William Hill reported a 57 per cent drop in revenues in the seven weeks to 28 April, adding that the COVID-19 closures was costing it around £15m a month.
The company said it was ‘planning for a staged opening of the UK retail estate in the second half of 2020’ and was monitoring developments across the US, adding that was ‘well positioned across the group to ‘power up’ quickly as live sporting events resume and health considerations permit.’
Ulrik Bengtsson, CEO, said: “We reacted quickly to the cancellation of sports activities and the closure of our retail estate. We took immediate measures to save costs, reduce cash outflow and minimise non-essential expenditure by negotiating with our suppliers, cancelling pay rises and executive bonuses and suspending the dividend. We have preserved liquidity and amended the terms of our net debt covenant, leading to significant, balance sheet headroom. This will enable us to continue to invest for growth, most notably in the US, as plans there to roll out sports betting continue apace.
“Our ambition to build a digitally led, internationally diverse business of scale is proving beneficial during the disruption as our international online business has performed very strongly. We have accelerated product developments in the US in particular to ensure we are well positioned when sports activity reopens. Our product development teams elsewhere have also excelled themselves during this period of remote working, deploying a range of important new products, most notably a gaming front end to improve navigation and speed for the UK market.
“We remain focused on player safety employing ever more customer protection. We are taking care of our teams, securing as many employment opportunities as possible and we are ready to power up the business as soon as COVID-19 restrictions permit.
“Our strategy for the Company remains a simple one – to win with our customers, build agile collaborative teams, and get things done – execution. We are developing products that we are proud of and that will improve William Hill’s competitiveness for the long term.”
The company’s revolving Credit Facility (RCF) covenants have been waived for 2020 and reset for 2021, with cash burn reduced to around £15m per month with liquidity in excess of £700m.
In line with its ambition to diversify internationally, 29 per cent of revenue was generated outside the UK compared to 20 per cent during the same period last year;
Online International net revenue grew 35 per cent driven by a strong performance in gaming. Mr Green, which was launched in Spain during the period, and new product developments – a new sportsbook front end and a single wallet – have gained traction in Italy and Spain. Online International grew 11 per cent. Online UK grew in line with expectations as net revenue grew seven per cent.
The company said it acted early to undertake additional safer gambling measures, including a six-fold increase in the volume of responsible gambling messages sent to our customers. “Where relevant we have implemented safer gambling ‘guard rails’ to ensure player safety and we will continue to take decisive action to protect our customers,” it explained. “In the UK we are fully committed to adhering to the COVID-19 pledges put in place by the Betting and Gaming Council (BGC) on 27 March which build on the actions already made to safeguard our customers. We, along with the UK’s other largest betting and gaming operators, voluntarily adopted the TV and radio gaming advertising ban which will remain in place until June 5.The UK credit card ban came into force on 14 April 2020 and we implemented the ban on time and in full. We saw no material drop off in deposits and we will be able to gauge the longer-term impact more accurately when sports betting resumes.”
Outside the UK, it said the regulatory environment remains fluid with a variety of measures adopted across Europe. We saw developments in Spain, Latvia and Sweden restricting advertising and proposing further consumer protection measures. We have also seen ongoing regulatory activity (both in licencing and payment processing) in Germany and The Netherlands.