U.K. TAX ERODES WILLIAM HILL PERFORMANCE
26th February, 2016 at 13:42:16
Pre-tax profit down 21% at £ 184.7 million.
Following predictions last week that the UK p.o.c. tax would adversely impact William Hill
plc's results (see previous reports) the UK's largest land and online bookmaker confirmed the hit Friday with the release of its latest set of (FY-2015) numbers.
The figures show a hefty 22% drop in operating profit to £291.4 million on revenues a percentage point lower at £1.59 billion, although the company went ahead anyway with its anticipated initiative to buy back £200 million of its shares, at the very least showing confidence in its ability to continue as market leader.
In a further show of confidence the company hiked its dividend 2.5 per cent to 12.5 pence per share.
Pre-tax profit fell 21% to £ 184.7 million as the 'cost of sales' (which includes additional UK gambling taxes) jumped 28% to £83.4 million.
The new taxes include the online 'point of consumption' tax and increased government duties on the retail shop fixed odds betting machines income.
Hills also pointed out that the lack of a major international football tournament in 2015 made earnings look less impressive when compared to the preceding (World Cup football) year.
The company's Australian operations justified William Hill's generous investment, acquiring over a thousand new punters a day and ending the year with impressive net revenue growth.
In his statement on the year, CEO James Henderson observed:
"In technology terms, William Hill Online now has a platform that allows us to deliver rapid and frequent innovations to customers, further differentiating our offering. We are also now preparing to roll out our proprietary self-service betting terminal in Retail. This is an important part of our omni-channel strategy and enables us to bring the best of Online to our shops.
"Internationally, I'm particularly pleased that William Hill Australia is now benefitting from our reshaping and investment in the business. We now have one of the highest rated betting apps in Australia and during the William Hill-sponsored Australian Open we acquired an impressive 1,000 customers a day and saw a 680% increase in tennis in-play turnover.
"We have made further good progress on measures to encourage responsible gambling, including using algorithms to identify potentially harmful behaviour and helping to develop a national, cross-operator self-exclusion scheme."
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