William Hill Blames Lower-Than-Expected Profit on Unfriendly Sports Results

UK gambling operator William Hill today posted a trading update for the 52 weeks to December 27, 2016. The company highlighted operating profit standing at the bottom end of previously announced expectations.

A full-year financial report will be published on February 24, 2017. Until then, William Hill revealed that it had generated operating profit of around £260 million during the reviewed twelve months.

The UK bookmaker had originally projected operating profit of up to £300 million for 2016. Discouraged by the unsatisfactory performance of its online division, the company posted a profit warning in March, lowering expectations to £260-£280 million for the full calendar year.

Apart from William Hill’s underperforming online business, customer-favorable sports results were also blamed for its lower-than-expected performance. Last year’s edition of the Cheltenham Festival was one of the worst in history for gambling operators. William Hill admitted seemed to be one of the most seriously hit by the unfriendly results.

In its previous trading update, one posted on November 14, 2016, William Hill said that its online division has marked a positive growth during the 17 weeks from June 29, 2016 to October 25, 2016. Net revenue from online operations increased 4% year-on-year. Gross win margin stood at 8.4%, creeping up 0.1 percentage points from a year earlier.

Overall group revenue increased 6% for the reviewed period. In today’s update, William Hill said that gross win margins were below expectations in the nine weeks after the November 14 update. Those were affected by unfavorable football and horse racing results.

In his comments on the latest financial information released, William Hill Interim CEO Philip Bowcock said that they have seen certain improvement in their online and Australian divisions and that they are positive about the company’s profitability in 2017.

William Hill is still in a search-out for a new head after former CEO James Henderson was ousted in the wake of the company’s profit troubles.

Overall, the major bookmaker had a year full of events, during which it lost its Chief Executive, admitted that its online division has not been performing effectively and competitively enough, and was involved in two merger and acquisition deals with other industry-leaders but abandoned them both, urged by investors. William Hill was also dethroned as the owner of UK’s largest retail betting chain after rivals Ladbrokes and Coral combined their businesses to create a retail network comprised of over 3,500 high street betting shops.

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