William Hill suffers 91% profit slump
- Adjusted profit before tax for 2020 £9.1 million, down from £96.5m
- Net revenues down 16% at £1.3 billion
- Retail division plummets after sporting events put on hold, bookies shut
William Hill reported a substantial fall in underlying profits as the full effects of the COVID-19 pandemic hit home.
The businesses’ High Street operations took a huge hit after live sport was put on hold and betting shops were closed for much of the year.
Like-for-like 2020 retail revenues were down 30%, sparking a £29.5m loss.
There was better news for Hill’s digital division, which saw a 3% rise in earnings as punters were stuck at home looking for entertainment and betting opportunities.
But the £121.9 million in online revenues by the companies sports betting, casino, poker and bingo operations were not enough to offset the drastic retail losses. It also includes the Mr Green online brand figures, after that purchase was completed in January last year.
High Street betting shop woes
The results highlight just how much William Hill still relies on its traditional High Street retail division. Over at Flutter, and although Paddy Power has a big betting shop presence in Ireland, there is considerably more weight in digital operations, allowing it to ride out the COVID-19 storm better.
US casino giant Caesars is still in the process of taking over William Hill in a £2.9 billion deal, and company execs hope to speed up the transition further towards digital. But execs are keen to stress High Street shops are not at risk.
CEO Ulrik Bengtsson was bullish about the results and praised the way the company was expanding its global footprint and adapting its online platforms.
He said: “We began the year well and finished the year even stronger, highlighting the traction generated by our strategic focus on Customer, Team, Execution. In what was an extraordinary year I am immensely proud of how the Group has responded and the resilience we have seen in our performance. We prioritised the protection and safety of both our colleagues and our customers, and our employees went above and beyond for which I thank them.
“In 2020 we put our strategic plans firmly into action, diversifying our geographical footprint, expanding our team’s capabilities and rebuilding our technology. We are embedding proprietary components across the platform architecture and are delivering a constant flow of new features including faster product experience, improved navigation and greater protection to our customers around the world.
“The performance in the second half is clear testimony that our strategy is bearing fruit. In the UK, the competitive position of our online offerings for both gaming and sports has been materially strengthened, and our omni-channel product is delivering encouraging early results. Retail has undergone regional disruption although where stores did re-open, they quickly traded towards pre-Covid levels.
“We are delighted with our International Online performance, where our investment in our product and technology is producing clear benefits, particularly in light of the regulatory headwinds in Germany and temporary restrictions elsewhere. We will continue to benefit from our agile marketing engine, and the recent agreement to acquire Alfabet S.A.S. in Colombia and our licence in Argentina both offer further promising growth opportunities in Latin America.
Strong US conditions
“The US traded well into the year-end, concluding the year with 19% market share and delivering a profitable return. Our partnerships have ensured that brand awareness has risen, our product offering has expanded, and our end-to-end proprietary tech is facilitating rapid new state openings.
“As William Hill embarks on a new chapter, we will continue to prioritise the protection of our customers. The UK Government has commenced the gambling review and we will engage with the relevant stakeholders to encourage evidence-led legislation that finds the right balance to keep our customers safe within a well-regulated ecosystem, to secure the tax base and to secure the industry. 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.”