William Hill Shares Drop After Announcement of Lower Than Expected Full-Year Profits

UK bookmaker William Hill has issued a warning that full-year profits will be lower than originally intended, citing the crackdown on fixed-odds betting terminals (FOBTs) and the closure of customer accounts to battle problem gambling and money laundering.

Other issues William Hill claim added to the problem include tax increases and an increase in the regulation of high-street bookmakers.

Decline

The bookmaker has dropped its expected profits to between £225 and £245 million, a drop of £20 million from there initial forecast, with profits in 2019 expected to drop by a further £25 million.

Speaking of the figures, Philip Bowcock, CEO of William Hill, said:

“Adverse regulatory and tax changes will impact online profit growth in 2018 and 2019, including enhanced customer due diligence processes and an increase in Remote Gaming Duty to 21 per cent.

“The gross effect of these is to reduce profit by £20m in 2018 and a further £25m in 2019. The net effect in 2018 is expected to be lower given the offsetting positive impact of online’s otherwise strong underlying performance, and from 2020 onwards the online business is expected to return to strong operating profit growth.”

Online and US markets

William Hill’s online business is expected to boom if a proposed take over of MRG, operators of the Mr Green group, goes forward as expected, adding to the blossoming success the company is enjoying in the newly regulated US market. Bowcock explains:

“We have recently announced the proposed acquisition of MRG for £242m. Our strategy is to build a digitally led, geographically diverse gambling business, and this acquisition will bring us an enlarged pan-European footprint in faster growing digital markets, an established Malta hub from which to expand online internationally and a team with a proven track record of consistently strong revenue growth.”