William Hill suffers £238m blow as Australia bans bets on credit

A MISTIMED entry into the Australian market has forced William Hill to take a £238m writedown, pushing the group to an annual pre-tax annual loss.

Philip Bowcock, its chief executive, said the writedown was taken after politicians in Australia took measures to prevent punters being able to make bets using credit.

The company is also waiting to see if a point of consumption tax levied at 15pc will be introduced in two more Australian states, in addition to the two where it already exists.

Mr Bowcock, the former finance chief who has been running the book- maker for almost a year, said that when the bookie entered Australia in 2013, taxes were in the high single digits, but could soon hit 40pc to 45pc.

The change in stance from the Australian government has “without doubt caught people out”, Mr Bowcock said. The £238m writedown against the business, which makes up 7pc of group revenues, pushed the company to a £74.6m pre-tax loss for 2017 compared to a £181.3m profit in 2016.

Without this and other exceptional items, pre-tax profits were up nearly a fifth to £255m. Group revenue rose 7pc to £1.7bn. In terms of the UK, Mr Bowcock said money had been saved from online marketing costs and put into developing its mobile and web presence.

He said the company’s efforts had paid off, with the average amount each customer spent and the number of new punters both on the rise. William Hill’s retail estate of betting shops, which accounts for more than half of sales, continued to weather the high street storm. Net sales rose above £900m, but higher costs meant operating profits in the division dipped 1pc to £161m.

Mr Bowcock warned that if stakes on controversial fixed odds betting terminals, known as FOBTS, were slashed from the maximum £100 now to just £2, it would have a devastating impact.

“If the decision is £2, then there will be a significant number of shop closures,” he said. “KPMG has estimated 3,000 would close across the industry, which would hit workers, their families and also the horse racing industry.”

Horse racing receives a significant amount of its funding from the bookmakers and Mr Bowcock said it could suffer a £55m hit if stakes on FOBTS were moved to £2. The Government is currently analysing the responses to its consultation on FOBT stakes.

Mr Bowcock said the firm was readying a war chest to plough into marketing in the US should the Supreme Court there remove a ban on sports betting. A decision is due by the summer.