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Tough q3 but William Hill on track to meet full year guidance

William Hill plc stayed true to its recent trading update in releasing its third quarter numbers this week, recording a 3% drop in revenues in a tough quarter. However, the year-to-date numbers are up 3%, and analysts expect the company to meet market expectations on its full year results. The news gave the share price a fillip, peaking at 9% at one point.

In common with other bookies, William Hill has had an uncomfortable quarter thanks to gambler-friendly football results, but the company reports that retail betting volumes have been good since the football season started in mid-August, with many winners re-betting their credit balances. The group's online gambling interests in William Hill Online, especially on sportsbetting, have also been strong performers.

William Hill spokesmen said football margins had returned to being in line with usual trends in the latter part of September and October. Horseracing results were unfavourable in July and August but some recovery was seen in September.

Over-the-counter gross win was down 21% in the third quarter, however over-the counter turnover improved, being down only 4%, compared with an 11% fall in the first six months.

Revenue from gaming machines rose by 4%.

The company reiterates that it has embarked on a programme of cost-cutting initiatives, including moving its online sports betting and gaming operations from Britain to Gibraltar, which it expects will save around £4 million in 2009 and £10 million in 2010.

Net revenue from William Hill Online rose an impressive 56% in Q3, and by 2% on a pro-forma basis. Sportsbook net revenue fell 36% compared with Q3: 2008 despite overall turnover from the sportsbook in the third quarter increasing 40%. The company posted a net revenue margin of 3.2%, over 50% lower that last year's 7%.

WHO's relationahip with Playtech plc again showed promise, with net revenues from online casino, poker, bingo and skill games soaring by 98% from Q3: 2008, in line with management expectations. William Hill chief exec Ralph Topping said that the switch to the Playtech platform was almost complete, paving the way for better results.

"William Hill Online is continuing to make good progress with especially strong growth in sportsbook volumes," he added. "With the launch of our new Playtech casino before the end of October, integration of our acquisition will be complete."

Source: InfoPowa News

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