William Hill Releases Fourth Quarter Trading Update

UK based betting company William Hill released its fourth quarter 2011 trading update this week, highlighting a strong performance by the company's online department.

William Hill CEO Ralph Topping commented on his company's update, saying “This is a very positive performance, particularly in a year without a significant international football tournament and with a c£9 million increase in VAT payments as a result of the rate change."

“Going into 2011, we were – like many businesses with a strong presence in the UK – predicted to face a challenging consumer backdrop but our overall performance shows we’ve seen the benefit of being a predominantly low ticket leisure activity. November was certainly a very good month for our football clients betting on small stake, high return multiple bets, which comprise the largest part of our Retail football business but football betting in 2011 overall continued to show wagering growth in both Retail and Online."

“As a multi-channel gambling company with a strong management team, we continue to be well placed to leverage the benefits the William Hill brand brings us. I believe there are more opportunities to grow in the UK with investment in marketing and in new technology and innovation taking place in all our channels. There are also good opportunities for the business beyond our traditional roots as more governments open up to regulated gambling. We will, therefore, continue to invest in taking our brand and our capabilities beyond the UK in 2012 and future years.”

Performance indicators for the fourth quarter included:

• Group net revenue expected to be up 6% over the same period last year.

• Group operating profit expected to be around £274 million, down from £275.8 million during the same period last year.

• Online year on year grown expected to be 28%.

• Online sportsbook wagers up 51% over the same period last year.

• Online sportsbook net revenue growth of 36% over the same period last year, with a gross win margin of 7%.

• Online gaming net revenue growth of 24%.

• Retail wagers up by 6% with OTC and machine sales showing growth of 3% and 6%.

• Retail revenue up by c1% for the year despite a weaker margin, and machine gross win growth of c9% (per machine gross win per week of £901).

• OTC gross win margin of 16.8%, down from 17.9% in 2010.

• Retail expenses up by 2%.

• Retail operating profit down by c4% to £196 million.

• Telephone channel as a whole showed an operating loss of £4 million, with losses being attributed to a high staking client and football wagering.

William Hill is expected to release its full 52 week results near the end of February.

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