William Hill Profits Race Ahead

By David Winning, City Staff, PA News

Bookmaker William Hill today hailed the performance of fixed odds betting terminals in its high street outlets as profits raced ahead 43%.

The gross win from the 3,239 terminals, including slot machines, more than doubled last year to £100.5 million after gaming groups overcame a legal challenge from regulators.

The London-based group said trading in 2004 was also encouraging with double-digit growth in the gross win at its 1,586 branches in the UK, and telephone gambling and interactive divisions.

This performance left William Hill confident of sustainable profit growth in the current year.

But William Hill warned that the acceleration in the roll-out of fixed odds betting terminals from April last year meant their contribution to the gross win would lessen throughout the year.

Pre-tax profits rose to £201.7 million during the year to December 30 from £141.4 million a year ago, with the gross win rising 24% to £654.3 million in 2003.

Turnover leapt 77% to £5.95 billion, helped by 7.4% growth in traditional over-the-counter business and the first improvement in the gross win from horse racing in four years.

But the World Cup in 2002 proved a tough comparative for its football business as revenues remained flat during the year.

The decision to extend trading hours to include opening on Sunday and offer more betting opportunities contributed to a 10% hike in costs at its high street estate.

William Hill said its interactive division managed to grow operating profits by 81% to £37.1 million despite a series of setbacks in Far Eastern markets.

The outlawing of internet betting in Hong Kong and subsequent banning of gambling transactions by many credit card issuers led to a rapid slowdown in revenues in Asia.

William Hill added it was strongly lobbying the European Commission to ensure enforcement of unrestricted cross-border trading.

However, computer generated horse racing has captured the imagination of UK punters and now formed 36% of gross win in this division.

Telephone gambling saw an 11% increase in the gross win to £56.5 million, helped by higher returns from football following the decision to allow bets once a match was in progress.

William Hill also announced today that it was seeking approval from shareholders to buy back 10% of its shares. Total dividend for the year was 12.5p, up 44% on a year ago.

Source: Scotsman