority’. However the firm is uniquely position in the US if sportsbetting does actually get legalised there, compared to the other hyper competitive UK and Australian markets, and the US division appears to be comfortably turning profits. William Hill US may only provide 3% of group revenue at the moment, but the potential is there for growth.

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