William Hill show strong online results

William Hill, announced their first quarter results, with some very promising figures:

The groups net revenue grew by 12% in the quarter to 27th March, with retail net revenue up 5%, online net revenue up 33% and operating profit 19% higher. WH said there have been around 190,000 Sportsbook mobile app downloads from launch in the Apple App Store, with 30% of customers being brand new to William Hill.

Ralph Topping, CEO, commented: “I am pleased by our strong performance in the first quarter. Sportsbook wagering grew by 31%, OTC wagering saw underlying growth after taking into account adverse weather during the quarter and sports results contributed to a strong margin.

Our investments in marketing and innovations continue to deliver benefits, with our Sportsbook exceeding £50m in turnover in a single week for the first time during the quarter and mobile turnover reaching almost £11m in a single week. Our mobile performance is now benefiting from our Sportsbook app being available in the Apple App Store, giving us access to thousands of new customers who have never bet with William Hill before, highlighting the growth potential of these new channels and their importance to our multi-channel offering.

With positive underlying trends at this relatively early stage in the year, the Board remains confident in its expectations for the full year.” The Group saw strong year-on-year profit growth in the first quarter of the year, with net revenue up 12% and Operating profit1 up 19%. This was driven by an excellent margin performance from Retail together with continued strong growth from William Hill Online.

The Group’s net debt for covenant purposes stood at £355m at the end of the period (£416m as at 27 December 2011). William Hill Online continued to perform strongly, delivering 33% year-on-year growth in net revenue over the period. Sportsbook net revenue was 58% higher than in Q1 2011 with amounts wagered up 31% and the gross win margin above the expected average at 8.8% (Q1 2011: 7.3%). Strong momentum in mobile betting continued, with amounts wagered up more than 370% in the period.

Bets placed via mobile devices accounted for around 19% of total Sportsbook turnover in Q1. Gaming net revenue grew 19%. Casino net revenue was up 26%, comprised of 37% growth in Playtech Casino and 16% in Vegas Casino games. Bingo net revenue was up 7%. Poker performance was down 8%. Mobile continues to increase in importance as penetration of smartphones and handheld devices grows. The Sportsbook app was launched in the Apple App Store in February and has consistently ranked in the top five free sports apps, having been downloaded around 190,000 times in the quarter.

Bingo was launched as a mobile site during the period. Operating costs grew in line with internal expectations, up 29%, with marketing investment totaling 26% of net revenue for the quarter. William Hill Online delivered an Operating profit of £38.3m, up 29% on the prior year. Playtech’s non-controlling interest was £10.8m. Retail produced another robust performance with growth of 2% in amounts wagered, 5% in net revenue and 8% in Operating profit1.

However with the UK Government confirming its intention to apply a ‘point of consumption’ (POC) tax to the remote gambling industry. William Hill indicated that it currently expects to apply a 15% gross profits tax as from December 2014. However, the exact timing and rate will be reviewed and there will be further consultations on implementation. The Group’s view remains that there is no demonstrable need for the proposed POC regulation based on consumer protection, which is the Government’s justification and that rigorous enforcement would be required to avoid market distortion.

Regarding WH Nevada licensing application to complete William Hill’s US acquisitions is progressing well and remains within the timetable guided. Playtech is required to produce a submission to the regulator as a key supplier and partner, which we anticipate imminently. Wm Hill said the strong performance across the business in the first quarter is pleasing, albeit benefiting from a gross win margin above the normalized and expected range. With positive underlying trends at this relatively early stage in the year, the Board remains confident in its expectations for the full year.