William Hill full-year profits fall as UK regulation bites
Operator hails “good underlying” Online performance but enhanced due diligence checks and RGD hamper growth
William Hill today announced a 2% fall in Online adjusted operating profit for 2018 after the London-listed operator continued to feel the pinch of increased regulatory and compliance costs in the UK.
The bookmaker’s Online division reported operating profit of £130.2m for the 53-week period to 1 January 2019, down from £132.5m in 2017, while Online net revenue increased 3% to £634.4m, after 11% growth in H1.
Hills attributed this to the closure of a “significant” number of customer accounts as the result of enhanced due diligence checks, as well as the increased costs from Remote Gaming Duty.
According to the operator, when adjusting for these costs, net revenue and adjusted operating profit increased 6% and 11% respectively following improvements to product and increased marketing efficiency.
William Hill CEO Philip Bowcock described 2018 as a “busy and decisive year” for the business and believes the company is well placed to record further growth in 2019 with the acquisition of Mr Green now complete.
“Key regulatory decisions in the UK and US gave us much needed clarity to set a new five-year strategy and a goal to double profits by 2023,” he said.
“We know the next few years will require careful navigating and investment, but with a clear strategy and diverse, experienced leadership teams in place we are ready to capitalise on the opportunities available to us,” Bowcock added.
William Hill said it was currently in the process of revamping its strategy to focusing on mass market customers which led to average revenue per user falling 17% but the number of active customers increasing 25% to 3 million.
On a vertical basis, sportsbook net revenue increased 3% to £318.7m and gaming increased 2% to £315.7m, while geographically, UK net revenue was up 2% to £484m and international net revenue was up 6% to £150.4m.
The US market has become increasingly important to Hills in recent months following the repeal of PASPA, and its US-facing business delivered net revenue growth of 38% year-on-year having now gone live in seven states.
The William Hill Group, including retail, reported a 2% increase in full-year net revenue and a 15% fall in adjusted operating profit.
The company’s share price was down 1.25% to 185.2p on the London Stock Exchange at the time of writing.