William Hill H1 2020 net revenue dives 32% on retail Covid struggles
Operator reveals 119 UK shops will close permanently as £24.5m of government furlough cash is repaid
William Hill’s net revenue fell by 32% year-on-year during the first half of 2020 following the closure of its retail portfolio and cessation of sporting events due to the coronavirus pandemic.
The London-listed operator reported H1 2020 revenue of £554.4m, down from the £811.7m reported in H1 2019.
Company profit before interest and tax also fell by 85% annually, from £76.2m in 2019 to £11.8m. Hills’ financials were boosted during the period by a £201.6m VAT refund from HMRC following a successful legal challenge over incorrectly levied tax.
Online net revenue, which accounts for 67% of total revenue, was flat amid a 1% increase to £369.3m, as operating costs fell by 2%.
UK online net revenue fell by 8% to £225.5m from a previous H1 2019 high of £244.9m due to the absence of sporting events and a decrease in staking levels.
Hills said the return of sport later in H1 saw sportsbook staking levels normalised with strong gross win margins throughout the first half.
The proportion of Online revenue generated internationally reached 39%, due in part to the completion of its Mr Green acquisition and strong growth in the international business.
International online net revenue jumped 17% to £143.8m in the same period, a rise Hills attributed to “increasing traction” from product developments launched in 2019, together with a shift from retail to online following the lockdown.
The group also cited strong progress in the Nordics, with Sweden returning to growth and net revenue from Denmark almost doubling during the period.
Online sportsbook net revenue fell by 13% during H1 to £132.4m, due in part to the cancellation of sporting events. Online gaming net revenue rose by 10% to £236.9m, or 6% on a pro forma basis.
Elsewhere, Hills’ retail operations were severely affected by the Covid-19 lockdown, with retail net revenue falling 62% during H1 2020 to £146.9m.
This decrease was mirrored in its retail sportsbook, where net revenue more than halved (57%) to just £87.5m during H1 and retail gaming, where net revenue dropped by 68% to £59.4m.
Hills had conducted a “forensic analysis” of its retail footprint during 2019 which has been revised following the coronavirus pandemic, with retail footfall now expected to return to 80% of pre-Covid-19 levels.
Following the analysis, Hills has confirmed 119 of its 1,533 betting shops will close permanently, with staff members redeployed throughout the remaining retail estate, although some will be made redundant.
William Hill revealed it would repay Coronavirus Job Retention Scheme cash totaling £24.5m back to the UK government following “robust recovery” in the first few weeks of H2 2020.
William Hill CEO Ulrik Bengtsson
Hills CEO Ulrik Bengtsson said he was delighted by the firm’s performance, hailing Hills’ “remarkable” team performance during the pandemic.
“We have clear proof that our strategy of focusing on customer, team and execution is working,” said Bengtsson.
“Our trading was strong before Covid-19, we controlled costs effectively during lockdown and we have recovered well post-lockdown with good performances in our online businesses throughout the first half.
“We have continued to develop both our technology platform and our product offerings, with more significant enhancements to come in the second half.
“The balance sheet has been strengthened by the prompt actions we took to keep cash in the business, the successful placing, and the recognition of the VAT refund,” he added.
In the US, wagering activity for H1 2020 dropped by 29% due to Covid-19 as net revenue fell 28% amid an operating loss of -£8.1m for the first half.
Hills’ share price increased by 4.4% in early trading.