William Hill Online Q3 profits tumble 37%
Operator hit by £18m UK Point of Consumption tax bill as revenues also fall 3% year-on-year
William Hill this morning reported a 37% year-on-year fall in Q3 online profits and a small decline in revenue, as the operator continued to feel the brunt the UK Point of Consumption (PoC) tax.
In a trading update, the London-listed firm said operating profit was dented by a 175% year-on-year increase in cost of sales, largely attributed to an £18m PoC hit, and also revealed a 3% fall in online revenues.
William Hill’s digital business saw a 9% year-on-year fall in sportsbook revenues during the quarter, with the operator revealing a modest 2% increase in total sports wagers driven by growth across its core markets including the UK and Italy.
However, sportsbook wagers from Hills’ non-core markets fell 14% year-on-year, while the operator’s overall sports gross win margin declined 0.8% to 8.6% in the quarter.
In gaming, revenues grew 2% overall following a strong performance from the firm’s Vegas product, although revenues from non-Vegas casino, bingo and poker declined 17%, 5% and 28% respectively.
But despite a tough operating period for the firm, William Hill CEO James Henderson (pictured) remained optimistic about the company’s current strategy.
“Q3 was always going to be a tough quarter given last year’s World Cup and very strong gross win margin, allied to £23m of additional gambling duties this year,” he said.
“Overall, I am pleased with the strategic progress we are making across the business, particularly around Project Trafalgar and the William Hill brand in Australia,” Henderson continued.
The roll-out of Project Trafalgar, which has been three years in the making, is an integral part of the operator’s strategy and will see the roll-out of a new responsive in the next few months.
“Through Project Trafalgar we have launched a much improved mobile experience across all iOS devices, and we’re on track to complete our williamhill.com roll-out this year,” Henderson said.
“This major technology project is supporting faster product innovation, a better mobile-led customer experience and much improved data to drive an ever more personalised customer service,” he added.
Meanwhile, the operator’s Australian arm reported an 89% reduction in profits on a local currency basis following an 18% fall in amounts wagered and a 24% decline in net revenue.
However, new accounts were up 15% and actives up 10% as the operator continues its process of rebranding its Australian businesses under the William Hill moniker.
William Hill’s share price on the London Stock Exchange was down 6.37% to 323.40p after early morning trading.