Bookmakers have fully taken advantage of wide-scale high street vacancies in order to rapidly expand in the years since the recession took hold. However, following a hugely successful year, popular chain William Hill has decided to set its sights further afield than the town centres of the UK and is now planning to expand further Down Under.
The bookmaker profited from a record Grand National and the birth of the Royal baby, Prince George, allowing for half year sales of £751.6 million. This equated to a 20 per cent rise in sales during the period, largely boosted by 4,000 new customers placing bets on the date of birth and sex of the Duke and Duchess of Cambridge’s first child.
However, several high profile acquisitions during the first six months of the year clouded the issue of pre-tax profits. William Hill paid £424 million to gambling software company Playtech in order to buy back a 29 per cent stake in its online business, which ate into profit margins but allowed the bookmaker to raise sales significantly.
The firm also purchased the Australian arm of online bookmaker Sportingbet for £459 million early in the year, rebranding it to William Hill Australia in March. The investment is already beginning to show promise despite contributions from the 19th March being included in the group report, with William Hill calling the business “a leading online corporate bookmaker in Australia, with significant potential to expand.”
Chief executive of the group, Ralph Topping, spoke of the growth potential offered by online gambling in Australia.
He said; “Australia is a very attractive proposition. Since we assumed ownership, we are excited by the opportunity we see to develop William Hill Australia by improving our digital offering and targeting the recreational customer.”
Despite the significant expense of two costly acquisitions, pre-tax profits for the period came in at £143.6 million. This equated to an operating profit rise of 8 per cent – a positive result for a brand which continues to rapidly expand its commercial property presence.
In the UK, online revenue grew by 18 per cent, reaching £234 million, with more and more customers turning to online gambling and smartphone apps than ever before. However, the high street arm managed to hold its own and grow sales by 11 per cent to £464 million.
Mr Topping concluded; “While online and mobile gambling have grown substantially, retail has continued to prove resilient.
“As the UK economy improves and consumers generally feel more confident, we remain confident retail will continue to prosper.”
As VAT on gambling machines has now been replaced with the lower Machine Games Duty, it seems that William Hill is very much on a winning streak when it comes to rising sales and profits. However, with an entirely new consumer base in Australia to build upon, the bookmaker must remain vigilant when it comes to its UK operations – a wealth of rival commercial chains and online competitors mean consumers are spoilt for choice when it comes to gambling, and a slip-up could see William Hill lose its place at the head of the pack.
Do you think William Hill has taken on too many projects at once, or is rapid international expansion guaranteed to build upon already impressive profits?
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