illiam Hill said Wednesday that betting income is gradually returning to pre-Covid levels but it expects core earnings hit by further local lockdowns triggered by a new coronavirus, as well as a string of unpredictable results in sports being played behind closed doors.
The bookmaker, which is the subject of a 2.9 billion pound takeover by Caesars Entertainment, reported third-quarter revenues that were 9% lower than the same period last year, with growth in the United States cushioning the decline. The result was a significant improvement on the first six months of the year, when it took 32% less from punters than in the first half of 2019, due to the cancellation of live sport and the prolonged closure of high street shops.
William Hill operated 1,414 shops during the third quarter as it moved the majority of its estate back into action following lockdown restrictions and said like-for-like sales were just 2% below last year as punters returned. But it said a four-week lockdown of 100 shops would wipe 2 million pounds off operating profits. At present, 10% of its retail estate – about 140 shops – is located in areas where the Covid alert level is classified as “very high”, signalling an ongoing drag on profits.
Furthermore, bookmakers rely on being able to estimate the likely winners of sports fixtures, in order to set appropriate odds. But the fact that sport has been played without without the psychological influence of fans on players, has given rise to some unlikely results. “As a result, we continue to see volatile gross win margins, and we would expect this situation to continue,” William Hill said.
Revenues in William Hill’s US business were up 10% and it said it expected to update the market on the takeover, which is subject to approval by shareholders, in due course. William Hill's online offering saw net revenue climb 4% in the UK and 6% internationally.
Sports content and the in-person retail experience were slower to resume in the US, with MLB, NBA and NHL only recommencing their 2020 seasons late in July. William Hill is now live in 14 US states, having opened in Colorado, Illinois, Michigan and Washington D.C. during Q3 and Pennsylvania during October. The wagering segment took 72% of handle through mobile channels.
“We are very pleased with the trading performance of the Group, which has been borne out of the commitment, resilience and hard work of our teams across the business. I could not be prouder of them," stated Ulrik Bengtsson, Chief Executive Officer. “We have moved the company forward with our relentless focus on our customers, enhancing the competitiveness of our product, and maintaining player safety as one of our highest priorities. We have reinvigorated the leadership team and they, in turn, have empowered their teams to deliver on our plans.”
In Germany, where the online gaming market officially opened on 15 October, William Hill said it rolled out several measures, including deposit limits of EUR 1,000 per month and the removal of live casino. The sports betting licencing process has also restarted and the compay is actively pursuing applications for those licences. "With a multi-brand approach and returning advertising capabilities, we anticipate the EBITDA contribution from Germany for 2021, will be reduced by £10m after mitigations," William Hill stated.