William Hill will start a formal valuation process of Playtech’s stake in William Hill Online next month with a view to acquiring this in 2013, the bookmaker confirmed this morning.
CEO Ralph Topping however refused to be drawn during this morning’s Q3 earnings call on how much it would cost his company to exercise its first-call option to buy out the software provider’s 29% share, after one analyst suggested £500m “might be a sensible starting point”, given current trading. Hill’s will announce whether or not it intends to proceed with the buyout after the valuation process completes in February 2013.
“I don’t really want to say too much about it. It will be what it will be, it will be an independent valuation, and let the independent valuer decide. I suppose she/he will look at the point-of-consumption tax, and what’s going to be happening in sectors like Germany and elsewhere”, said Topping.
“But I don’t really want to get into that at the moment. I think it It’s unfair to Playtech, if we start saying what we think at this point. I would rather we did that in private. I don’t want this to turn into some sort of Roman Colosseum.”
William Hill Online’s stellar growth since the full effects of the integration of the JV kicked in around two years ago continued in the last quarter, delivering 18% growth in net revenue and a 42% uplift in operating profit to £34.8m, driven by sportsbook and mobile. Sportsbook net gaming revenue (NGR) was up 43%, while mobile sportsbook turnover grew 331% to account for 27% of the total sportsbook. Mobile gaming was up 533%, due to the launch of Playtech-powered mobile casino and bingo products.
Gaming net revenue however performed less strongly in Q3, up just 5%, with 16% growth in Hill’s multi-provider Vegas Casino offset by just 2% growth in NGR from Playtech casino, impacted by punters being distracted by the Olympics and Paralympics, the rollover of high roller losses and market closures. Bingo revenue was up 6%, while poker fell a massive 24%.
The company also announced an executive reshuffle at William Hill Online, with head of business integration Andy Lee becoming the new MD in place of CEO Henry Birch, whom Topping said had informed him that “he felt that this was the natural point for him to move on, to look at something different.”
Lee will work alongside Jamie Hart, promoted from head of sportsbook to director of customer experience and innovation, on driving the WHO business forward founded on “a strong customer focus”, following the product-led development of recent years. “Andy gets that. So does Jamie Hart”, said Topping.
Article written by Stephen Carter