William Hill’s online JV with Playtech unveiled another strong set of figures yesterday, with annual net revenue up 27%. The performance boosted group revenues by 12% and operating profit 20%.
CEO Ralph Topping (pictured) noted that the final quarter of 2012, in which retail and online benefitted from a strong margin in the sportsbook, “delivered a strong end to an already good year in 2012.”
The company however warned that while it continued to take online casino and poker action from Germany, all the time “monitoring developments closely”, being forced to switch this off by “substantive regualtory change” could cost it another £6m in operating profit a year, on top of the £7m-£9m it expects from closing its Greek business and German-facing sportsbook last year.
Finance director Neil Cooper told Ivor Jones of Numis in yesterday’s analyst conference call: “If you look at the [German] equivalent of the UK High Court this week, they’re kicking it up to the ECJ. I think it’s clear our position on Germany is proportionate and a risk-based and susceptible stance.”
William Hill said it expected to close its £454m acquisition of Sportingbet’s regulated Australian arm, which also includes an option on the Miapuesta Spanish business, in March, increasing the mix of its online business coming from lower risk regulated markets.
The bookmaker will also announce next month if it is to proceed with its proposed buy-out of Playtech’s 29% stake in its William Hill Online JV. Each has appointed a bank to provide a valuation – Citigroup for Hill’s and Cannacord for Playtech – with Rothschild providing a third independent asssessment if the parties fail to broker an agreement at the first stage.
But with February’s valuation set to reflect the stellar current performance of the WHO business, Hill’s may decide to wait until its second call option on the stake matures in 2015, when the price could be relatively lower due to the UK phasing in a place-of-consumption tax, scheduled for December 2014.
Hill’s highly critical response to the government’s draft POC bill was published by the Culture, Media and Sport Committee yesterday, which conducted pre-legislative scrutiny of the proposals.
While outlining its opposition, the bookie suggested two changes to the proposals to make them more viable for online operators, namely maintaining a white list of approved jurisdictions to avoid dual regulation of Gibraltar-based companies, and implement the tax at 5% of gross profits, as opposed to the currently mooted 15%.
Article written by Stephen Carter
