William Hill reports improving revenue trends in UK and US

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William Hill PLC (LON:WMH) has reported mostly improving trends across its UK and US gambling businesses, though this would seem to be a formality as the bookmaker has agreed to be taken over by US partner Caesars Entertainment.


Group net revenue was down 9% for the 13 week period to September 29, 2020, because of a 2% year-on-year fall in its UK shops, though this was an improvement on the 49% decline in the first half of the year due to the coronavirus lockdown.


Online gaming revenue rose by 4%, compared to 1% in the first half, with the UK being the driver.


International online revenues were the only area that performed worse than in the first half, as unfavourable sports results offset double-digit gaming growth.


In the US, where William Hill’s is partnered with Las Vegas casino giant Caesars, revenues jumped 10% after a 28% decline in the first half of the year.


Strong growth in US mobile gaming and a good recovery in in-person retail experience was reported by the bookmaker, as major live sport resumed in July and the joint venture opened for business in four new states, with Colorado, Illinois, Michigan and Washington DC during the third quarter, and Pennsylvania this month.


Following the full integration of the Caesars’ sports-books, William Hill will operate more than 170 venues across 15 states, of which the majority will have a mobile presence.


The group’s board, which has agreed and recommended a 272p-per-share cash offer by Caesars, said it will confirm details, including of a shareholder vote in due course.


There was little movement in the shares on Wednesday morning at 279.95p, with the cash offer on the table, which makes these numbers are a bit of a formality.


However, as analysts at Hargreaves Lansdown noted, the shares are trading at a premium to the offer price itself, which “suggests a degree of optimism in the market that a rival bid may be forthcoming”.


“These numbers will do nothing to hurt that hope, but we still struggle to see how bidders other than Caesar’s could clinch the deal given the US casino giant is already deeply embedded in William Hill’s US business.”

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