Fund manager Silchester takes a stake in under pressure bookmaker William Hill

SILCHESTER International, which is a major backer of supermarket Morrisons and publisher Pearson, has taken a 5pc stake in the bookmaker William Hill.

The Mayfair-based fund manager, founded by Stephen Butt, owns 5pc of the stock, which has almost halved in price compared to its four-year high of 465p.

The bookie has been under pressure from falling profits, the spurning of two potential mergers and the abrupt departure of chief executive James Henderson last year after just two years in the role. Profits have fallen by more than a third from £277m in 2012 to £181m in 2016 and Philip Bowcock, the former chief financial officer, now heads the firm.

More broadly, investor sentiment towards the gambling industry is in flux because of a triennial review by the Government. One focus of this review concerns fixed-odds betting terminals, or FOBTS, which have been labelled the “crack cocaine” of the gambling industry because punters are able to bet up to £100 every 20 seconds.

Both Labour and the Liberal Democrats proposed in their election mani-

Investor sentiment towards the industry is in flux

festos cutting this to as low as £2, a move that could hit profits for firms whose shops rely on these machines. Conflicting reports have emerged in recent weeks about what the Government might do in its triennial review but the Department for Culture, Media and Sport has said it is still planning on releasing its findings in October.

Unlike hedge funds, Silchester, which is now the fourth largest institutional investor in the bookmaker, does not bet against shares through short selling but focuses on traditional “long” investments in stocks, betting the shares in a company will rise.

The investor took a major stake in grocer Morrisons when it was under attack from short-sellers and remains the largest institutional shareholder in the retailer at nearly 8pc.

It is also the top investor in publisher Pearson, whose shares have more than halved in the past five years to 612p.

The fund declined to comment on its position in William Hill yesterday.