Gambling giant William Hill plc released its third quarter results, and announced it is on track to meet its full year estimates.
Key financial indicators for William Hill in the third quarter were:
- Group net revenue up 2% compared to the same period last year, and up 5% year to date.
- Retail net revenue down 3% compared to the same period last year and flat year to date.
- Online net revenue up by 28% compared to the same period last year and up 28% year to date.
- Group operating profit down 22% compared to the same period last year and down 3% year to date.
William Hill Chief Executive Ralph Topping commented on the results of the company, saying:
“We have delivered a solid performance in Q3, in spite of a highly competitive market place and a tough consumer environment. We continue to invest in product, pricing and innovation."
“Pleasingly, online net revenue growth accelerated in the quarter, as did underlying amounts staked over-the-counter in Retail, and our long-term track record of growth in machines continued in Q3. Internationally, the initial performance of William Hill Online’s new Italian casino website is beating expectations having taken around 8-9% market share and we are the most successful of the non-domestic new entrants."
“The Q3 margin is broadly in line with our long-term average for this quarter but is below the unusually high margin seen in Q3,2010, driven up by football results. Accordingly, Group profits are lower year-on-year, primarily as a result of this and the planned significant increase in Online investment."
“With our leading brand, strong technology, differentiated products and understanding of our consumer, we have a unique opportunity right now to invest to take market share. In the UK, we will be trialling second-generation Storm gaming machines, new self-service betting terminals and high-definition video walls in the shops before the end of the year."
"Across Europe, we are now investing in a highly focused way in key territories such as Italy and Spain for the long-term benefit of the business.”
Comparing the company's results to the same period last year, Topping said:
"Sportsbook continues to perform strongly with amounts staked 51% higher than in the same period of 2010, including growth of 61% in in-play turnover and more than 250% in mobile betting amounts staked. The Sportsbook gross win margin was 6.9%, which was 200 basis points lower than in the same period in 2010. As a result, net revenue grew 17%.
"On the gaming side, Casino growth has been excellent, up 41%, including 40% growth from products designed for cross-sell from sportsbook operations. Overall, gaming net revenue grew 34%, including 14% growth from Poker and 9% from Bingo.
"William Hill Online launched a licensed internet Casino site in Italy at the start of the quarter. Initial performance has been above expectation, with early figures from the Italian regulator, AAMS, indicating William Hill Online is the strongest performing of the non-domestic new Casino entrants to the Italian market.
"Mobile continues to grow strongly following the launch of the new mobile Sportsbook. Sports-betting turnover was up more than 250% in the quarter and total net revenue from mobile betting and gaming increased by more than 300%."
On the UK government's plan to form a new licensing system for offshore online gambling sites, the William Hill Chief Executive said:
"In the Group’s view, there is no public protection risk in the current regime and, therefore, no real justification for the proposed dual regulation," the statement observes. "However, should the DCMS pursue this route, the Group is well placed as William Hill Online already operates to UK standards. The Group intends to be fully involved in shaping a proportionate and effective regime, including appropriate enforcement measures.
"Arising from this announcement, HM Treasury announced that they would review the current legislation and framework of taxation as it relates to offshore companies targeting UK consumers. The Group’s Online and Telephone businesses are currently based in Gibraltar and, as such, the Group could be affected by any changes but it is too early to assess the impact as HM Treasury has not yet advocated any specific proposal."