Tax hike sees William Hill Online profits slide 29%
Operating profit hit by an increased UK tax bill and a 27% YoY fall in revenues from non-core markets
William Hill this morning reported a 29% year-on-year fall in 2015 online profits following slower revenue growth than previous years and a ?66.4m hit from the UK’s Point of Consumption (PoC) Tax.
According to the operator’s full-year financial figures, operating profit for William Hill Online decreased from ?177.7m in 2014 to ?126.5m despite revenues increasing by 4% year-on-year.
Net revenues of ?550.7m for the 52 weeks ended 29 December represented an increase on the ?527.4m reported the previous year, with 11% growth reported across its core UK, Spain and Italy markets.
Italy, which achieved profitability for the first time in 2015, was the operator’s best performing core market with revenues up 28% year-on-year, while in the UK and Spain digital revenues increased 11% and 13% respectively.
However, online revenue from William Hill’s non-core markets declined 27% year-on-year following the withdrawal from five countries including Portugal, Poland and Romania.
The operator’s Australia business, which recently completed the migration of tomwaterhouse.com customers to William Hill, reported a 20% year-on-year fall in net revenues and a 46% decrease in operating profit.
Total sportsbook revenues for William Hill Online increased 4% to ?263.9m, following a slight growth in the gross win margin, while a 5% rise in gaming revenues was driven by strong double-digit growth from its Vegas product suite, although its Playtech-powered casino fell 11%.
CEO James Henderson said he was pleased with the operator’s progress throughout the year as it looks to reap the rewards of its new technology platform rolled-out last year.
“In the last 12 months we have made substantial operational progress against our three strategic priorities of omni-channel, technology and international,” he said.
“As one of the largest scale businesses in gambling, the board is confident in the outlook for the year ahead and believes the Group is well placed to deliver on its growth strategy,” Henderson continued.
Total group revenues – including retail and online – were down 1% year-on-year, while operating profit decreased from ?372.2m in 2014 to ?291.4m last year.
However, despite the hefty fall in profits the operator today announced a ?200m share buyback to be completed over the next 12 months and also increased its full-year dividend by 2.5%.
William Hill’s share price was down 3.6p to 398.1p on the London Stock Exchange at the time of writing.