William Hill ends difficult year with 9% Q4 revenue rise

William Hill has reported a full-year 2020 revenue drop of 16% to £1.32bn in its penultimate trading update before being taken over by US casino giant Caesars Entertainment.

The downturn was driven by a 30% like-for-like decrease in retail revenue following a series of regional and national lockdowns due to the ongoing coronavirus pandemic.

However, net revenue from the group’s international Online division rose by 12% on a pro-forma basis in 2020, thanks to the integration of the Mr Green business and its successful launch in two new regions.

Gaming net revenue from the same arm rose by 18% during 2020 on a pro-forma basis.

Hills also highlighted product improvements and the implementation of a multi-brand strategy, which helped to offset regulatory headwinds and the absence of live sport during Spring 2020.

UK online net revenue grew 5% in 2020 due to product upgrades and the return of live sport during the final quarter of the year as online gaming revenue from the UK division increased by 20%.

Hills said retail performance during Q3, where lockdown restrictions were eased, would have lifted the group’s retail division to a potentially break-even position during 2020, had this trajectory continued.

However, further lockdown restrictions introduced in Q4 disrupted this recovery, leading to a full year retail loss of £30m.

Hills’ US operations proved the strongest growth area during 2020, with full-year net revenue rocketing by 32%.

For Q4, the operator reported a 9% year-on-year rise in net revenue.

Group sportsbook net revenue rose by 20% for the period, thanks to a 16% increase in sportsbook staking during the period amid a busy sports calendar.

Also in Q4, Hills launched online and mobile sportsbook operations in five new states, leading to 121% net revenue growth in the US during the final three months of the year.

“2020 was a year like no other,” said William Hill CEO Ulrik Bengtsson. “It tested our agility and flexibility and we delivered, keeping our customers and team safe, while materially improving our competitive position through product enhancements and geographical expansion.”

In November, William Hill shareholders approved a £2.9bn takeover bid from US joint venture partner Caesars. The takeover could complete as soon as March.

William Hill CEO Ulrik Bengtsson

Bengtsson explained: “The offer received for the group recognises the substantial progress we have made as well as the opportunities and challenges ahead of us.

“Customer, team, execution have been our guiding lights through this unusual year and they will remain so as we look forward through 2021,” he added.

Regulus Partners analyst Paul Leyland said the Q4 figures marked an impressive end to the year, but suggested they were primarily driven by favourable sports margins.

“William Hill has plenty of excuses for a weak 2020 and Q4 looks better than the previous four quarters from an operational perspective as well as just sports margin luck,” he explained.

“The extent to which decline has been arrested (which is not the same as turnaround), or whether William Hill now has some operational momentum, remains unclear among the noise, and in any event is too early to call.

“In the medium-term, this is largely someone else’s problem, but there are still plenty of operational and regulatory fires raging in the short term to make any deal complacency (or just bad luck) very expensive for Caesars,” Leyland added.