2007 Will Hill Operating Profits Down 2 Percent
Published: Wednesday, February 27, 2008 Online-Casinos.com
2007 WILL HILL OPERATING PROFITS DOWN 2 PERCENT
Internet gambling technology problems dog UK gambling group
UK online gambling group William Hill's new chief executive Ralph Topping officiated as the company released its full year 2007 results this week, which were in line with analyst expectations and showed a gross win rise of 6 percent to GBP 983.7 million (2006: GBP 931.3 million). But operating profits for 2007 came in at GBP 286.7 million - 2 percent lower than the previous year - as the company struggled with a 17 percent fall in profits caused in part by internet gambling technology issues.
The group's Internet performance was disappointing, with gross win falling by GBP 10.7 million to GBP 119.8 million and operating profits falling by 17 percent (GBP 10.6 million) to GBP 50.9 million compared with 2006, due principally to the company's technology being unable to effectively handle in-running betting.
Another drop was experienced in the high roller segment of the company's telephone betting operations, where gross win fell by GBP 4.5 million to GBP 53 million.
Moving into the new year, the news was a little more positive with the first seven weeks to February 19 showing a 4 percent improvement in gross win, indicating that the current squeeze on consumer spending has not impacted seriously but cautioning that it is early days yet.
The statement noted that most of the company's revenues were now coming from machines (FOBTs) in betting shops and from online gambling operations. The retail business turned in a gross win of 9 percent to GBP 802.6 million from Will Hill's 2 300 betting shops across the UK and Ireland last year.
Internet performance was affected by Will Hill's decision to abandon its in-house NextGen software program (see previous Online-Casinos.com/InfoPowa reports) which resulted in a GBP 20.9 million exceptional charge, with an extra GBP 4 million anticipated this year as the company shifts to a new (Orbis) platform by November this year.
CEO Topping dismissed the idea that William Hill could solve its long-running technology problems and boost its business by buying Irish and UK rival Paddy Power as was speculated in the UK business press last week (see previous Online-Casinos.com/InfoPowa report).
"There's nothing in that, I actually don't see any logic in it," he said.
