William Hill hit by online and retail struggles
William Hill has reported a 2% increase in revenue for the first 17 weeks of the year, despite suffering a like-for-like drop in revenue for its online arm and a decline in its retail business.
The bookmaker has opted not to disclose financial figures for the period, but it has confirmed that group revenue for the 17 weeks to April 20, 2019, was up by 2% on last year.
Online net revenue increased by 8% in the period, reflecting the contribution by MRG since William Hill completed its SEK2.82bn (£227.4m/€261.8m/$293.5m) acquisition of the online gaming operator earlier this year.
However, on a pro forma basis, excluding the impact of MRG, online net revenue was down 6% in the period, with gaming flat and sportsbook slipping 12%. The bookmaker said that this was due to strong prior year comparatives and also the continued impact of enhanced customer due diligence measures, which have hit results since mid-2018.
It was also a grim period for the retail business, with William Hill reporting a 7% decline in net revenue for the division, as well a 1% drop in the total number of shops across its network.
Retail sportsbook revenue was up by 2%, helped by a 5% rise in wagers, but the new stake restrictions on fixed-odds betting terminals in the UK meant retail gaming revenue slipped 15% year-on-year.
In relation to the new UK regulations, William Hill said that while it is likely to be several months before any meaningful conclusions can be drawn, at this early stage, trends are consistent with previous guidance.
However, there was some reason to be cheerful, as William Hill reported major year-on-year gains in its US business, due to the bookmaker launching in a number states that have moved to regulate sports betting in the wake of last year’s Supreme Court PASPA ruling.
William Hill, which is currently active across seven states, said US revenue hiked 48% during the 17-week period, with sportsbook amounts wagered up by 65% across the US market. The existing business in the US also performed well, with a 27% rise in wagers helping push net revenue up 6%.
The bookmaker said it anticipates further growth in the US as more states move to regulate sports betting, citing the recent legalisation of such activities in both Iowa and Indiana. William Hill has access to both states through its partnership with Eldorado Resorts.
CEO Philip Bowcock was on the whole pleased with the results, picking out year-on-year growth in the US as a major highlight for the period.
“Just one year on since PASPA was overturned William Hill has doubled the sports wagering it handles in the US, seen record performances at the Super Bowl and March Madness, is live in all seven states to have allowed sports betting and expects to enter further states soon, with Indiana and Iowa the most recent states to pass bills to legalise sports betting,” he said.
Although Bowcock acknowledged that the bookmaker’s enhanced customer due diligence measures impacted online revenue in the period, gross win margins returned to normal levels and with MRG now integrated with the business, he forecasts further growth online.
“Online continues to show good momentum as we focus on growing our mass market customer base, while retail has begun to adapt to the new £2 machine gaming stake limit,” he said.
“There were record actives for Cheltenham and the Grand National reflecting positive underlying customer trends, and we expect that the Mr Green performance will drive further progress in online performance later this year,” he said.