ookmaker announces revenue rise to us$ 1.74 billion but says relationship with Israeli gaming software specialist must change. William Hill has said its strong-performing joint venture with Aim-listed Playtech, which now generates almost 40% of the bookmaker's operating profits, must change.
The group's performance is becoming increasingly dependent on William Hill Online, a complex joint venture company in which the Israeli gaming software specialist firm Playtech has a 29% share.
William Hill's chief executive, Ralph Topping, said he and the chairman, Gareth Davis, met on a monthly basis with counterparts at Playtech. "Discussions about the future are positive ... despite colourful episodes over the past three years [the joint venture] has been good for their investors and good for our investors."
However, he added: "The current arrangement is one that needs to change – both organisations recognise that." Topping was speaking after William Hill announced a 6% rise in revenues for last year to us$ 1.74 billion and flat operating profits of us$ 437.6 million.
Last year relations between William Hill and Playtech reached such a low in Israel that scores of staff walked out. In a separate flare-up, William Hill last February secured an interim injunction against Playtech relating to the software firm selling services to rival bookmakers.
At the start of next year, William Hill has the option to acquire the 29% stake in WHO that it does not already own and now looks certain to seize this opportunity to take full control. WHO operating profits grew by 17% to us$ 169.6 million while profits from William Hill's traditional betting shops fell 4% to us$ 312.3 million. The group is Britain's largest bookie, with almost 2,400 shops.
Topping said a cluster of poor football results during one weekend in November hurt the bookie's margins as a number of accumulator bets paid out. One Maltese punter is said to have won more than euros 600,000 on a 1 euro accumulator bet.
Topping described the performance of William Hill's betting shops as resilient, with growth across all its offerings, including horse racing. However, the business continues to become increasingly focused on its touch-screen machines offering roulette and other games. These now account for about 50% of shop takings and an even greater proportion of profits.
He said average weekly machine takings had risen to us$ 1,501 for the last three months of 2011. The group has about four machines in each shop.