Hills profits hit by self-exclusions

Hills profits hit by self-exclusions

Wednesday, March 23, 2016
James Henderson said regulatory pressures and adverse sporting results had affected the company's online performance

William Hill shares were down by more than 13 per cent on Wednesday morning after it admitted to a “weaker than expected online performance,” partly caused by self-exclusions, during the first two months of 2016.

In a trading update released on Wednesday, the company said it expects group operating profit for 2016 to be in the range of £260m (€329.1m/$368.3m) to 280m, which is well down on analysts’ average forecast of £307m. The company’s operating profit in 2015 was £291.4m, down 22 per cent on 2014.

William Hill said there had been an “acceleration” in the number of time-outs and automatic self-exclusions over recent weeks, with this impacting the level of actives across the online business. The operator said this “evolving trend” could reduce its online section’s profits by £20-25m in 2016, with its 2015 earnings of £126.5m already 29 per cent down on the previous year. 

The company said that the second reason for its poor performance was due to adverse sporting results, most notably in European football and at the Cheltenham Festival, which were its “worst…results in recent history”. William Hill said gross win margins for online were 1.9 percentage points below expectations in the period at 6.2 per cent.

“Today's statement reflects the combined effect of our assessment of the impact of recent regulatory changes and unfavourable sporting results including the worst results at Cheltenham in our recent history,” said James Henderson, chief executive of William Hill, on Wednesday.

“We are also experiencing softer UK growth as a consequence of acquiring lower value customers. While the rest of the group is performing in line with our expectations, we continue to focus on improving online’s performance so that we can, once again, outperform the market.”

In more positive news, William Hill said it is in advanced discussions with a partner which would see it invest in sports betting platform OpenBet.

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