William Hill PLC - Interim Management Statement
William Hill PLC (the 'Group') is today updating the market on trading for the 15 weeks ended 14th October 2008 ('the period').
Total gross win increased by 9% in the period which represents a good performance albeit against weak comparatives in the prior year. For the year to date cumulative gross wins have increased by 5%.
Retail gross win grew by 10% in the period with Over The Counter gross wins increasing by 7% mainly reflecting favourable sporting results. Gaming machines' gross win grew by 14% against prior year comparatives that were adversely affected by the introduction of the smoking ban in England.
Interactive gross win increased by 21% over the comparative period with sportsbook and gaming recording increases of 27% and 19% respectively.
The Group's online sportsbook has demonstrated an encouraging return to growth benefiting from the initiatives taken earlier this year to reinvigorate this business such as improved site content, better value pricing and more active management of the client base as well as favourable sporting results. The project to implement the new ORBIS online sportsbook software platform remains on schedule for launch at the end of November this year.
Internet gaming (comprising casino, poker, games, bingo and skill games) has continued to grow strongly, although the pace of growth has slowed since the first half of the year, reflecting the expected lower levels of customer activity over the holiday season. In product terms games and bingo have continued to deliver the strongest growth. In a challenging competitive environment poker has suffered from weak player liquidity. The performance of both poker and casino have been impacted by William Hill Interactive being a predominantly UK focussed business built on sports betting with limited online gaming expertise.
Telephone gross win fell by 30% in the period largely due to high roller losses. To put this in context the entire Telephone business contributes only around 4% of total Group gross win.
The Group's international joint venture operation in Spain continues to develop with 23 units now trading in Madrid and plans to begin trading in the Basque Region in November. Initial trading from the first outlets has been encouraging.
Total operating expenses increased by 5% in the period in line with management's expectations and reflecting strong cost control measures.
Material Events, Transactions And Financial Position
William Hill has today separately announced the acquisition of certain affiliates of Playtech Ltd ('Playtech') and related assets and the entering into a software agreement with Playtech for a minimum of five years for poker and casino, with an option to move into other product areas.
The Board believes the transaction, creating an enlarged William Hill Online, is a transformational step for William Hill in line with its strategy to increase online gaming and international earnings. William Hill Online will be the leading European online gaming and sports betting business and the clear online leader amongst the traditional UK land based operators.
The Board believes that the transaction generates significant shareholder value and enhanced growth prospects for William Hill while requiring only limited upfront cash.
As at 30 September 2008, the Group's net debt was £1,031.5m, a reduction of £27.4m from the position at 1 July 2008. The Group continues to perform strongly and operate comfortably within its banking covenants. The Group's borrowing facilities have over 16 months to run until maturity and the Group continues to maintain a regular dialogue with its banks. The Group is preparing to undertake the refinancing of these facilities in due course with the benefit of the Group's continuing strong operating performance.
Chief Executive Comment
Commenting on the results, Ralph Topping, Chief Executive:
"This is a solid operational performance by the Group since the half year, demonstrating the resilience of the business against a challenging economic environment. To date we see little evidence that our business has been impacted by the economic downturn.
With nine months of the year completed, and notwithstanding that comparatives become tougher over the final quarter, the Board remains comfortable with market expectations for the Group."
The Group expects to issue its preliminary results for the 52 weeks ended 30 December 2008 towards the end of February 2009.
|Ralph Topping, Chief Executive Officer||Tel: +44 020 8918 3910|
|Simon Lane, Group Finance Director||Tel: +44 020 8918 3910|
|Nilay Patel, Corporate Finance Manager||Tel: +44 020 8918 3736|
|Fiona Antcliffe/James Clasper, Brunswick||Tel: +44 020 7404 5959|
This statement contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of William Hill PLC. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors, which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, William Hill PLC has no obligation to update the forward-looking statements or to correct any inaccuracies therein.