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William Hill Issues Profit Warning
Wednesday, March 23, 2016 : WILLIAM HILL ISSUES PROFIT WARNING
Online taking a hammering.
William Hill has issued a profit warning in a trading update for the period to March 20, 2016.
The gaming firm said two main factors had negatively affected forecasts in the year-to-date, namely; an acceleration in the number of time-outs and automatic self-exclusions over recent weeks which are impacting the level of actives across the Online business; and gross win margins for Online having been affected by European football results and the worst Cheltenham results in recent history.
The company estimates the time-outs and automatic self-exclusion trend will reduce Online profits by GBP 20-25 million in 2016 should they continue at the current level, while its gross win margins for Online currently stand at 1.9 percentage points below expectation at 6.2 percent.
“Overall, taking these factors together, we now expect the Group’s operating profit for 2016 to be in the range of £260-280m, subject to normalised gross win margins in the rest of the year,” the trading update confirmed.
The broader William Hill Group is reportedly trading well with momentum building in Australia and a solid Retail performance to date.
A number of strategic priorities have been identified concerning Online by interim managing director Crispin Nieboer. These include refocusing the business on maximising UK customer yields, improving performance in non-core markets and assessing opportunities for cost efficiencies.
“Today’s statement reflects the combined effect of our assessment of the impact of recent regulatory changes and unfavourable sporting results including the worst results at Cheltenham in our recent history,” James Henderson, chief executive officer of William Hill, said.
“We are also experiencing softer UK growth as a consequence of acquiring lower value customers. While the rest of the Group is performing in line with our expectations, we continue to focus on improving Online’s performance so that we can, once again, outperform the market.”
In related news, the Group confirmed it is in advanced discussions with an unidentified partner which could see it invest in OpenBet.
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