Gaming stalls as online sportsbook drive Hills growth
Amounts wagered on mobile sportsbook more than doubles in H1 2013 but gaming growth flat year-on-year
William Hill’s online sportsbook grew by 44% in the first half of 2013 driven by mobile growth and strong margins, but gaming showed no growth in the firm’s first set of results since it completed the buyout of its joint venture with Playtech.
The strong rise in net revenues from online sports betting to £116m pushed overall online revenues up 18% at William Hill Online, with operating profit from the interactive arm up by 16% to £80.2m compared to H1 2012.
Amounts wagered on the sportsbook increased by 26% and favourable football and racing results produced a gross win margin of 9% for the half, up from 7.8% last year.
Mobile sportsbook margin meanwhile was even better at 11.6% as the operator’s fast-growing mobile offering continued to impress. Amounts wagered on sports via mobile were up 112% with mobile gaming net revenue grew up 198% and its sportsbook app has now downloaded more than one million times since it was launched in the Apple App Store in February 2012, the company said.
Non-mobile gaming however showed little sign of growth in the period as net revenues dropped marginally from £118.1m H1 2012 to £117.9m. Only casino showed a 2% improvement compared to last year while bingo and poker fell by 2% and 14% respectively.
The results are the first half-year results posted by William Hill since it ended its joint venture with Playtech by paying £424m for the Israeil supplier’s 29% stake in its online joint venture.
“Taking control of online is giving us more freedom both to invest and to use that expertise across the Group, including in Australia, where we have a team from online helping to develop the proposition to compete more effectively. That work is ongoing and will be completed in early 2014,” Hills CEO Ralph Topping said.
“At the same time, we have continued the momentum in online, particularly in mobile sportsbook. The shift to mobile gaming is an important development and we have invested significant resources in getting the business fully prepared to accelerate this important opportunity. With almost 200% growth in mobile gaming net revenue in the first half, this decision is clearly justified.”
Nick Batram, an analyst with Peel Hunt, said that while Hills showed good progress in H1, the results highlight challenges in both retail and online outside sports betting. “We remain positive on the strategy, positioning and execution, but consider it is in the price,” he said.