Business
Unibet still on the hunt for
CONSOLIDATION U
nibet’s decision to pull out of an
acquisition cost the
company around £600,000 according to the firm’s interim results. Despite the expensive failure of the failed shopping trip, CEO Henrik Tjärnström says the firm is still on the lookout for potential partners and targets. The firm revealed: “During the first half of 2011 Unibet has assessed a number of possible acquisition targets. For one of the targets a more thorough due diligence was initiated, which has led to a non-recurring charge of £600,000, included within
administrative expenses for the second quarter. Following due diligence, Unibet decided not to proceed with this project. Unibet continues to evaluate potential consolidation or growth opportunities that can be expected to generate positive returns, while keeping a strong focus on the core business.” Unibet reported a dip
in gross winnings revenue to £71.8m from £81.0m for the first half year 2011, although profit from operations for the first half was only down slightly to 18.4m from £19.0m. Tjärnström
commented: “I am pleased to report another quarter of strong underlying results. Excluding the additional effect of the World Cup in 2010 and adjusting both for France (22 per cent of overall revenue in Q2 2010) and for the positive currency benefits in 2011, Unibet’s underlying growth in gross winnings revenue was 16 per cent year-on- year.
“This was achieved despite sportsbook margins that were lower than the long-term average. Reported revenues grew by 13 per cent in the Nordics even though the comparables include the positive effect of the World Cup. Our continued focus on operational efficiency has resulted in the delivery of a good profit performance.”
Online goes from strength acquisitions
Impressive figures from William Hill shows the bookmaker is growing in all areas, with its onlin WILLIAM HILL
W
illiam Hill’s 9 per cent increase in operating profits for the first half of the year to £147.7m can be attributed to
another major jump in its online business, which saw online net revenue grow 23 per cent to £152.7m compared to £124.2m over the same period in 2010.
Finance director Neil Cooper said that William Hill Online had delivered ‘exceptional results’ as evidenced by the 24 per cent increase in operating profit to £55.9m. Despite the presence of William Hill’s French casino busi- ness in the first half of 2010, which has since been closed, gaming still grew net revenue by 15 per cent. Omitting the French figures, the casino net revenues increased by 29 per cent, with bingo net revenue increasing by a similarly healthy 25 per cent. Even the firm’s poker rev- enues grew by 11 per cent, some- thing that Cooper attributes to the firm’s own performance rather than the events of Black Friday in the US. He explained: “In my per- sonal view, it’s cross-sell with sports betting customers and it
demonstrates exactly why driving your online business with sports betting at the spearhead brings in people who you can then cross-sell gaming into. It’s much more diffi- cult to get somebody who’s there to play roulette to go into the sportsbook and have a cross-sell. It works much better the other way.” And William Hill’s sportsbook has been doing well delivering 51 per cent wagering growth in the first half of 2011 versus the compa- rable period last year. Cooper com- mented: “In-play wagering has grown year over year by 95 per cent, benefiting from the very competi- tive football products and from continued in-play innovation. For example, a basketball model was launched around the start of the year and ice hockey has been launched in the first half of 2011. Existing football and tennis models have also been further enhanced. In-play wagering made up 43 per cent of the total in the first half of ‘11, up from around one third in ‘10 over the same period. If you strip out horse racing, in-play now accounts for 63 per cent of sports- book wagering. Pre-match wager-
ing, however, also continues to grow at 29 per cent year over year.” The sportsbook margin has been reflecting similar trends to the retail with pre-match gross win margin falling slightly from 9.2 per cent last year to 8.8 per cent in 2011. In-play gross win margins also fell from 4.8 per cent to 4.2 per cent.
Chief executive Ralph Topping commented: “This is an especially strong set of results for William Hill in challenging economic con- ditions. The comparator period also included part of a World Cup that delivered a record result for us last year. I am pleased with both our Online performance, which has been driven by outstanding sportsbook growth and innova- tions in our in-play and mobile offerings, and the strength of our Retail business, which continues to benefit from the popularity of machines and the resilience of over-the-counter betting. We have also made progress on our interna- tional growth strategy, both in Europe and through the three impending land-based sports- betting acquisitions we are cur-
High rollers spoil Ladbrokes figures INTERIMS
Slightly disappointing results have been made even worse by a good run for Ladbrokes’ high rollers.
L
adbrokes has reported a slight drop in group net revenue of £487.8m for the first half of the year and almost a six per cent drop in operating profit for the period to £97.6m. However, the company had omitted the £4m loss encoun- tered by its high roller business from the headline amounts, which when added show the company as a whole actually experienced a 16.8 per cent drop in operating profit to £93.6m.
The bookmaker maintained that underlying figures were positive though, with group net revenue and operating profit up 2.8 per cent and 16.9 per cent respectively if the impact of the World Cup, high rollers and one off VAT credit in 2010 was excluded.
Chief executive Richard Glynn commented: “In the face of chal- lenging economic conditions it is pleasing to see good levels of underlying growth in both the UK Retail and Digital businesses.
42 BettingBusinessInteractive • SEPTEMBER 2011
capability. During the period we have invested in our algorithmic and trading teams and built several proprietary tools which increase the level of automation in trading, increasing efficiency and helping traders to better manage margin.”
RETAIL EXPERIENCED A 2 PER CENT OVERALL DROP IN REVENUE
“We are making good progress in executing our strategy, taking immediate and practical steps to improve the business and also working towards achieving our technology milestones. In UK Retail we are confident of deliver- ing continued strong growth from machines whilst further demon- strating robust cost control and the ability to drive operating effi- ciencies.”
UK Retail saw a 15 per cent increase in gross win, but a 2 per cent overall drop in revenue for the period to £75.4m. Meanwhile, the digital business increased rev- enues by 6.5 per cent to £31.0m. The company’s interim results showed a firm with its focus very
much on the future. Glynn explained that the development of Ladbrokes’ new trading platform is ‘well underway’. “Successful trials during the finals of Wimble- don saw us provide over 60 per cent more Bet in Play markets than our nearest rival for the Ladies Final. The next platform release will see us further automate the delivery of football thereby enabling a significant increase in the total number of Bet in Play events we are able to trade. “In addition to providing scale through an increase in events traded, the fully developed plat- form will increase productivity, simplify processes and provide superior liability management
The firm has also been working on its online offering and, accord- ing to Glynn, good progress has been made on the development of its eCommerce platform in the first half of the year. “As part of an initial refresh of our Sportsbook and ahead of a full re-launch early in 2012, we have introduced a sophisticated search facility which reduces the time it takes customers to find the bet they want, whilst enabling them to place a wager directly from ranked search results.” With 18 per cent of Ladbrokes digital customers using a mobile, compared to just 7 per cent in the same period in 2010, Glynn said that mobile remains a priority: “In the period we have delivered a Grand National app, extended our Sportsbook app to Android smart- phones as well as being the first to offer live streaming of horserac- ing through a partnership with Racing UK. Further initiatives in H2 will include an extension of horseracing streaming to cover 100 per cent of UK races and a new strategic partnership with O2.”
WILLIAM HILL EVEN MANAGED OTC GROWTH
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