William Hill Releases Trading Update
Friday April 19, 2013 : STRONG PERFORMANCE FROM WILL HILL IN LATEST TRADING UPDATE
Performance over the first weeks of 2013 detailed
Online and land gambling group William Hill plc has published an interim management update on the group's performance in the 13 weeks to April 2, 2013, reporting significant strategic progress and continued profit growth.
Financial highlights in the period included:
* Group net revenue up by 15 percent and operating profit up 8 percent on the same period last year.
* Online made a major contribution, with net revenue up by 21 percent and operating profit up 13 percent.
* Retail net revenue grew by 8 percent, although operating profit was 3 percent lower.
* Sportsbook net revenue was up 47 percent.
* Mobile Sportsbook amounts wagered grew by a remarkable 145 percent.
* Mobile gaming net revenue grew by an outstanding 298 percent.
Key group operational and corporate highlights of the year-to-date have included:
* Development of online and mobile business continues apace
* Online operations including Australia contributed 45 percent of operating profit in the period
* Sportsbook amounts wagered surpassed OTC amounts wagered in all 13 weeks of the quarter, averaging 110 percent of OTC betting levels in the period.
* Mobile amounts wagered beat the company's GBP 15 million target, averaging GBP 18.2 million a week
* Mobile accounted for 35 percent of Sportsbook amounts wagered in the period
The group also reported the successful completion of significant corporate activity:
* GBP 424 million acquisition of outstanding 29 percent of William Hill Online completed on 15 April 2013
* GBP 373 million (net) raised from rights issue; completed on 5 April, with over 98 percent take-up
* GBP 459 million acquisition of Sportingbet Australian business completed on 19 March 2013
Ralph Topping, chief executive of William Hill, commented:
"It has been a successful start to 2013 in trading terms, moving forward with our strategy, expanding into Australia and taking full control of William Hill Online.
"It was pleasing to receive such clear support from shareholders for the William Hill Online acquisition and the rights issue. We also welcomed Sportingbet Australia into the William Hill Group in March and, having spent more time on the ground with the Aussie team, I am confident of its ability to take advantage of the opportunities in this key territory.
"Operationally, performance remains good, with strong gross win margins a feature of the period in both Retail and Online. We have two strong channels, with both responding well to opportunities and challenges.
“Cheltenham results were not as good for us this year but just after the quarter end, Auroras Encore made the Grand National a major success for William Hill, even beating our record win achieved on the race in 2009 when Mon Mome romped home at 100-1. Both of these big meetings proved to be significant attractions for mobile bettors.
"Our app was downloaded 45,000 times on Grand National day and 51,000 times during the Cheltenham Festival, putting us at the top of the downloads league for both events.
"Mobile remains a high priority and is now a major contributor to Sportsbook's continued growth. We have beaten two of our three Sportsbook and mobile targets ahead of schedule and are focusing on making mobile more than 40 percent of Sportsbook stakes before the end of this year.
"Having grown our UK online market share from 10 percent to 15 percent over the last four years, we aim to increase our share and are making significant investments in marketing, technology and people to achieve that."
The company noted that William Hill Online continued to perform strongly, delivering 21 percent growth in net revenue and operating profit of GBP 43.3 million, 13 percent higher than the prior year. Playtech's non-controlling interest was GBP 12.6 million.
Sportsbook amounts wagered increased 30 percent in the period, with good growth in both in-play and pre-match wagering levels. Sportsbook gross win margin was 1.2 percentage points higher at 10.0 percent, reflecting favourable sporting results. As a result, Sportsbook net revenue grew by 47 percent.
Mobile Sportsbook amounts wagered grew 145 percent and accounted for 35 percent of the total Sportsbook amounts wagered in the period.
Gaming net revenue was up 2 percent, with Casino growth of 4 percent partially offset by declines in Bingo and Poker.
Mobile gaming net revenue grew 298 percent following the launch of a series of gaming mobile websites and apps in 2012. The prior year results included the contribution of certain markets that were closed to customers during the course of 2012. Total operating profit contribution from those markets in Q1 2012 was cGBP 2 million.
Online operating costs were 28 percent higher, with marketing investment representing 29 percent of net revenue in the period, broadly in line with expectations.
Other operating costs grew 17percent, largely driven by increases in headcount, trading and IT, depreciation and content costs.
The Group's net debt for covenant purposes increased by GBP 403 million to GBP 742 million at the end of the period.
Subsequent to the period end, on 5 April 2013, the Group completed a 2-for-9 rights issue, raising around GBP 373 million (net of expenses) with 98.23 percent of shareholders taking up their rights.
