Online stands out in Hills Q1s
Net revenue for online grows by one third; Nevada application "progressing well" but requires action from Playtech.
William Hill’s online revenues have grown by 33% in the first quarter of 2012, the operator has announced in its interim management statement for the 13 weeks ended 27 March.
Operating profit from online activities rose by 29% to £38.3m, with Playtech’s non-controlling interest from the William Hill Online joint venture amounting to £10.8m.
Sportsbook, supplied by OpenBet, was the stand-out performer within the operator’s online activities, experiencing net revenue growth of 58%, while casino (26%) and bingo (7%) were also up on the corresponding period in 2011. However poker declined year-on-year by 8%.
Group-wide net revenue was up 12% with operating profit rising 19% year-on-year. Mobile also continued to grow with a further 190,000 downloads of Hills’ sportsbook app as well as the release of a mobile bingo offering.
Following yesterday’s news that William Hill’s Nevada licence application was not named on the Gaming Control Board agenda for May, the operator reassured shareholders that “The Nevada licensing application to complete William Hill’s US acquisitions is progressing well and remains within the timetable guided.”
However it explained in today’s IMS that “Playtech is required to produce a submission to the regulator as a key supplier and partner, which we anticipate imminently.”
William Hill chief executive Ralph Topping (pictured) had explained in February that the Playtech JV “needs to change,” suggesting the operator would decide by the summer whether or not it would exercise its call option on the deal.
That announcement came one year after Hills took out an injunction to prevent its JV partner from entering merger talks with Ladbrokes.
In contrast to William Hill’s continued strong online growth, Ladbrokes’ online activities experienced growth of 5.9% for the first quarter following a 3.5% decline in its full-year results for 2011.
Analyst Simon French of Panmure Gordon retained his firm’s ‘Buy’ recommendation, describing William Hill Online as “A resounding financial success” and noting that his firm’s 2012 EBIT forecast for the operation was “[D]ouble that for Ladbrokes’ Digital division”.
In a statement this morning Topping said: “With positive underlying trends at this relatively early stage in the year, the Board remains confident in its expectations for the full year.”
Analyst James Hollins of Investec Securities retained his firm’s ‘Buy’ recommendation following today’s IMS, drawing attention to the “impressive [online] casino and bingo growth” as well as the performance of the operator’s online sportsbook.
Nick Batram, analyst with Peel Hunt, also issued a ‘Buy’ recommendation explaining: “Continued strong online momentum, new machine roll-outs and a busy sporting calendar suggest that there is more to come.”