William Hill bid target Sportingbet has said it is confident of hitting full-year targets despite “relatively volatile trading” in the first quarter slashing revenues by more than a third to £38.8m.
The volatility even extended to its flagship Australian division, the main target of William Hill under a proposed joint £530m bid with GVC, where amounts wagered grew by just 3.5% in the three months to 31 October 2012. The company said this reflected October being a four-weekend month and Australian Derby Day being pushed back to November, outside the reporting period.
On a like-for-like basis in Australia, stripping out the contribution of the Centrebet business Sportingbet acquired last year, wagers were down 8.8%, with revenues hit by lower gross win margin and a run of “customer-friendly sports results in August and September”.
CEO Andy McIver however cautioned during this morning’s Q1 earnings call that: “It is not unusual, August and September can be quite difficult months for us, because there are few sporting events, and margin can suffer.”
CFO Jim Wilkinson added that if the effects of Australian Derby Day being re-scheduled, the lost weekend in October and lower VIP turnover – due to the loss of an unprofitable VIP coming across from Centrebet who bet over AU$100m during the previous year - were removed from the equation, “Australia is up 29% up on a like-for-like [basis]”.
Back in Europe, tough economic and regulatory conditions continued to take their toll, amounts wagered rising just 2%, excluding the impacts of the disposal of the Turkish-language website, Spanish regulation and the economic crisis in Greece. Casino and games revenue was down 33.1%, hit by a lower margin and the prohibition of slots and other games in Spain post-regulation. Poker revenue was down a massive 49.5%, “reflecting continued structural decline in online poker”.
In Sportingbet’s core Spanish market, amounts wagered were down a massive 57%, with McIver admitting that the forced closure of its website earlier this year had also left it playing catch-up with its two main online sports betting rivals in that market, bwin and bet365.
“Year-on-year, we do believe we have lost market share, and the reason for that is we obviously had a period where the website was closed during last year, following the legal injunction from one of our competitors. However, we have been slowly clawing it back since the regulation came in, and we re-opened the site,” he said.
The company however emphasised that following a “challenging first quarter”, November had turned out to be “a very strong month indeed”, particularly down under, where the Melbourne Cup had put NGR on track to be “more than 10% ahead of the prior year.”
Article written by Stephen Carter
