William Hill plots gaming platform launch as April revenue drops 90%
Operator speeds up product development amid 90% drop in revenue between March and April on coronavirus impact
In a trading update today, William Hill revealed it has accelerated its US product development throughout the coronavirus lockdown period and will launch its US-facing online casino during H2.
On building the gaming platform CEO Ulrik Bengtsson told EGR NA in February: “It is a continuous process to build a platform, but it performs really well for us during high peak loads in New Jersey and we will continue to roll it out throughout the year,” he said.
While all land-based casinos remained closed online gaming in New Jersey experienced a YoY uptick of 119% to $80m in April.
However, William Hill’s US revenue was down 90% between March 11 and April 28 on the closure of all Hills betting venues and a lack of professional sports to bet on.
US online sportsbook operations continued in four states following the Covid-19 lockdown however, with bets being taken on several alternative markets.
Overall group revenue dropped by more than half (57%) during in the period.
In March, the group said it expected an EBITDA hit of between $121.5m and $133.6m due to Covid-19, however the operator has said it is now performing ahead of this estimate thanks to ongoing mitigation activities.
William Hill CEO Ulrik Bengtsson said he was “exceptionally proud” of the way staff were handling the challenges presented by coronavirus.
“We took immediate measures to save costs, reduce cash outflow and minimise non-essential expenditure by negotiating with our suppliers, cancelling pay rises and executive bonuses and suspending the dividend,” said Bengtsson.
Total online revenue for the 10-week period to 10 March increased by 16%, with US revenue up 30% and Online international revenue up 35%.
Peel Hunt analyst Ivor Jones reiterated his Buy rating for the London-listed operator.
“William Hill has agreed covenant waivers,” said Jones. “This leaves the group with abundant liquidity to trade through Covid-19 while still investing in tech development.
“Trading in lockdown has been better than guided, but operating socially-distanced betting shops will be a tough challenge, so we are leaving forecasts unchanged,” he added.