2019 Half-year results

Delivering on our strategy and well positioned for future growth

William Hill PLC (LSE: WMH) (William Hill or the Group) announces its half-year results for the 26 weeks ended 2 July 2019 (the period or H1 2019). Comparatives relate to the 26 weeks ended 26 June 2018.

Financial results

• H1 results in line with expectations during period of transition and Year 1 of new strategy
• Group net revenue up 1% to £811.7m, impacted by £2 stake limit on gaming machines in betting shops and reflecting the acquisition of Mr Green
• Adjusted operating profit2 down 33% to £76.2m reflecting £2 stake limit and investment in US Expansion
• Exceptional charge and adjustments of £114.3m, including £97.1m relating to mitigation measures following the £2 stake change, including the proposed closure of c700 betting shops, leading to a statutory loss before tax of £63.5m
• Net debt to EBITDA for covenant purposes4 of 2.0 times, up from 1.0 times at the full year, in line with expectations
• Corporate bond successfully refinanced with new 4.75% seven-year £350m bond maturing in 2026
• Interim dividend of 2.66p per share, consistent with the Board’s commitment to an 8p per share underpin

Strategic and operational progress

• Building a scale business in US sports betting with $1bn of amounts wagered and 27% market share across seven states in H1
  • On track to launch market-leading and proprietary sports betting technology platform ahead of NFL season
  • Now live with sports betting in eight US states, two more to go live imminently
  • Announced Eldorado Resorts, Inc. acquisition of Caesars Entertainment, if completed, would provide access to 34 additional casinos, which we anticipate would generate c$20-35m additional retail EBITDA within three years, and to five incremental states including New York
• Diversifying Online with contribution from international markets increasing to 33% of net revenue in H1
  • Online UK net revenue down 1% reflecting weaker sports results year on year and enhanced customer due diligence, year on year impact now at an end
  • Product improvements driving improved customer metrics and 7% UK net revenue growth in Q2
  • Online International revenues up 66% and positive momentum from Mr Green
  • International hub established in Malta, providing a base within the European Union
  • Integration on track with c£4m annualised cost synergies to be achieved this year
• Remodelling Retail following implementation of £2 stake limit on B2 gaming products on 1 April
  • Revenue impact in line with our previous guidance
  • Decisive action taken with start of colleague consultation on proposed closure of c700 shops
• Distinctive new brand proposition launched in UK in time for new domestic football season
• Commitment alongside four other leading companies to increase funding for treatment of problem gambling
• Full-year performance expected to be in line with previous guidance Philip Bowcock, Chief Executive Officer of William Hill, commented:

"We are making good progress against the five-year strategy we outlined last year, delivering strong revenue growth in the US and other international markets and positioning William Hill well for future growth.

"We continue to expand rapidly in the US, both in Nevada and in the new states, with over $1bn wagered with us in the first half. We are now live in eight states and will expand into at least two more states in H2.

"Online International revenues have grown strongly, up 66%, with the acquisition of Mr Green. We are becoming more diversified with non-UK markets now contributing a third of Online’s revenues, up from just 24% last year. In the UK, performance has improved through the half, up 7% in Q2, as we manage the tax and regulatory impacts.

"In Retail we took the tough decision to announce a consultation process over the proposed closure of around 700 shops to protect the long-term future of the business following the introduction of the £2 stake limit. The response of our colleagues has been incredibly professional during this difficult time and I would like to thank each and every one of them for that.

"Underpinning William Hill’s progress is our sustainability strategy and long-term ambition that nobody is harmed by gambling. The voluntary whistle-to-whistle ban has begun and we have, together with other leading operators, committed to a significant increase in funding for safer gambling measures, including for treatment. We continue to work on additional measures to protect our customers and lead the regulatory agenda."

Notes 

1. Both the statutory and adjusted results include the performance of Mr Green since the acquisition completed in January
2. Adjusted operating profit is defined as profit before interest and tax, excluding exceptional items and other defined adjustments. Further detail on adjusted measures is provided in note 3 to the financial
3. Basic EPS is based on an average of 871.8 million shares for H1 2019 and an average of 858.7 million shares for H1 2018. Adjusted EPS is based upon adjusted profit after
4. Net debt for covenant purposes and EBITDA for covenant purposes are non-statutory measures. The basis of the calculation is as described in note 24 to the financial statements within our 2018 Annual Report and Accounts, with the addition of the EBITDA of Mr Green for the full rolling 12 month
5. Results in the Online operating review table are presented on an adjusted basis including Mr Green’s results post acquisition on 28 January
6. Where pro forma results are stated, this assumes that Mr Green was consolidated into the Group at the end of January 2018, in order to provide a more meaningful comparator period. Further detail on pro forma results are provided in note 13 to the financial statements.
7. The US Existing business has now been simplified to contain only revenues from Nevada, with all revenues from Delaware now recognised in US Expansion. 2018 results are restated to reflect this
8. Definitions are provided in the glossary at the back of the
9. Results are presented on an adjusted basis unless otherwise

Enquiries

Analyst and investor presentation

Debt investor conference call

Notes to editors 

William Hill PLC is one of the world's leading betting and gaming companies, employing c15,500 people. Its origins are in the UK where it was founded in 1934, and where it is listed on the London Stock Exchange. The majority of its £1.6bn annual revenues are still derived from the UK, where it has a national presence of licensed betting offices and one of the leading online betting and gaming services. In 2012, it established William Hill US with a focus on retail and mobile operations in Nevada and became the largest sports betting business in the US. Following the ruling in May 2018 by the Supreme Court that the federal ban on state sponsored sports betting was unconstitutional, William Hill US has expanded and continues to expand as new states regulate sports betting. It is now operating in eight states: Delaware, Mississippi, Nevada, New Mexico, New Jersey, Pennsylvania, Rhode Island and West Virginia.

William Hill’s Online business is headquartered in Gibraltar and Malta, and the Group is licensed online in 10 countries following the acquisition of Mr Green & Co AB at the end of January 2019.

Cautionary note regarding forward-looking statements

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

These results include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout these results and the information incorporated by reference into these results and include statements regarding the intentions, beliefs or current expectations of the directors, William Hill or the Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of William Hill and the industry in which it operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond William Hill's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition, liquidity, dividend policy and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in these results and/or the information incorporated by reference into these results. In addition, even if the results of operations, financial condition, liquidity and dividend policy of the Group and the development of the industry in which it operates, are consistent with the forward-looking statements contained in these results and/or the information incorporated by reference into these results, those results or developments may not be indicative of results or developments in subsequent periods. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation (596/2014), the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Rules), William Hill does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

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