Q&A: James Henderson, William Hill CEO

William Hill has been hit hard by the UK’s Point of Consumption (PoC) tax and the release of the operator’s financial numbers last month revealed how it has become one of the levy’s biggest contributors.

According to the figures for the 52 weeks ended 29 December 2015, the operator’s online profits fell 29% year-on-year after incurring an additional ?66.4m in UK taxes. Stripping out these additional costs, online profits would have grown 9% year-on-year.

However, even without the impact of PoC, growth is still much slower compared to previous years – online revenues were up 4% – and the pressure is on CEO James Henderson to convince the market and shareholders he has the strategy in place to ensure future growth.

eGaming Review caught up with Henderson to discuss William Hill’s full-year numbers and how technology is at the forefront of his blueprint for future success.

eGaming Review (EGR): How happy were you with William Hill’s performance during 2015?

James Henderson (JH): It was a really solid performance from my perspective. We achieved expectations with ?291m profit and that is in light of ?87m of additional taxes, which if you strip out we grew 2% on a profit level. As a consequence of that and the cash generation, the confidence the board means we’ve been able to increase our dividend ratio and announced a buyback of up to ?200m as well.

We’ve also made good progress in our strategic priorities. Australia is very much a turnaround story, SSBTs are going well and the Trafalgar platform is up and running after the initial issues that we encountered. All-in-all it was a solid year and we are in a good position to be able to capitalise on the Euros and use our scale to leverage.

EGR: Why are you waiting until after Euro 2016 to complete the front-end launch of Project Trafalgar?

JH: Trafalgar was predominantly developed for mobile which has already been rolled-out. There were a few issues at the outset – it was rated low on the app store – but we’ve worked through those and I want to make sure we have the best user experience from a mobile perspective for the Euros. I don’t want the desktop to get in the way of that. So nothing is wrong with it, I just wanted to change the timeline to deliver that and the guys are working really hard to make sure that we can leverage all of those opportunities.

We’ve done five releases since we launched it in September and we are doing 20 web releases a week. That’s a hell of a lot of releases so come the Euros we will be ready to roll. On mobile it’s consistently rated 4.5 stars, so the customers are starting to like it which is good.

EGR: How do you expect the roll-out of your new self-service betting terminals (SSBTs) to impact your online business?

JH: It is the cornerstone of the omni-channel so there is a massive opportunity there. We know that 28% of our retail customer base use online, so the more that we can increase familiarity and have the breadth and depth of product wherever and whenever you want to bet with William Hill the better.

Ladbrokes, or others, have 6,000 terminals out there and you might say we are behind the game, but I think we are ahead of the game in as much as it will be our terminal, with our prices, our look and feel, and therefore we have an opportunity to be able to drive that in a much better way. In addition, we don’t have rev-share, so whatever we take, whether it is over the counter or in the machine, it will be ours. We don’t need to support a big supplier in that case.

EGR: What else is in the pipeline at William Hill from a tech perspective?

JH: One of the things we did with Trafalgar was being focused on getting that platform ready to be able to accept any new products or innovation we might be undertaking. Doing 20 releases a week and five app releases demonstrates just how much we’ve got ready to release and we will continue to do that. As with regards to specifics, I wouldn’t want to highlight what we’re up to in case anyone else decided they wanted to do the same.

EGR: Looking internationally, which none-core markets did you withdraw from and how big an impact did this have on online revenues?

JH: The markets included Portugal, Poland, Romania and Singapore. The online business in two parts and the core business is growing. Gaming and UK revenue was up 15% and 11% respectively, but the rest of the world was down 27%. It was almost the perfect storm in that there were closures, IP blocking, forex exchange and poker had a big drag on the business as well.

In any international market, the ones that we were trading in five years ago are different to the ones we are trading in today and I’m sure the ones in five years will be different too. So it’s about looking at being able to counter any closures and IP blocking and making sure we that we take up opportunities which present themselves going forward.

EGR: As the baby of your international business, how would you assess the performance in Australia and when will the Centrebet migration take place?

JH: I think Australia is the young adult now and it’s certainly grown significantly over the last three or four months. With regards to migrations, Sportingbet and TomWaterhouse have gone very well and we have seen a revenue uplift from those that have come on board.

Centrebet is a bit different because it’s not on the same platform and those customers are very resilient. We are just taking stock at the moment and the business is flying, not least because of the promotion during the Australian Open. So there’s no rush to do that but we will monitor it. We are not spending any money on it but these are very resilient customers who we will move across at the appropriate time.