William Hill Announces £800 Million Loss in Half-Year Results

Bookmaker, William Hill, has released its financial results for the half year ending 26 June 2018, showing it suffered a loss before tax of £802.3 million.

According to William Hill, the loss was due in large part to a once off exceptional charge and adjustments following the Triennial Review Decision regarding Fixed Odds Betting Terminals (FOBT). This included a £882.8m non-cash impairment of its retail business.

Though not yet implemented – and in fact currently looking to be delayed for two years – William Hill announced that the Decision to reduce the maximum betting stakes on FOBT to £2 could continue to affect the company’s retail profits by between £70-100 million in the following half year.

…we expect the implementation of a £2 staking limit on gaming machines in shops to reduce Retail’s gaming revenues by 35-45% and operating profit, after mitigation, by ~£70-100m. Our preliminary estimates suggest ~900 William Hill shops (38% of our existing estate) could become loss-making. Philip Bowcock, Chief Executive Officer, William Hill

The financial report continued, “A regulatory change of this nature is unprecedented and its impact on customer behaviour will not be known until some years after implementation… Exceptional charges relating to shop closures could be in the range of £50,000 to £60,000 per shop, with a potential three-year period to reshape the shop estate. We await confirmation from the Government on timing of implementation. For the next few years, our response to this change will be the primary focus for Retail’s leadership team, from implementation through to mitigation.”

The William Hill online operations also suffered a hit in the HY18, as it battled to recover from a £6.2 million fine it received from the UK Gambling Commission (UKGC) in February. “In February, we announced that we had reached a regulatory settlement with the Gambling Commission relating to systemic failure to protect customers and prevent money laundering, which involved paying a penalty package of at least £6.2m, including repaying monies to affected parties,” Bowcock said.

An image of a William Hill shop.

An image of a William Hill Shop. ©Newscast/UIG via Getty Images.

Following this, William Hill has looked to change its online approach, using the feedback from a number of both internal and external audits.

“As a result, we have closed and are closing a number of customer accounts, which could impact our performance in the second half. Through the digital transformation, Online has become a much stronger business, which means that we are now better placed to tackle these issues.”

The revenues from the online sector of the business, despite the issues, still grew £30.9m (11%) to £320.9m compared to the same period last year.

“During the first half, our Online business continued to deliver double-digit growth. In Retail, we are beginning to put in place plans to mitigate the impact of the Triennial Review,” Bowcock stated in the report.

“In the US, we have moved quickly following the repeal of PASPA as we grow into newly regulating states. We will continue to invest in the US to ensure we are well placed to capture the substantial potential available to us.

“Fundamental to delivering over the long term will be our sustainability strategy, which marks a significant cultural change for the company. Gambling-related harm is a serious issue and it is important that we face up to this challenge. We have set ourselves the ambition that nobody is harmed by gambling and set out a detailed programme of actions as we start out on this journey.”

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