William Hill share price edges higher as US expansion gains momentum
The British bookmaker’s share price went a touch higher on Friday after investors were told that its US expansion plans are ramping up, despite the company posting a slight slide in full-year adjusted operating profit in 2018.
William Hill recorded a slight fall in its full-year adjusted operating profit, but reassured investors that it remains firmly on track with its new five-year strategy and goal to double its profits by 2023.
The bookmaker also used its full-year 2018 trading update to tell investors that 2019 results will be in line with market expectations and it is ramping up investment in its US expansion plans.
‘We have three businesses at different stages, with online growing in the UK and diversifying internationally, retail being remodelled in response to the new £2 stake limit, and rapid expansion in the US sports betting market,’ William Hill CEO Philip Bowcock.
William Hill results: key figures
The bookmaker recorded a 2% increase in net revenue to £1.6 billion in 2018, but adjusted operating profit from existing operations fell 3% to £267 million compared with the previous year, with the decline in line with expectations, the company said.
Operating cash flow before movements in working capital climbed 9% to £275 million and the company’s balance sheet remains strong with net debt of £308.1 million, 1x EBITDA at year end.
The bookmaker also announced a full-year dividend to shareholders of 12p share, which is in line with its policy to payout around 50% of underlying earnings, based on adjusted earnings per share before US expansion costs in 2018.
William Hill and other British bookmakers eye US market
Since UK regulators introduced tighter rules and the US Supreme Court overturned a federal ban on sports betting, British bookmakers have had to adapt to changing market conditions, with many taking steps to enter the American market.
William Hill has invested in a digital launch in New Jersey and has rolled out its operations into another six states across the US, with these investments contributing to the company posting an operating loss of £33.2 million in 2018.
‘We have started delivering on our strategy with the expansion of our US business, being first out of the blocks in all states that have regulated sports betting, and with the acquisition of Mr Green, which will support the build-out of our international digital business,’ Bowcock said.
‘We have also put our weight behind reducing the amount of TV gambling advertising seen by under 18s through a voluntary whistle-to-whistle advertising ban before the watershed,’ he added.
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