William Hill seeks to improve £425m liquidity position as Covid-19 causes chaos
London-listed operator cancels dividend payment as sporting calendar grinds to a halt
William Hill has confirmed it has access to an undrawn “revolving credit facility” of £425m, which can be accessed if the operator’s financial position worsens as a result of the coronavirus pandemic.
In an update, the London-listed company reiterated the presence of the facility and said it was working with banking partners to improve its existing liquidity position. As part of this, William Hill will suspend payment of 2019’s final dividend until further notice.
“There are a number of mitigating activities available to us to reduce our variable cost base and manage our cash flows efficiently, and those actions are underway,” said the firm.
“We have implemented a number of measures to ensure normal operations, invoking our business continuity plans where appropriate. In addition, large parts of the group continue to operate on a ‘business as usual’ basis, albeit while working from home.”
Should specific events occur, company EBITDA will reduce by £100m to £110m, with every additional month of closure decreasing EBITDA by between £25m-£30m.
These specific events include UK and international football resuming in August, the cancellation or rescheduling of Euro 2020 and the closure of its UK retail shops for a period of one month.
Other changes considered include the cancellation of the Grand National and Royal Ascot, as well as the resumption of US sports in September.
Hills CEO Ulrik Bengtsson said these were “truly unprecedented times” for the firm but claimed that bettors were turning to non-traditional markets such as horseracing, greyhounds, international football and virtual sports following the cancellation of other events.
“We are taking action to maintain our operational capability, secure and enhance our liquidity, and ensure we are in a strong position to resume full operations when the sporting calendar returns to normal,” said Bengtsson.
“We have been quick to initiate our business continuity plans, which have been in place for some weeks, with our colleagues’ and customers’ welfare highest on the agenda,” he added.
Hills confirmed that Q1 2020 trading had been ahead of expectations prior to the cessation of sporting events, buoyed by favourable sporting results and a strong retail performance.
Fellow FTSE-100 listed operators GVC and Flutter Entertainment have both said they expect EBITDA losses as a result of the current lockdown on sports, with Flutter estimating a hit of between £90m-£110m.