William Hill’s profits fall over Covid-19
Bookmaker hit by pandemic closures
BUSINESS: William Hill has reported annual profits crashed by 91 per cent after the pandemic forced the closure of its betting shops and saw live sports events cancelled.
The group, being bought by US casino giant Caesars Group, was left nursing underlying pretax profits of just £9.1m in 2020, down from £96.5m in 2019.
GAMBLING GIANT William Hill has reported annual profits crashed by 91 per cent after the pandemic forced the closure of its betting shops and saw live sports events cancelled.
The group – which is being bought by US casino giant Caesars Group in a £2.9bn deal – was left nursing underlying pretax profits of just £9.1m in 2020, down from £96.5m in 2019.
Its 1,414 betting shops were hit hard by repeated lockdowns and restrictions, with the retail arm slumping to a £29.5m loss as likefor-like revenues plunged 30 per cent.
William Hill’s online business – accounting for 61 per cent of group revenues – delivered a 3 per cent rise in earnings to £121.9m, but this was not enough to offset the retail woes.
Chief executive Ulrik Bengtsson said the group’s betting shops traded strongly when they were able to open.
He said: “Retail bounced back very quickly and I anticipate that to happen again, we can then assess the long-term performance.”
Mr Bengtsson added: “We will come back strongly and quickly.”
Results showed its net revenues slumped 16 per cent as the pandemic led to widespread disruption of live sporting events as well as the retail and casino closures.
But it said: “2020 has been a decisive year for William Hill, with careful financial management leaving the balance sheet in a healthy position, enabling the group to capture the opportunities
that 2021 will bring through the acquisition by Caesars and their intention to seek suitable partners or owners for the nonUS business.”
William Hill agreed to a takeover by Caesars in November and its suitor saw off competition from rival bidder, private equity giant Apollo.
Mr Bengtsson said: “The William Hill brand remains highly regarded and is well-positioned for its future under new ownership.
“I am indebted to my colleagues and employees, who have made this happen and realised such value for our shareholders.”
William Hill employs 1,300 people in Leeds.
David Kimberley, analyst at Freetrade, said: “William shareholders won’t love today’s results but there’s plenty to be upbeat about too.
“Shrinking revenues were largely due to Covid but they’re also a reflection of the increasingly tough regulatory and competitive market in the UK.
“Credit card bans and stake limits are not life-threatening for the group but they’re going to leave a dent in earnings.
“An upcoming review of the UK’s gambling laws could also mean regulation in William Hill’s home market gets even tougher.
“That’s why most shareholders will be looking to the US as their salvation.
“It may represent a small chunk of earnings now but that could change easily.
“New Jersey authorities illustrated this last month when they published results showing online gambling revenues had doubled in December 2020.
“Such stats mean William Hill’s claim that it controls 20 per cent of US market share bodes well for the future.
“Shareholders will be hoping that the trend continues, with the Caesars Entertainment acquisition allowing the two companies to maintain a strong position in the US betting market.”