2013 Final Results
Significant strategic progress through digital growth and international expansion
William Hill PLC (LSE: WMH) (William Hill or the Group) announces its final results for the 52 weeks ended 31 December 2013 (full year 2013 or the period). The reported comparator period is the 53 weeks ended 1 January 2013 (full year 2012). To ensure a meaningful comparison, 52 week unaudited data are provided for the full year 2012 in the table below and on the table at the start of the Operating Review for which the results relating to the specific week ending 1 January 2013 have been removed.
|52 wks ended |
31 Dec 13
|53 wks ended |
1 Jan 13
|Change vs |
53 weeks 2012
|52 wks ended|
25 Dec 12
|Change vs |
52 weeks 2012
|- Retail net revenue(1)||£907.0m||£837.9m||+8%||£825.0m||+10%|
|- Online net revenue||£446.3m||£406.7m||+10%||£398.5m||+12%|
|Pre-exceptional profit before tax||£279.8m||£292.7m||-4%||£289.2m||-3%|
|Profit before tax||£257.0m||£277.7m||-7%||£274.2m||-6%|
|Profit after tax||£226.5m||£231.0m||-2%||£228.1m||-1%|
|Earnings per share – basic, adjusted(4)||28.8p||27.2p||+6%||26.9p||+7%|
|Earnings per share – basic(5)||25.2p||25.0p||+1%||24.8p||+2%|
|Dividend per share(5)||11.6p||10.4p||+12%|
Significant strategic progress:
- Increasing diversification of revenue streams with Online and Australia representing 48% of Operating profit3 and international markets increasing to 15% of net revenue
- Successfully completed acquisition in April 2013 to take full control of William Hill Online
- Greater investment in Online, capitalising on mobile gaming opportunity with 166% growth in mobile gaming net revenue (52 week basis +175%) and with new products and key user experience enablers introduced
- williamhill.it and williamhill.es successfully increasing online market share in Italy and Spain; mobile launched in Italy and successful integration of miapuesta brand in Spain
- Second home market established in Australia with completion of Sportingbet and tomwaterhouse.com acquisitions. Good progress on improvement plan with imminent launch of new sportingbet.com.au website and preparations ongoing to migrate tomwaterhouse.com onto William Hill Australia technology platform
- Profitability achieved in US business in first full year of ownership
- Strong net cash inflow from operating activities of £268m
Positive 2013 performance:
- Group net revenue1 up 16% (52 week basis: +18%) or +12% on a 52 week underlying basis after adjusting for the introduction of Machine Games Duty (MGD) and with Operating profit3 up 1% (52 week basis +3%)
- Outstanding growth in Online Sportsbook amounts wagered +30% (52 week basis: +33%) despite the Euro 2012 rollover with continued strong growth in mobile Sportsbook wagering, up 99% (52 week basis: +106%)
- Strong over-the-counter (OTC) gross win margin drives growth in underlying Retail net revenue1 on 52 week basis. Operating profit3 down £15m (52 week basis: down £14m) with additional c£10m indirect tax charge to Group following change to MGD in February 2013
- William Hill US saw 47% same period growth in amounts wagered and £4.9m Operating profit3
- Basic adjusted earnings per share +6% (52 week basis +7%)
- Strong dividend growth, up 12% to 11.6p per share versus 10.4p in 20125
(1) Group and Retail net revenue growth is flattered by the transition from VAT and Amusement Machine Licence Duty to Machine Games Duty (MGD) on 1 February 2013. Underlying growth rates are provided in the narrative, adjusting the prior year from the date of introduction of MGD to reflect the current tax regime.
(2) The contribution of Sportingbet Australia is included in the results from 19 March 2013 and tomwaterhouse.com is included from 12 August 2013.
(3) Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, before the amortisation of specifically identified intangible assets recognised on acquisitions, amounting to £10.9m in 2013 (2012: £5.0m).
(4) Adjusted EPS is stated before exceptional items and amortisation of specifically identified intangible assets recognised on acquisitions. The 2012 figures have been adjusted to reflect the Rights Issue.
(5) Basic EPS and dividend per share are based on an average of 838.3 million shares for 2013 and an average of 757.9 million shares for 2012, including an adjustment to reflect the impact of the rights issue completed on 5 April 2013. The 2012 figures have been adjusted to reflect the Rights Issue.
(6) The unaudited 52 week results of 2012 have been calculated by subtracting the 53rd week result from the audited results for the full 53 week period. Revenues and cost of sales for the 53rd week are actual figures, operating costs are pro-rata figures based on the December run rate, taxation is based on the effective tax rate for the year.
(7) Kantar Sport GB Syndicated Online Gambling Research, Q2 2013.
Ralph Topping, Chief Executive of William Hill, commented:
"In 2014 we are celebrating the 80th anniversary of William Hill. Our focused transformation of the Group over the last five years means William Hill is now one of the world’s leading multi-channel betting and gaming businesses, with revenues diversified through the rapid growth of Online and through careful expansion into selected international markets.
“This transformation accelerated in the last 12 months with the Group establishing a second home market in Australia through the acquisitions of Sportingbet and tomwaterhouse.com, and acquiring the 29% of William Hill Online controlled by Playtech, while maintaining an appropriate capital structure through a well-supported £373m (net) rights issue and a £375m corporate bond issue. As a result, our Online and Australia activities accounted for around half our operating profit and international markets contributed 15% of net revenue in 2013.
“Online’s Sportsbook performance continues to be sparkling, with staking levels up around 400% over the five years since the start of 2009. Mobile Sportsbook represents 39% of Sportsbook wagering in 2013. We put greater focus behind mobile gaming in 2013 and have made good progress in bringing our offer up to match the high standards we’ve set with our Sportsbook. Our product range is vastly expanded and the customer experience is greatly enhanced, with more improvements to come in 2014. The results reflect this, with mobile gaming net revenue growing by 175% on a 52 week basis.
“Importantly, Retail remains resilient, despite the ongoing squeeze on our core customer base’s discretionary spend and the large-scale expansion of online and mobile in the UK. At the same time, our international expansion strategy is progressing well with Online’s locally licensed offerings in Italy and Spain taking market share, the US business now profitable and Australia established as our second home market, with potential to expand into a more mass market customer base.
“Gambling remains a source of political debate. We have taken firm steps in the last year to further improve responsible gambling outcomes in our shops with the development and implementation of the Association of British Bookmakers (ABB) Code, addressing the areas that, we believe, can more effectively encourage the small proportion of customers who experience a problem to gamble responsibly. We are keen to ensure any decisions in this area are driven by facts and research. We are committed to being a leader in this area wherever we operate and will continue to work collaboratively with governments, regulators and our peers both to help our customers and to encourage industry-wide high operating standards.
“The work of the last five years to expand our product range, improve our user experience, innovate with our mobile offering and invest substantial sums in the williamhill.com brand have made us a formidable online competitor. That positions us very well ahead of the expected introduction of the Point of Consumption tax from December 2014. This has the potential to radically change the shape of the UK online gambling market and we are confident William Hill can, over time, take more market share as a result. In addition, we aim to mitigate some of the impact in 2015 by achieving £15-20m of cost savings against what we would otherwise have expected to spend in that year.”
|Analyst and investor presentation|
9.00 a.m. GMT on
28 February 2014
The Lincoln Centre
18 Lincoln’s Inn Fields
London WC2A 3ED
|Live conference call:
Tel: +44 (0) 20 3059 8125
Password: William Hill
|Archive conference call (until 14 March 2014)
Tel: +44 (0) 121 260 4861
Available live and, until 28 February 2015, as an archive
A separate conference call will be held at 11.00 am GMT for debt analysts and investors. Dial-in details are:
Telephone: +44 (0) 20 3059 8125
Password: William Hill debt call
Archive of the debt call (available from 2.30 pm on 28 February until 14 March 2014):
Telephone: +44 (0) 121 260 4861
|William Hill PLC||Ralph Topping, Chief Executive
Neil Cooper, Group Finance Director
Lyndsay Wright, Director of IR
|On 28 February: +44 (0) 20 7404 5959
Thereafter: +44 (0) 20 8918 3614
|Tel: +44 (0) 20 7404 5959|
Notes to editors
William Hill, The Home of Betting, is one of the world's leading betting and gaming companies, employing more than 17,000 people. Founded in 1934, it is now the UK's largest bookmaker with around 2,430 licensed betting offices that provide betting opportunities on a wide range of sporting and non-sporting events, gaming on machines and numbers-based products including lotteries. The Group’s Online business (www.williamhill.com) is one of world’s leading online betting and gaming businesses, providing customers with the opportunity to access William Hill's products online, through their smartphone or tablet, by telephone and by text services. William Hill US was established in June 2012 and provides land-based and mobile sports betting services in Nevada, and is the exclusive risk manager for the State of Delaware’s sports lottery. William Hill Australia is one of the largest online betting businesses in Australia after the Group acquired the Sportingbet Australia business in March 2013 and tomwaterhouse.com in August 2013, two of the leading online corporate bookmakers in Australia, offering sports betting products online, by telephone and via mobile devices. William Hill PLC is listed on the London Stock Exchange and became part of the FTSE100 in May 2013. The Group generates revenues of c£1.5bn a year.
Cautionary note regarding forward-looking statements
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 Listing Rules, the Disclosure 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.