William Hill gets a kick out of football as it flags 2017 profits outperformance

● But bookmaker warns of Australian business review amid tax pressures

Bookmaker William Hill romped into the City’s good books yesterday as it announced it was on course to beat full-year profit expectations, as it also flagged a strategic review of its Australian arm.

The group said underlying operating profit for 2017 is expected to come in 11 per cent higher at £290 million, well ahead of City consensus forecasts of £272m.

William Hill attributed the outperformance to “good momentum” in both the UK and US markets, aided by “favourable football and horseracing results”. It also highlighted the commercial potential for the football “World Cup year” of 2018.

In addition, the company cited stronger gross win margins and benefits from its restructuring programme as factors in its better performance.

William Hill said that a ban on credit betting in Australia and the likely introduction of a “point of consumption” tax in some states will put profits under pressure, triggering a strategic review of its operations in the country.

City leisure analysts said this could lead to a sale of the business, or formation of a joint venture Down Under.

The company said late last year that it was in early talks over a possible tie-up between its Australian business and rival Crownbet.

Philip Bowcock, William Hill’s chief executive, said yesterday: “We have delivered a strong result in 2017, reflecting our focus on rejuvenating online, growing the US and building an attractive omnichannel proposition.

“At the same time, we are continually improving how we enable customers to gamble responsibly. We are excited about the opportunities ahead in 2018, with our competitive position reasserted in the UK and with the potential for sports betting to open up in the US.”

George Salmon, analyst at broker Hargreaves Lansdown, said: “World Cup years are always big for the bookies. With trading in the UK and US looking better, William Hill is going into 2018 with improved momentum.”

The trading update comes after an announcement in December that betting industry veteran and Football Association director Roger Devlin will be its next chairman.

Devlin will take over from incumbent Gareth Davis on 2 April, William Hill said. His appointment comes amid a wave of consolidation in the gambling sector, with rival Ladbrokes Coral reviving takeover talks with Foxy Bingo owner GVC in a deal worth up to £3.9bn.