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UK – William Hill reports positive Q4 despite 16 per cent annual revenue fall

By - 13 January 2021

William Hill’s total group net revenue for the year decreased by 16 per cent to £1,324m, citing Covid-19’s impact on live sport, national and regional lockdowns in the group’s retail business and the effect of trading a smaller retail estate.

The operator’s latest trading statement showed net revenue for the fourth quarter grew nine per cent year-on-year. Sportsbook staking increased 16 per cent, driven by enhanced products and geographical expansion, whilst gross win margins benefitted from favourable sporting results, driving group sportsbook net revenue up 20 per cent year-on-year.

Online international net revenue increased 12 per cent on a pro-forma basis in 2020, benefitting from the successful integration of Mr Green, which launched in two new regions. William Hill attributed the ‘delivery of product improvements and effective implementation of a multi-brand strategy’ as offsetting the regulatory headwinds and the absence of live sport during part of the year, with gaming growing 18 per cent pro-forma.

Online UK net revenue grew five per cent in 2020. The steady stream of platform and product upgrades improved the operator’s competitive position and the year concluded strongly, driven by a full calendar of live sport in the last quarter and with gaming net revenue growing 20 per cent in that quarter.

US full year net revenue increased 32 per cent, driven by strong growth online. Casinos remained closed or operated with restricted access for long periods and the major US sports leagues rescheduled their seasons in response to the pandemic. As part of the company’s existing joint venture agreement, William Hill absorbed the Caesars In-Person sportsbooks onto its platform.

William Hill US went live in five new states and launched mobile in five states, leading to 121 per cent net revenue growth in the fourth quarter. William Hill’s sports betting apps and sports book odds are now featured on both ESPN and CBS Sports, two of America’s leading sports media brands, as a result of agreements entered into during the year.

Net retail revenue decreased 30 per cent on a like-for-like basis, driven by a series of national and regional lockdowns, implemented in response to the pandemic at the end of the first quarter and affecting the remainder of the year.

When open, with no restrictions, retail ‘traded well and profitably’. At the end of the third quarter, William Hill claim ‘retail was on course for a breakeven outcome for the full year’.

However, the Covid-19 related restrictions experienced during the fourth quarter impacted all the group’s 1,414 shops at some point, resulting in a full year loss of circa £30m.

William Hill received £24.5m of furlough funds in the first half which have since been repaid and, under the current circumstances, do not expect to claim any further job retention related support. Throughout the year, even when furloughed, UK retail colleagues received 100 per cent of their full pay.

Ulrik Bengtsson, CEO, commented: “2020 was a year like no other. It tested our agility and flexibility and we delivered, keeping our customers and team safe, whilst materially improving our competitive position through product enhancements and geographical expansion.

“The offer received for the group recognises the substantial progress we have made as well as the opportunities and challenges ahead of us. I remain immensely proud of the William Hill team which has been relentless in its focus on delivering a great product and service to our customers, with player safety at its heart. Customer, Team, Execution have been our guiding lights through this unusual year, and they will remain so as we look forward through 2021.”

In September, the boards of William Hill and Caesars announced that they had reached agreement on the terms of a recommended cash acquisition pursuant to which Caesars UK Bidco shall acquire the entire issued and to be issued share capital of William Hill not already owned by or on behalf of the Caesars Group for a cash price of 272p per share.

William Hill has confirmed that at the Court Meeting and General Meeting held on 19 November 2020, the requisite majority of shareholders approved the scheme of arrangement in relation to the acquisition.

Caesars’ current expectation is that the remaining approvals required to be obtained from the relevant US gaming authorities will be obtained in time to allow completion of the acquisition to occur early in the second quarter of 2021, but possibly as early as March 2021.

The group’s 2020 final results will be announced on Wednesday, 24 February 2021.

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