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William Hill reports 9% decline in profits

William Hill Online, the Internet gambling wing of major British betting group William Hill plc, was a bright spot in an otherwise lacklustre set of results released this week that showed a 9% decline in the group's full year 2009 pre-tax profit to £197.5 million (2008 FY £216.1 million).

Chief executive officer Ralph Topping said that 2009 had been a tough trading environment, and the numbers reflected this.

Full year revenues increased 4% to £997.9 million from £963.7 million in the comparable period prior year, benefited primarily by a surge in online revenues.

"2009 has been a year of transformation, and we are particularly pleased with the progress made by William Hill Online," Topping added.

William Hill Online's net revenue was £203.5 million, up from £125.1 million in 2008. The Internet division reported 665,000 new accounts, an impressive 28% increase.

Online operations were integrated in 2009 following the group's acquisition of assets from Playtech, the online gambling software provider, in December 2008.

"We have made great strides," Topping said in releasing the results. "William Hill Online is nearly unrecognisable from one year ago."

Breaking the numbers down, online revenues grew 63 prcent to £203.5 million from £125.1 million in 2008, vindicating Topping's faith in the Internet medium.

The company noted that its gaming products performed strongly in 2009, achieving a net revenue growth of 95%. Casino and bingo/skill continued to perform well, increasing net revenues by 120% and 41% respectively, reflecting strong growth in new accounts, up 39% in casino and 63% in bingo. Poker revenues for the year were up by 36% compared with William Hill's previously standalone online business.

On the land gambling front, William Hill added 55 new licences for betting shops during the year, but closed 14 outlets in Ireland and is reviewing the remaining 35 shops.

A reduction in over-the-counter betting was partially offset by the performance of gaming machines and more favourable football results late in the season. Telephone betting operations were disappointing, recording a loss of £1.8 million.

Topping said that current trading is generally flat, but the group anticipated good business later this year when the World Cup football kicked off in South Africa, an event that he expected to generate around £10 million in additional revenues.

Group net debt for covenant purposes decreased to £602.6 million, following a £350 million rights issue last February and a strong operating cash flow.

Adjusted earnings per share were 20.6p, down from 31.9p, reflecting the increased number of shares resulting from the rights issue and exceptional charges, including £10.2 million integration costs for online operations and a £20.5 million fair-value loss on legacy hedging arrangements.

Source: InfoPowa News

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