2014 Final Results
A record result in a year of change
William Hill PLC (LSE: WMH) (William Hill or the Group) announces its final results for the 52 weeks ended 30 December 2014 (the period). The comparable period is the 52 weeks ended 31 December 2013 unless otherwise stated.
|52 weeks to
30 Dec 14
|52 weeks to
31 Dec 13
|Pre-exceptional profit before tax||317.3||279.8||+13%|
|Profit before tax||233.9||257.0||-9%|
|Profit after tax||206.3||226.5||-9%|
|Earnings per share – basic, adjusted2||29.9p||28.8p||+4%|
|Earnings per share – basic2||23.6p||25.2p||-6%|
|Dividend per share||12.2p||11.6p||+5%|
Key financial highlights
- Record operating profit with continuing successful diversification: 40% of Group net revenue from our digital channels3 (2013: 36%) and 18% from international markets (2013: 15%)
- Full year dividend 12.2 pence, up 5% slightly ahead of EPS growth
- Strong net cash inflow from operating activities of £368.2m and reducing debt levels (1.4x net debt to EBITDA for covenant purposes)
Key operational highlights
- Continued strong growth in Online Sportsbook: turnover up 28%, mobile wagering up 55% and record-breaking World Cup
- Online gaming net revenue up 17%: 117% growth in mobile driven by proprietary Vegas platform
- Strong growth in net revenue in Italy and Spain, up 39% and 64%, respectively
- Retail net revenue flat and operating profit1 down 2%, with the impact of less favourable sports results partly mitigated through effective cost control
- Australian business substantially reshaped, delivering improvements in key performance indicators, net revenue4 growth of 11% and operating profit1,4 growth of 121%
- William Hill brand launched in Australia in February 2015
- Strong US performance ahead of expectations: net revenue +31% and operating profit1 up 98%
- Significant progress in encouraging responsible gambling with implementation of ABB Code, launch of independent Senet Group, ground-breaking Responsible Gambling Trust (RGT) research and inaugural GambleAware Week
James Henderson, Chief Executive Officer of William Hill, commented:
“2014 was a record year for William Hill, with good operating profit growth benefiting from the continued digital and international diversification of our revenue streams, and from a record-breaking World Cup performance. I am particularly pleased with the progress in our three strategic areas of focus: differentiation through technology; continued internationalisation; and maximising the omni-channel opportunity of Retail and Online.
“Online has delivered 21% compound annual net revenue growth since 2009 and is competitively at the leading edge in this market. Internationally, we have reshaped our Australian business and are moving it to the William Hill brand, enhancing its competitiveness in this attractive market. Our US operations continue to progress strongly and we are well positioned in the event of regulatory change. Retail remains resilient and, with the largest number of betting shops in the UK and as the leading UK digital operator, we are moving closer to a ‘one customer’ proposition to deliver a seamless experience for our customers across our channels.
“We are committed to working with the industry and the regulator to promote responsible gambling. We have put better tools in the hands of customers, increased awareness of the importance of responsible gambling and helped establish mechanisms for independent scrutiny of the industry. The RGT’s ground-breaking research programme is an invaluable body of data and analysis, which will support what we all strive for – evidence-based decision-making.
“Excluding one significant loss-making week driven by customer-friendly football results, the sum of the remainder of the first eight weeks of Q1 2015 to 24 February 2015 has been in line with internal revenue expectations, benefiting from gross win margin growth. Whilst inclusion of the loss-making week leaves us behind internal expectations for the period as a whole, the Board’s view is that this volatility in sporting results is now a normal part of the Group’s trading given the increased proportion of accumulator football betting in Online as well as Retail. Therefore, the Board remains confident in its expectations for 2015.”
(1)Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions, amounting to £9.0m in 2014 (2013: £10.9m).
(2)Basic EPS is based on an average of 873.2 million shares for 2014 and an average of 838.3 million shares for 2013. Adjusted EPS is stated before exceptional items and amortisation of specific intangible assets recognised on acquisitions.
(3)References to digital businesses include Online and William Hill Australia.
(4)On a pro forma local currency basis.
(5)The contribution of Sportingbet Australia is included in the results from 19 March 2013 and tomwaterhouse.com is included from 12 August 2013.
(6)For the definition of net debt and EBITDA for covenant purposes, refer to note 21 in the financial statements.
|William Hill PLC||James Henderson, Chief Executive Officer
Neil Cooper, Group Finance Director
Lyndsay Wright, Director of IR
|Tel: +44 (0) 20 8918 3614|
|Brunswick||Simon Sporborg / Aideen Lee / Oliver Hughes||Tel: +44 (0) 20 7404 5959|
|Analyst and investor presentation|
|Meeting:||Friday, 27 February at 9.00 am GMT at 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||Tel: +44 (0) 121 260 4861. Passcode: 029 4355#. Available until 6 March 2015|
|Debt investor conference call|
|Live conference call||11.00 am GMT. Tel: +44 (0) 20 3059 8125. Password: William Hill|
|Archive conference call||Tel: +44 (0) 121 260 4861. Passcode 029 5156#. Available until 6 March 2015|
Notes to editors
William Hill, The Home of Betting, is one of the world's leading betting and gaming companies, employing around 16,000 people. Founded in 1934, it is the UK's largest bookmaker with around 2,360 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 the 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. The Group generates revenues of c£1.6bn 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.