William Hill shares take a tumble as bookie blames the High Street’s woes for a plunge in its profits
- Bookie confirmed adjusted operating profit is set to come in at £234million
- William Hill is set to be hit by a crackdown on gambling in the UK
- Shares in the bookie group down 3% in morning trading
William Hill shares took a tumble today after the bookmaker said it expected full-year profits to fall 15 per cent and blamed challenging conditions on the High Street for its troubles.
The group, which downgraded its profit guidance in November, confirmed adjusted operating profit is set to come in at £234 million, within the previously announced lower range of £225million to £245million.
In a brief trading update William Hill said this year it would focus on becoming a ‘digitally-led international business’ as it faces a crackdown on gambling in the UK, both online and on the high street.
William Hill shares fell 3 per cent to 170p in morning trading.
Gambling crackdown: William Hill said it would focus on becoming a ‘digitally-led international business’ as it faces a crackdown on gambling in the UK
The UK Government is planning to cut the maximum amounts people can gamble on so called ‘fixed odds’ betting terminals, which are highly profitable gambling machines based in High Street bookmakers’ shops.
Meanwhile, the Gambling Commission has increased penalties for firms that are not actively attempting to prevent money launderers and addicted gamers from using their sites.
In light of these changes in the UK, William Hill is doubling down on international expansion, especially in the US, where gambling rules are being loosened, with sports betting now allowed in in seven states.
William Hill is also acquiring elsewhere, splashing out £241million for Sweden-based online betting firm Mr Green & Co.
William Hill chief execuitve Philip Bowcock said: ‘2018 was a pivotal year for both William Hill and the wider industry. We now have greater clarity around the key challenges and opportunities for our business. In 2019 we will remodel our retail offer while building a digitally-led international business.’
And added: ‘With rapid expansion under way in the US, building on profitable foundations, and the acquisition of Mr Green nearing completion, we look forward to making further progress this year.’
George Salmon, equity analyst at Hargreaves Lansdown, commented: ‘The acquisition of online gaming specialist Mr Green will bolster European revenues and bring much-needed online diversification, while the opportunity in the US is significant.
‘Despite looking good on paper, the strategy comes with risk attached. There are plenty of European competitors fighting for a foothold in the US, and as the UK government’s FOBT restrictions proved, extra regulation is a constant worry.’