William Hill have announced a pre-tax loss of £37.6 million for 2019.
Bad as though that sounds, it represents an improvement on the firm’s 2018 performance when a loss of £722m was reported.
CEO Ulrik Bengtsson isn’t fazed by the latest loss which came in a year when the government reduced the maximum stake for fixed odds betting terminals (FOBTs) from £100 to £2, a policy implemented in April 2019. There has been a further clampdown on bookmakers regarding problem gambling and there are fears in the sector that the coronavirus outbreak could hit share prices if it becomes a pandemic.
Shop closures have failed to revive company fortunes
William Hill closed 713 high street betting shops in 2019 but the company’s net debt still increased to £535.7m following the purchase of Swedish gaming company Mr Green.
In April this year, the UK government will implement a ban on online deposits with credit cards and Hills are expecting the new legislation to further impact operating profit to the tune of approximately £8million. So what does the future hold for one of Britain’s oldest bookmakers?
US market may be light at the end of the tunnel
There will almost certainly be a further drift away from over-the-counter betting operations. William Hill will also look to increase their share in the burgeoning US market. They currently own around a quarter of the US off-track betting market and their revenue from such in 2019 was up almost 40 per cent from 2018. They recently announced a media partnership with the US TV network CBS that will allow it to provide betting odds across the broadcaster’s TV channels and websites.
There has been an increase in their online development budget so expect more news on existing and new digital platforms shortly. However, investors remain nervous and the company’s share price has dipped in recent days with no immediate action being taken to significantly reduce their overall deficit. The fact that 70 per cent of their business is still UK-focused remains a concern given betting regulations in Britain are set be tightened further.
