# William Hill deliver strong first half performance

- Link: https://www.directorstalkinterviews.com/william-hill-deliver-strong-first-half-performance/412848927
- Published: 2020-08-05T07:29:15+01:00
- Author: Giles Arbor

**William Hill plc** (LON:WMH) has announced its interim results for the 26 weeks
ended 30 June 2020. Comparatives relate to the 26 weeks ended 2 July 2019 (‘H1 2019’).

|   |  |  | 
|   | H1 2020
£m | H1 2019£m | Change% | H1 2020£m | H1 2019£m | Change% | 
| Net revenue | 554.4 | 811.7  | -32% | 554.4 | 811.7 | -32% | 
| Profit/(loss) before interest and tax^(2) | 148.5 | (38.1) | – | 11.8 | 76.2 | -85% | 
| Profit/(loss) before tax^(2) | 141.1 | (63.5) | – | (14.2) | 50.8 | – | 
| Earnings/(loss) per share (EPS) (p)^(3) | 13.2 | (7.1) | – | (1.2) | 5.3 | – | 
| Dividend per share (p) | – | 2.66 | – | – | 2.66 | – |

Statutory results1 followed by Adjusted results1

**Strategic and operational highlights**

·      Our digital businesses have delivered good performances with new product 
launches Online and accelerated product development in the US. Operational emphasis
on winning with the customer delivered material improvements in our NPS and customer
satisfaction scores

·      International Online grew 17%, furthering our strategic goals of both geographic
and product diversification

·      Our next phase of strategic alignment in the UK is the merger of our UK Online
and Retail divisions to achieve a single view of our UK customer and improve operational
efficiency. 119 shops will not re-open following the COVID-19 impact on the UK retail
environment with minimal cost of closure

·      Our exclusive media partnership with CBS Sports is now live in the US, bringing
cost efficient customer acquisition and access to a fantasy sports database. Operations
commenced in 3 new states^(8) and the launch of iGaming in New Jersey is imminent.
Eldorado’s completion of its acquisition of Caesars brings our US market share of
sports wagering to 29%

·      Substantial increase in the volume of responsible gambling messages and use
of ‘guard rails’ to encourage our customers to play safely 

·      In light of the robust recovery in the opening weeks of the second half, 
since mainstream sport resumed and our shops re-opened, Coronavirus Job Retention
Scheme monies (the ‘Furlough Funds’) received from the UK government amounting to
£24.5m will be repaid

·      Our decisive actions to preserve cash, protect liquidity and strengthen the
balance sheet have enhanced strategic and financial flexibility to pursue our growth
ambitions

**Financial highlights**

·      Net revenue down 32%, driven by COVID-19 disruption to sporting events and
temporary closure of retail activities, partially offset by favourable sports results
and a resilient gaming performance

·      Online net revenue increased 1%, driven by successful product launches, growth
in International and a progressive resumption of sports events post-lockdown

·      Adjusted operating profit^(2) of £11.8m was ahead of expectations due to 
swift actions to control costs and deliver new Online content

·      Statutory operating profit of £148.5m includes recognition of the VAT refund,
offset by an £81.9m non-cash intangible impairment of the UK Retail estate reflecting
the revised UK high street outlook

·      After 13 weeks of ‘hibernation’ during lockdown, the majority of the UK Retail
estate re-opened; reduced staking levels were offset by strong gross win margins
which benefitted from the unseasonal contribution from football, leading to flat
like-for-like^(6) net revenue for the last two weeks of June

·      VAT refund of £201.6m recognised after tax

·      Net debt for covenant purposes^(4) fell from £536m at 31 December 2019 to
£340m following the successful placing of 19.99% of newly issued share capital, 
resulting in net debt/EBITDA for covenant purposes of 2.1x (31 December 2019: 2.4x)

> **Ulrik Bengtsson, William Hill Chief Executive Officer, commented:**
> “I am delighted with William Hill’s performance in these extraordinary times. 
> Our team has been remarkable, supporting each other and our customers throughout
> the pandemic, and I would like to thank them for their continuing efforts. We 
> are pleased with the moves we have taken to further strengthen customer protection,
> sending over 1.2 million player safety messages, and we are fully supportive of
> an evidence-based approach to the review of the Gambling Act, as suggested by 
> the recent House of Lords report.
> “We have clear proof that our strategy of focusing on Customer, Team and Execution
> is working. Our trading was strong before COVID-19, we controlled costs effectively
> during lockdown and we have recovered well post-lockdown with good performances
> in our online businesses throughout the first half. The furlough scheme provided
> welcome and timely support and meant we could protect the jobs of our 7,000 UK
> retail colleagues. Therefore, given the strength of our recovery post-lockdown,
> we have decided to repay the furlough funds.
> “We have continued to develop both our technology platform and our product offerings,
> with more significant enhancements to come in the second half. The balance sheet
> has been strengthened by the prompt actions we took to keep cash in the business,
> the successful placing, and the recognition of the VAT refund.
> “As a result, we have the financial strength to confidently pursue our growth 
> agenda, taking advantage of our market leading position in sports betting in the
> US, and the terrific opportunity that Eldorado’s merger with Caesars brings.” 

Notes:

1.     Both the statutory and adjusted results include the performance of Mr Green
since the acquisition completed in January 2019.

2.     Adjusted operating profit/loss is defined as profit/loss from continuing 
operations before interest and tax, excluding exceptional items and other defined
adjustments. Further detail on adjusted measures is provided in note 3 to the financial
statements.

3.     Basic EPS is based on an average of 884.7 million shares for H1 2020 and 
an average of 871.8 million shares for H1 2019. Adjusted EPS is based upon adjusted
profit/loss after tax.

4.     Net debt for covenant purposes and EBITDA for covenant purposes are non-statutory
measures. The basis of the calculation is as described in note 25 to the financial
statements within our 2019 Annual Report.

5.     Where pro forma results are stated, this assumes Mr Green was consolidated
into the Group at the start of January 2019, in order to provide a more meaningful
comparator period.

6.     Where like-for-like (LFL) results are stated, this adjusts the 2019 comparative
on a weekly basis for shops closed or sold during 2020, excluding period post 15th
June where a daily calculation is used due to phased re-opening.

7.     We now report the combined US Existing and US Expansion business as William
Hill US.

8.     When referring to states this includes Washington D.C.

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