Joint 5: William Hill (2016)
If Amaya had a rollercoaster 12 months then William Hill was stuck on something akin to a ghost train with it having endured a number of scares over the past year. A higher than anticipated number of self-excluders, the difficult roll-out of Project Trafalgar, costly bonus abusers and punter-friendly Cheltenham Festival results were just some of the issues which would have given former CEO James Henderson nightmares.
The combination of these problems created a not-so-perfect storm. Even when factoring in the bulk of Euro 2016, H1 revenues were down 3% year-on-year, profits fell by a third and, as a result, William Hill and Henderson parted company. The firm is currently being led by CFO Philip Bowcock on an interim basis.
The resulting deflation of its share price piqued the interest of 888 and Rank which together proposed a three-way merger. However, this was given short shrift by the board with chairman Gareth Davies being particularly blunt in his appraisal of the offer. Davies’ unambiguous rejection of the 888-Rank tie-up could well be explained by William Hill’s recent confirmation of merger talks with Amaya, which may date as far back as Amaya’s strategic review in the spring.
And you can see why the likes of Amaya, 888 and Rank will have been keen to combine with William Hill. For all its issues, the operator remains a formidable beast with a customer database and brand that would see hands bitten off. While it has fallen two spots to joint-fifth place on this year’s ladder, there are early signs of an online recovery underway. Under the digital stewardship of new online MD Crispin Nieboer, Hills has been tightening the screws of its new front-end which is increasingly giving the firm greater flexibility and control over customer-facing elements. The firm has also invested in technology through the acquisition of Grand Parade and a 20% stake in NYX Gaming.
Nieboer recently told analysts early results had been encouraging, with an improvement in player values and retention rates since May and no deterioration in self-exclusions. And the firm is being realistic in its ambitions with 2017 earmarked for stability before pushing on the following year. However, a two-year turnaround may see them lose further ground to rivals so an acceleration of strategy through M&A could well be the answer, in the short-term at least.