The bookmaker William Hill, which is based in the U.K., revealed that its profits declined by 7% over the fourth fiscal quarter of 2014. The company’s shares fell by more than 4% after it reported the 7% decline in its quarterly operating profit.
William Hill also shared its projection for its full-year results. British bookmaker explained that it expects an 8% revenue increase and an 11% operating profit increase. The operating profit was also forecast to reach £375 million, which would surpass initial analysts’ estimates of £357 million.
The Chief Executive Officer of the company – Mr. James Henderson – shared in the statement that despite the lower performance, William Hill believed it had managed to deliver its “best ever full-year operating profit result”.
A trading update was issued by Hills today with the explanation that the its performance over the final quarter of the year was put under pressure by the troublesome results in football and horse-racing. In comparison, the results posted over the quarter were lower than the ones reported over the same period a year earlier, which are considered relatively strong.
According to William Hill’s statement the sports betting revenue declined over the period at both retail and online. The disappointing result is believed to be due to a hasty converting of financial instruments into cash.
The U.K.-based bookmaker also revealed that its Over-the-Counter turnover fell by 1% only. On the other hand, its online handle increased 16%. The in-play increase amounted to 27% and the pre-match rising was 8%. The company’s gross margins fell by 2.6 percentage points in retail and 1.3 percentage points in online betting.
The revenue generated by the company’s mobile operations was reported to amount to more than one half of online wagering and to 38% of online gaming revenue. William Hill also shared that its retail gaming machine revenue win on a weekly basis increased by almost 6% and reached £974.
William Hill Australia, however, reported a great performance over the fourth fiscal quarter due to the important Spring Carnival period, which turned out to be favourable for the company’s results. In addition, it managed to shrink its cost per acquisition by 25%, while the reorganization of the customer base provided it with the opportunity to boost its net revenue by 15% in spite of the fact that its turnover fell by 13%.
William Hill is not the first U.K.-based bookmaker, which has been dealing with some difficulties due to serious scrutiny by local regulatory authorities last year. The country’s Government put limits to controversial fixed-odds betting terminals. A surprising 25% duty rate for fixed-odds terminals was revealed in last year’s budget.
The company did not provide a thorough projection for 2015, but shared the year got off to “a difficult start”. William Hill also issued a warning that its expenses could rise with an extra £5 million over the current year because of the new policy of the European union, which applies VAT to electronic services.
