William Hill profits plummet 91% in 2020 as pandemic impact financials

William Hill has reported a 16% year-on-year drop-off in 2020 net revenue to £1.3bn, while annual adjusted pre-tax profit crashed 91% with the closure of its 1,400 UK betting shops due to coronavirus.

The London-listed operator revealed statutory profits before tax of £51m and that it benefitted from a VAT refund from the UK government of £208.3m.

This refund offset a retail non-cash impairment of £125.7m and costs of £70.4m associated with its forthcoming takeover by Caesars Entertainment.

On a proforma basis, Hills’ online net revenue rose 7% in 2020 to £802.8m, driven by a 10% increase in online gaming net revenue to £482.2m and a 4% rise in online sportsbook revenue to £320.6m. However, annual adjusted pre-tax profits slumped to £9.1m from £96.5m the year before.

At a divisional level, the operator reported a 12% jump in international online net revenue to £299.6m during the last 12 months, thanks in part to a growth of market share in Sweden and Denmark and a positive performance in Italy.

UK online revenue increased by 4% during 2020, rising to £503.2m, which the operator attributed to the impact of new platform and product launches throughout the year.

Online operations accounted for 61% of William Hill’s total revenue in 2020, posting online staking levels of between 30% and 50% of pre-Covid-19 levels.

Double-digit losses were reported in the operator’s retail division, with overall retail net revenue tumbling by 30% to £354.2m in 2020 on a like-for-like basis.

Retail gaming net revenue fell by 35% on a like-for-like basis to £141.5m in 2020, while retail sportsbook net revenue decreased by 26% to £212.7m over the same period.

William Hill’s highly coveted US operations reported a 32% rise in net revenue during 2020 to £167.3m, punctuated by a 21% year-on-year rise in amounts wagered.

“In 2020 we put our strategic plans firmly into action, diversifying our geographical footprint, expanding our team’s capabilities and rebuilding our technology,” William Hill CEO Ulrik Bengtsson said.

“We are embedding proprietary components across the platform architecture and are delivering a constant flow of new features including faster product experience, improved navigation and greater protection to our customers around the world.

“The performance in the second half is clear testimony that our strategy is bearing fruit. In the UK, the competitive position of our online offerings for both gaming and sports has been materially strengthened, and our omni-channel product is delivering encouraging early results.

“Retail has undergone regional disruption although where stores did re-open, they quickly traded towards pre-Covid levels,” he added.

Hills reported a 30% loss in revenue from implementing German transitional regulations and has revealed its expectation that this will result in a reduction to its EBITDA contribution of £10m in 2021.